01Facts
The petitioner filed his income tax return for A.Y. 2019-20 on 27.09.2019
p. 2On 15.02.2019, the petitioner and a joint purchaser bought agricultural land at Moje Racharda for Rs. 1,12,00,000/-
p. 2Following a search action under Section 132 of the Income Tax Act at the premises of a real estate broker (City Estate Management India), authorities seized an inquiry register containing a noting dated 28.11.2018 regarding the same land survey number but listing an "asking rate" significantly higher than the sale deed value
pp. 2-3Based solely on this noting and the broker's statement, the Respondent issued a notice under Section 148 on 27.03.2025, alleging the petitioner paid "on-money" of over Rs. 3.32 crores
p. 3The petitioner challenged the notice, arguing there was no live link between the seized material and his actual transaction
pp. 4-502Issues
i.1. Whether the noting in a third-party broker's inquiry register, which predates the actual transaction and mentions an unrelated individual, constitutes "information suggesting escapement of income" under Section 148 to justify reopening assessment
p. 3 / para 4.1ii.2. Whether the jurisdictional requirement that seized material must "pertain to" or "relate to" the assessee was satisfied
p. 5 / para 5.203Law Applied
Section 148 of the Income Tax Act, 1961, regarding the reopening of assessment based on "information" suggestings escapement
p. 2Explanation 2(iv) to Section 148, which deems information to exist when seized documents "pertain to" or "relate to" the assessee
p. 7Evidentiary presumptions under Sections 132(4A) and 292C of the Act regarding the truthfulness of seized documents
p. 6, 10Precedent from Naliniben Jagdishkumar Gandhi v. ITO, which requires a "live link" connecting the assessee to the seized material beyond mere survey numbers
p. 12Provisions in the judgment · 5
Income Tax Act, 1961 Section 131Section 132Section 148Section 153CSection 292C
04Reasoning
The court found that the "live link" was absent because the register noting dated 28.11.2018 predated the petitioner’s registered sale deed of 15.02.2019 by nearly three months
p. 9The broker himself admitted in a statement under Section 131 that such registers merely listed "asking rates" for land available for sale rather than concluded transactions
p. 10Crucially, the register entry mentioned "Sanjay Thakkar," a person unknown to the petitioner, and referred to a different land area than what was actually purchased
p. 11The court observed that the Revenue failed to conduct any inquiry with the person named in the register before targeting the petitioner
p. 12Consequently, the statutory presumption under Section 292C was rebutted by the broker's own testimony that entries often represented market surveys rather than financial realities
pp. 10-1105Holding
The Court held that the reassessment was based on mere conjectures and surmises without a direct or indirect nexus between the seized document and the petitioner
p. 14The court answered the issues in the negative, ruling that the jurisdictional conditions for reopening the assessment were not met
p. 14The impugned notice dated 27.03.2025 under Section 148 for A.Y. 2019-20 was quashed and set aside
p. 14The petition was allowed and the Rule was made absolute
p. 14Original Court PDF
CHAKRAVARTI MAHESH PATELvsINCOME TAX OFFICER WARD-4(2)(1)
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in
