MANOJBHAI BHUPATBHAI VADODARIA vs ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(4), AHMEDABAD
- Court
- Gujarat High Court
- Case type
- SPECIAL CIVIL APPLICATION
- Decided on
- 23-02-2026
C/SCA/9447/2023 JUDGMENT DATED: 23/02/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 9447 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
==================================================
Approved for Reporting Yes No
✔
==================================================
MANOJBHAI BHUPATBHAI VADODARIA
Versus
ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(4),
AHMEDABAD
==================================================
Appearance:
MR B S SOPARKAR(6851) for the Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1
==================================================
CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 23/02/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. RULE . Learned Senior Standing Counsel Mr. Varun Patel waives
service of notice of rule on behalf of the respondent – Department. Since a
pure question of law is raised in the writ petition, the same was heard
extensively and is finally decided today by this present judgment and
order.
2. The brief facts giving rise to the filing of the writ petition are as
under:
2.1. A search and seizure operation under Section 132 of the Act of the
Income Tax Act, 1961 (for short “the Act”) was initiated on Sambhaav, Nila
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and its key associations on 08.09.2021.
2.2. Subsequently, on 24.02.2023, the petitioner is issued the impugned
notice for reopening under Section 148 of the Act for the Assessment Year
2012-13 inter alia other notices under Section 148 of the Act for other
Assessment Years. The petitioner filed his preliminary objections against
the issuance of notice under Section 148 dated 19.05.2023.
2.3. It is the case of the petitioner that the respondent issued notice
under Section 143(2) of the Act read with Section 147 of the Act on
19.05.2023 and also supplied approval accorded by the Director General of
Income Tax (DGIT) (Investigation) vide communication dated 20.05.2023.
It is the case of the petitioner that the respondent however provided
reasons for reopening the assessment vide communication dated
22.05.2023 but had not passed any speaking order disposing of the
objections raised by the petitioner. Hence, this petition.
3. Learned advocate Mr. B.S.Soparkar appearing for the petitioner, at
the outset, has submitted that the impugned notice is barred by limitation
and runs contrary to the provisions of Section 149 read with Section
153A(1)(b) read with Explanation 1 to Section 153A of the Act. Mr.
Soparkar, learned advocate, has advanced the following submissions :
3.1 Relying upon Section 149 of the Act, it is contended that the notice
under Section 148 of the Act can be issued up to six years from the end of
the relevant assessment year. Further, relying upon Sections 153A and
153C of the Act, he would submit that notices under Sections 153A / 153C
of the Act can be issued for a period of “ten assessment years” immediately
preceding the assessment year relevant to the previous year in which
search is carried out and for the “relevant assessment years”, subject to
fulfillment of certain conditions.
3.2 It is submitted that the “relevant assessment year” means an
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assessment year preceding the assessment year relevant to the previous
year in which search is carried out or requisition is made, which falls
beyond six assessment years but not later than ten assessment years from
the “ end of the assessment year relevant to the previous year in which
search is conducted ”.
3.3 Reference is also made to the provisions of Section 149 of the Act,
more particularly the proviso to Section 149 read with Explanation-1 to
Section 153A of the Act, and it is submitted that so far as the limitation is
concerned, for reopening of the assessment, the same is pari materia to
Section 153C of the Act.
4. It is submitted that in the instant case, the search action was carried
out on 08.09.2021, i.e. during the Financial Year 2021-22, and hence the
relevant assessment year to the previous year in which the search was
undertaken under Section 132 of the Act is Assessment Year 2022-23. It is
further submitted that the notice under Section 148 of the Act for the
Assessment Year 2012-13 would be time-barred, as the period of ten years
would end at Assessment Year 2013-14, since the Assessment Year 2022-
23 will become the first assessment year as per the provisions of Sections
153A - 153C of the Act.
4.1 In support of his submissions, learned advocate Mr. Soparkar has
placed reliance on the judgment of the Delhi High Court in the case of
Dinesh Jindal vs. Assistant Commissioner of Income Tax, Central Circle 20,
Delhi & Ors . , being W rit Petition (Civil) No. 12091 of 2023 decided on
27.05.2024 . Reliance is also placed on the judgment of the Delhi High
Court in the case of Principal Commissioner of Income-tax (Central-1) vs.
Ojjus Medicare (P) Ltd ., [2024] 161 taxmann.com 160 (Delhi) . Finally, he
has also placed reliance on the judgment of the Madras High Court, Bench
at Madurai, dated 24.03.2021 passed in Writ Petition (MD) No. 4327 of
2021.
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4.2 Thus, it is urged that the impugned notice may be set aside.
5. The writ petition is vehemently opposed by the learned Senior
Standing Counsels appearing for the respondent – Department, by
contending that if the issue raised in the present petition is answered in
favour of the assessee, it will have wide ramifications. We have heard them
at length. The following submissions are made by the learned Senior
Standing Counsels appearing on behalf of the revenue:
5.1 It is submitted that the proviso to Section 149 of the Act, which was
introduced by the Finance Act, 2021, will apply only to those categories of
cases in which the Assessing Officer, at the relevant time, was unable to
issue any show-cause notice and had not taken action beyond the time limit
specified under the provisions of clause (b) of sub-section (1) of Section
153A or Section 153C of the Act, which is not the scenario in the instant
petition. It is submitted that in the present case, the search was carried
out on 23.11.2021 and hence the case of the petitioner would fall under the
provisions of Section 153A of the Act.
5.2 In the context of the foregoing submission, reference is made to the
provisions of Section 152 of the Act, more particularly sub-section (3),
which empowers the Assessing Officer to reopen the proceedings pursuant
to the search under Section 132 or requisition made under Section 132A or
a survey conducted under Section 133A of the Act, if such action is taken
on or after the first day of April 2021 but before the first day of September
2024. It is submitted that in the present case, admittedly, the search was
conducted on 23.11.2021, which falls between these dates, and hence the
provisions of Section 149(b) of the Act get attracted. In this regard,
reliance is also placed on the Division Bench judgment of this Court in the
case of Bhavin Kishorebhai Zinzuwadia vs. Assistant Commissioner of
Income-tax, Central Circle-2(3) , [2024] 169 taxmann.com 505 (Gujarat).
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5.3 It is submitted that as per clause (b) to sub-section (1) of Section
149 of the Act, the period of ten years, in a case where the escaped income
is more than Rs. 50 lakhs, would begin after ten years have lapsed from
the end of the relevant assessment year. It is contended that in the instant
case, it was noticed from the incriminating material that the income had
escaped assessment for the year 2012-13, and if the ten years are counted
after excluding the Assessment Year 2022-23, the action of the revenue
would fall within the limitation period of such ten years.
5.4 While referring to Explanation (1) to Section 153A of the Act, it is
contended that the “relevant assessment year” which finds place in the
provisions of Section 153A(b) of the Act cannot be construed by adopting
two different methodologies - one wherein, for calculating the six
assessment years, the period would start from the previous year in which
such search is conducted or requisition is made, and for the very same
assessee, if it is found that the income of Rs.50 lakhs has escaped, for
calculating ten years, the first assessment year has to be ignored. It is
submitted that the expression “from the end of the assessment year” as
mentioned in Explanation (1) to Section 153A of the Act would mean that
it would commence from 1st April, and if we go backwards, in the present
case, the reopening of the assessment for the year 2015-16 would get
encompassed within a period of ten years.
5.5 While placing reliance on the notes of the legislature relating to the
provisions of Section 153A and Explanation (1) to Section 153A of the Act,
it is contended that the word “end” is missing, and hence it is contended
that the intention of the legislature was to exclude the word “end” from the
statute. It is further contended that if appropriate calculation is made, the
calculation of ten years of assessment years under Explanation (1) to
Section 153A of the Act would include the previous year as per the
provisions of Section 153A(1)(b) of the Act. It is contended that
considering the memorandum and explanatory note of the Finance Act,
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2017, the intention of the legislature, even for the purpose of calculating
ten years, is to exclude the search year and it is always six plus four years,
and therefore “end” is to be construed as 1st April for going backward.
5.6 An attempt is also made to distinguish the judgment of the Delhi
High Court in the case of Ojjus Medicare (supra ), by submitting that two
methods cannot be adopted for computation of the six-year block period as
mentioned in Sections 153A and 153C of the Act and for calculation of the
ten-year block period by excluding the previous year from computation of
ten years. Thus, it is urged that this Court may take a different view,
disagreeing with the judgments of the Delhi High Court as well as the
Kerala High Court, and it is urged that the action of the respondent may be
upheld for reopening the Assessment Year 2015-16.
ANALYSIS AND OPINION :
6. We have heard the learned advocates at length. We have also
perused the case laws cited above and have considered the provisions
threadbare.
7. The facts which are established from the pleadings are that a search
action under Section 132 of the Act was undertaken on 08.09.2021, which
indubitably falls in the Financial Year 2021-22. The revenue found some
incriminating material against the present petitioner and accordingly
issued the impugned notices for reopening the assessment for the year
2012-13. The notice has been issued under Section 148 of the Act. With
reference to the date of search, it is necessary to refer to the provisions of
Section 152(3) of the Act, which read as under:
“Section 152(3)
“Where a search has been initiated under section 132 or requisition is
made under section 132A or a survey is conducted under section 133A
[other than under sub-section (2A)] on or after the 1st day of April, 2021
but before the 1st day of September, 2024, the provisions of section 147 to
151 shall apply as they stood immediately before the commencement of
the Finance (No. 2) Act, 2024.”
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Thus, since the date of search falls within the period from the 1st
day of April, 2021 to the 1st day of September, 2024, the provisions of
Sections 147 to 151, as they stood prior to the Finance Act (No. 2), 2024,
shall apply.
8. Section 149 (Old regime) of the Act reads thus:
" Time limit for notice.
149. (1) No notice under section 148 shall be issued for the relevant
assessment year, -
(a) if three years have elapsed from the end of the relevant assessment
year, unless the case falls under clause (b);
(b) if three years, but not more than ten years, have elapsed from the end
of the relevant assessment year unless the Assessing Officer has in his
possession books of account or other documents or evidence which reveal
that the income chargeable to tax, represented in the form of-
(i) an asset,
(ii) expenditure in respect of a transaction or in relation to an event
or occasion, or
(iii) an entry or entries in the books of account,
which has escaped assessment amounts to or is likely to amount to fifty
lakh rupees or more:]
Provided that no notice under section 148 shall be issued at any time in a
case for the relevant assessment year beginning on or before 1st day of
April, 2021, if a notice under section 148 or section 153A or section 153C
could not have been issued at that time on account of being beyond the
time limit specified under the provisions of clause (b) of sub-section (1) of
this section or section 153A or section 153C, as the case may be, as they
stood immediately before the commencement of the Finance Act, 2021:
Provided further that the provisions of this sub-section shall not apply in a
case, where a notice under Section 153-A, or Section 153-C read with
Section 153-A, is required to be issued in relation to a search initiated
under Section 132 or books of account, other documents or any assets
st
requisitioned under Section 132-A, on or before the 31 day of March,
2021."
8.1 Section 149(1)(b) of the Act refers to the limitation period of ten
years, which has elapsed from the end of the “relevant assessment year”.
The relevant assessment year in the present case is 2012-13, which is prior
to the cut-off date of 1st April, 2021, as specified in the first proviso. The
link between Section 149 and Sections 153A and 153C of the Act is found
in the first proviso to Section 149(1) of the Act. The expression “relevant
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assessment year” is explained under Explanation 1 to the fourth proviso to
Section 153A(1). The first proviso to Section 149(1) of the Act bars the
issuance of notice under Section 148 of the Act for the relevant assessment
year beginning on or before 01st April, 2021, if a notice under Section 148
or Section 153A or Section 153C of the Act could not have been issued at
that time on account of it being beyond the time limit specified under the
provisions of clause (b) of sub-section (1) of Section 149 of the Act or
Section 153A or Section 153C of the Act. In the present case, the notice
under Section 148 of the Act emanates from the search proceedings
undertaken under Sections 132 / 132A of the Act, and hence the provisions
of Sections 153A and 153C of the Act would get attracted, and the
reassessment of the petitioner has to be examined by keeping in mind the
limitation provided under Section 153C of the Act, which is pari materia to
Section 153A of the Act.
At this stage, we may refer to the provisions of Section 153A(1)(b)
and Explanation (1) to Section 153A of the Act, on which the learned
advocates have premised their submissions. Section 153A(1)(b) and
Explanation (1) to Section 153A of the Act read as under:
“ SECTION 153A
Assessment in case of search or requisition.
153A. (1) Notwithstanding anything contained in section 139, section 147,
section 148, section 149, section 151 and section 153, in the case of a
person where a search is initiated under section 132 or books of account,
other documents or any assets are requisitioned under section 132A after
the 31st day of May, 2003, the Assessing Officer shall-
XXX XXX XXX
(b) assess or reassess the total income of six assessment years
immediately preceding the assessment year relevant to the previous year
in which such search is conducted or requisition is made and for the
relevant assessment year or years:
Provided that the Assessing Officer shall assess or reassess the total
income in respect of each assessment year falling within such six
assessment years and for the relevant assessment year or years):
Provided further that assessment or reassessment, if any, relating to any
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assessment year falling within the period of six assessment years and for
the relevant assessment year or years referred to in this sub-section
pending on the date of initiation of the search under section 132 or making
of requisition under section 132A, as the case may be, shall abate
Provided also that the Central Government may by rules made by it and
published in the Official Gazette (except in cases where any assessment or
reassessment has abated under the second proviso, specify the class or
classes of cases in which the Assessing Officer shall not be required to
issue notice for assessing or reassessing the total income for six
assessment years immediately preceding the assessment year relevant to
the previous year in which search is conducted or requisition is made and
for the relevant assessment year or years
Provided also that no notice for assessment reassessment shall be issued
by the Assessing Officer for the relevant assessment year or years unless-
(a) the Assessing Officer has in his possession books of account or other
documents or evidence which reveal that the income, represented in the
form of asset, which has escaped assessment amounts to or is likely to
amount to fifty lakh rupees or more in the relevant assessment year or in
aggregate in the relevant assessment years,
(b) the income referred to in clause (a) or part thereof has escaped
assessment for such year or years, and
(c) the search under section 132 is initiated or requisition under section
132A is made on or after the 1st day of April, 2017
Explanation 1 For the purposes of this sub-section, the expression
"relevant assessment year shall mean an assessment year preceding the
assessment year relevant to the previous year in which search is
conducted or requisition is made which falls beyond six assessment years
but not later than ten assessment years from the end of the assessment
year relevant to the previous year in which search is conducted or
requisition is made.”
8.2 The provisions of Sections 153A / 153C of the Act find place in the
proviso to Section 149 of the Act and, hence, the limitation as provided in
Sections 153A / 153C of the Act gets triggered upon the initiation of
assessment proceedings emanating from a search under Sections 132 /
132A of the Act. We may, at this stage, mention that the Delhi High Court
as well as the Madras High Court has already considered the implications
of Explanation (1) to Section 153A of the Act to the limitation and the
expression “relevant assessment year” used therein in Explanation (1) to
Section 153A of the Act. The Delhi High Court, in the case of Ojjus
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Medicare (supra ), after considering an array of judgments of other High
Courts as well as of the Supreme Court and upon a threadbare
consideration and analysis of the statutory provisions of Sections 153A,
148 and 149 of the Act, has held thus:
“88 Section 153A replicates the basis on which the six AYs’ are to be
identified and computed with the solitary distinction being that in the case
of the searched person, the six AYs’ are liable to be computed from the AY
pertaining to the FY in which the search was conducted. The starting point
for the purpose of identifying the six AYs’ in the case of section 153A
would thus turn upon the year of search as opposed to the handover of
material which is spoken of in the First Proviso to section 153C. If one
were to therefore assume that a search took place on a person between 01
April 2021 to 31 March 2022, the pertinent AY would become AY 2022-23
and the corresponding six AYs’ would by as follows:
Computation of the six-year block period as
provided under section 153C of the Act
No of years
AY 2021-22 1
AY 2020-21 2
AY 2019-20 3
AY 2018-19 4
AY 2017-18 5
AY 2016-17 6
89. That takes us then to the issue of identifying the "relevant assessment
year" for the purposes of computing the ten year block. Explanation 1 to
section 153A specifies the manner in which the entire ten AY period is to
be computed. While the computation of six AYs follows the position as
enunciated and identified above, Explanation I prescribes that the ten AYs'
would have to be computed from the end of the AY relevant to the FY in
which the search was conducted or requisition made The ten AY period
consequently is to be reckoned from the end of the AY pertaining to
the previous year in which the search was conducted as distinct
from the preceding year which is spoken of in the case of the six
relevant AYs.
90. Viewed in that light, and while keeping the period of 01 April 2021 to
31 March 2022 as the constant, the relevant AY would be AY 2022-23. The
ten AYs would have to be computed from 31 March 2023 with the said
date indubitably constituting the end of the AY relevant to the previous
year of search. Viewed in light of the above, the block period of 10 AYs
would be as follows.-
Computation of the six-year block period as
provided under section 153C read with Section
No of years
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153A of the Act
AY 2022-23 1
AY 2021-22 2
AY 2020-21 3
AY 2019-20 4
AY 2018-19 5
AY 2017-18 6
AY 2016-17 7
AY 2015-14 8
AY 2014-15 9
AY 2013-14 10
91 Tested on the aforesaid precepts, it would be manifest that AY
2022-23 would form the first year of the block of ten AYs’ terminating in
AY 2013-14. We, in this regard also bear in consideration the following
instructive passages as appearing in the decision handed down by a
learned Judge of the Madras High Court in A.R.Safiullah. We deem it
appropriate to extract the following paragraphs from that decision:-
“9 Explanation-I is clear as to the manner of computation of the ten
assessment years. It clearly and firmly fixes the starting point. It is the end
of the assessment year relevant to the previous year in which search is
conducted or requisition is made. There cannot be any doubt that since
search was made in this case on 10.04.2018, the assessment year is 2019-
20. The end of the assessment year 2019-20 is 31.03.2020. The
computation of ten years has to run backwards from the said date i.e.
31.03.2020. The first year will of course be the search assessment year
itself. In that event, the ten assessment years will be as follows:
st
1 Year 2019-20
nd
2 Year 2018-19
rd
3 Year 2017-18
th
4 Year 2016-17
th
5 Year 2015-16
th
6 Year 2014-15
th
7 Year 2013-14
th
8 Year 2012-13
th
9 Year 2011-2012
th
10 Year 2010-2011
The case on hand pertains to AY 2009-10. It is obviously beyond the
ten year outer ceiling limit prescribed by the statute. The terminal point is
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the tenth year calculated from the end of the assessment year relevant to
the previous year in which search is conducted. The long arm of the law
can go up to this terminal point and not one day beyond. When the statute
is clear and admits of no ambiguity, it has to be strictly construed and
there is no scope for looking to the explanatory notes appended to statute
or circular issued by the department.
10. In the case on hand, the statute has prescribed one mode of
computing the six years and another mode for computing the ten
years. Section 153A(1)(b) states that the assessing officer shall
assess or reassess the total income of six years immediately
preceding the assessment year relevant to the previous year in
which search is conducted . Applying this yardstick, the six years would
go up to 2013-14. The search assessment year, namely, 2019-20 has to be
excluded. This is because, the statute talks of the six years preceding the
search assessment year. But, while computing the ten assessment years,
the starting point has to be the end of the search assessment year. In other
words, search assessment year has to be including in the latter case. It is
not for me to fathom the wisdom of the parliament. I cannot assume that
the amendment introduced by the Finance Act, 2017 intended to bring in
four more years over and above the six years already provided within the
scope of the provision. When the law has prescribed a particular length, it
is not for the court to stretch it. Plasticity is the new mantra in
neuroscience, thanks to the teachings of Norman Doidge. It implies that
contrary to settled wisdom, even brain structure can be changed. But not
so when it comes to a provision in a taxing statute that is free of ambiguity
Such a provision cannot be elastically construed.
11. One other contention urged by the standing counsel has to be dealt
with. It is pointed out that the petitioner has invoked the writ jurisdiction
at the notice stage Since the petitioner has demonstrated that the subject
assessment year lies beyond the ambit of the provision, the respondent has
no jurisdiction to issue the impugned notice Once lack of jurisdiction has
been established, the maintainability of the writ petition cannot be in
doubt."
In our considered opinion, the decision in A.R Safiullah correctly expounds
the legal position and the interpretation liable to be accorded to the
identification of the ten AYs which are spoken of in sections 153A and
153C.”
8.3 Thus, it is precisely held herein-above that the statute prescribes
different modes of computation for six years and ten years. We reiterate
that the provisions of Section 153A(1)(b) of the Act stipulate that the
Assessing Officer shall assess or reassess the total income of six years
immediately preceding the assessment year relevant to the previous year
in which the search is conducted. However, the ten assessment year
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period, consequently, is to be reckoned from the end of the assessment
year pertaining to the previous year in which the search was conducted, as
distinct from the preceding year which is spoken of in the case of the six
relevant assessment years. Thus, the contention with regard to the
computation of six years as well as ten years under the provisions of
Section 153A of the Act has already been gone into by the Delhi High
Court as well as the Madras High Court, and we have no convincing reason
to take a divergent view from the view expressed herein-above. Applying
the aforesaid computation to the facts of the present case, taking the date
of the search as 08.09.2021 during the Financial Year 2021-22, the
Assessment Year 2022-23 will become the first assessment year and, in the
same manner, the Assessment Year 2013-14 will become the tenth
assessment year. Thus, the year under consideration, namely, Assessment
Year 2012-13, for which the impugned notice has been issued under
Section 148 of the Act, would fall beyond the period of ten years
prescribed under the statute as it stood immediately before the
commencement of the Finance Act, 2021, and hence, on this count, the
impugned notice can be said to be barred by limitation.
8.4 However, since an additional submission has been advanced by
learned Senior Standing Counsel Mr. Patel to the extent that the
expression used in the proviso to Section 149(1) of the Act, to the extent
that “if a notice under Section 148 or Section 153A or Section 153C could
not have been issued at that time on account of being beyond the time limit
specified”, would mean that the Assessing Officer is competent to issue
notice under Section 148 of the Act, since he would only gain knowledge of
incriminating material against the third person after the search, and the
limitation prescribed under the provisions of Sections 153A or 153C of the
Act cannot restrict his power, and such limitation will start running from
the day of search. We fail to grasp the said submission and the impact of
such submission on the limitation prescribed in the first proviso, which
relates to Sections 153A or 153C of the Act. Hence, it is not dealt.
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9. For the foregoing reasons, the impugned notice dated 24.02.2023
issued under Section 148 of the Income-tax Act, 1961 by the respondent –
Department seeking to reopen the income-tax assessment of the petitioner
for the respective assessment year is hereby quashed and set aside. The
petitions are allowed accordingly. RULE is made absolute accordingly,
with no order as to costs.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
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