Gujarat High Court
Ashit Haribhai Vora vs Office Of The Assistant Commissioner Of ... on 1 May, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 2864 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
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ASHIT HARIBHAI VORA
Versus
OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE 1(2) AHMEDABAD
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Appearance:
MR S M DAVE(11268) for the Petitioner(s) No. 1
MR. JAIMIN R DAVE(7022) for the Petitioner(s) No. 1
MS HIRVA R DAVE(10742) for the Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 01/05/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr. Jaimin R Dave for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent.
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2. Having regard to the controversy which is in narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.
3. Rule returnable forthwith. Learned advocate Mr. Varun Patel waives service of notice of rule for respondent.
4. The petitioner has preferred this petition under Article 226 of the Constitution of India challenging the impugned notice dated 31.03.2021 bearing No. ITBA/AST/S/148/2020-21/1032080806(1) issued u/s. 148 of the Income Tax Act, 1961 [for short 'the Act'] proposing to reopen the assessment for assessment year 2016-17 and impugned order dated 25.02.2022 bearing No. ITBA/AST/S/17/2021- Page 2 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined 22/1040135888(1) disposing of the objections raised by the petitioner against notice issued u/s. 148 of the Act.
5. Brief facts of the case are that:
5.1 The petitioner field original return on 29.03.2017 declaring total income at Rs. 1,93,250/- for the Assessment Year 2016-17.
5.2 Thereafter, the petitioner received an Email along with a notice issued u/s. 148 of the Act dated 31.03.2021 seeking to reopen the assessment for the Assessment Year 2016- 17 bearing Notice Number ITBA/AST/S/148/2020-21/1032080806(1).
5.3 It is the case of the petitioner that notice issued u/s. 148 of the Act Page 3 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined dated 31.03.2021 was in the name of one Mrs. Giraben Atulbhai Shah, whose PAN Number is shown in the notice as ALHPS1801P whereas, the PAN Number of the petitioner is ACJPV1280C.
5.4 The petitioner therefore, did not file any reply as the invalid notice was received by the petitioner. The petitioner thereafter received another notice under section 142(1) of the Act on 06.10.2021 calling upon the petitioner to submit the return of income.
5.5 The petitioner, to comply with the procedural requirement, uploaded his return of income. Thereafter, on 15.11.2021, the petitioner was provided with reasons for reopening of the Page 4 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined assessment. The petitioner, therefore, realizing that the notice which was received by the petitioner was in name of some other person, raised an objection on 12.01.2022 contending that the notice served upon the petitioner pertains to some other assessee and therefore, it was not open for the respondent to proceed with the reassessment proceedings for the year under consideration and the notice being void, can never be considered as served.
Being aggrieved by the aforesaid notice, the petitioner has preferred this petition with a prayer to quash and set aside the reassessment proceedings initiated by the respondents for the Assessment Year 2016-17.
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6. This Court [Coram: Hon'ble Mr. Justice J.B.Pardiwala and Hon'ble Ms. Justice Nisha Thakore] passed the following order on 14.02.2024:
"We have heard Mr. Jaimin Dave, the learned counsel appearing for the writ-applicant.
Let Notice be issued to the respondent for final disposal, returnable on 15.03.2022.
Let there be an ad-interim order in terms of Paragraph-7(c).
Direct service is permitted."
7. It appears that during pendency of this petition, the respondent passed the order dated 25.02.2022 disposing the objection filed by the petitioner which was placed on record along with affidavit of the respondent affirmed on 10.08.2024. The petitioner therefore prayed for the Page 6 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined amendment and also challenged the order dated 25.02.2022 disposing of the objection which was granted by this Court vide order dated 07.04.2025.
8. Learned advocate Mr. Jaimin Dave for the petitioner pointed out that along with Email dated 31.03.2021, a notice bearing number ITBA/AST/S/148/2020- 21/1032080806(1) was served upon the petitioner which was not in name of the petitioner but in name of one Giraben Atulbhai Shah. It was therefore submitted that the petitioner was never served with a notice under section 148 of the Act. It was submitted that the petitioner therefore did not respond to the notice issued and only after the notice under section 142(1) dated 06.10.2021 was issued, the petitioner was informed that Page 7 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined notice under section 148 of the Act was issued on 31.03.2021 and the petitioner was asked to file the return of income. The petitioner, therefore to complete the procedural requirement, uploaded the return of income for the year under consideration. Thereafter, the respondent provided the reasons recorded for reopening. It was submitted that as the petitioner was never served with a copy of the notice under section 148, the petitioner raised the objection on 12.01.2022 that no notice was issued in name of the petitioner and therefore, the proceedings initiated for reopening should be dropped.
7.1 Learned advocate Mr. Jaimin R. Dave referred to and relied upon the decision of this Court in case of Giraben Page 8 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined Atulbhai Shah vs. Office of the Assistant Commissioner of Income Tax, Central Circle 1(2), Ahmedabad in Special Civil Application No. 26/2022 to point out that in this case, the notice was quashed and set aside as the reason for reopening of assessment proceedings were found to be factually incorrect. It was also submitted that in case of the petitioner when no notice was served by the respondent in name of the petitioner no reassessment proceedings can be continued.
9. On the other hand, learned Senior Standing Counsel Mr. Varun K. Patel submitted that on the basis of the information received on the insight portal, the respondent has issued the notice as required under section 148 of the Act which was uploaded Page 9 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined on the system to be communicated to the petitioner but, due to technical glitch, the notice in name of Giraben Atulbhai Shah was communicated to the petitioner instead of the notice which was issued by the respondent.
9.1 Reliance was made to the following averments made in the affidavit-in-reply filed on behalf of the respondent:
"13.With reference to contentions in para 3.2, the respondent denies each and every allegation, averment and contention raised in this para. It is submitted that the notice u/s. 148 of the Income Tax Act, 1961 was issued as per the provisions of the Income Tax Act, 1961 and therefore impugned notice is just proper and legal.Page 10 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025
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14. With reference to contentions in para 3.3. the respondent denies each and every allegation, averment and contention raised in this para. It is submitted that the petitioner has filed its belated return of income u/s. 139 of the Income Tax Act,1961 on 29.03.2017 declaring total income at Rs. 1,93,250/-. No scrutiny assessment under section 143(3) of the Income Tax Act, 1961 or under any other section was undertaken in this case. Information has been received from DDIT(Inv)-1(2), Ahmedabad through the VRU on INSIGHT portal. Hereto annexed and marked as Annexure R-4 is the copy of information flagged on INSIGHT portal. From the information it is seen that the assessee has sold immovable properties for an aggregate value amounting to Rs. 7,47,00,000/-. On verification of case record for the year under consideration, it is seen from the return filed by the assessee that gross total income for A.Y. 2016- 17 is merely Rs. 3,42,894/- and Page 11 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined capitals gain of only Rs. 3536/- have been offered to tax as Short term capital gain u/s. 111A of the Act on account of sale of shares. From the above, it is clear that the assessee had not shown sale consideration of Rs. 7,47,00,000/- and did not offer the same for tax in the return of income filed for the year under consideration. Considering the facts of escapement of income, the necessary approval was obtained from the appropriate authorities in the name of Asit Haribhai Vora PAN:PAN:ACJPV1280C after recording reasons. Thereafter, notice u/s. 148 was issued on 31.03.2021 in the name of the petitioner. PAN ACJPV1280C, vide DIN & Notice No. ITBA/AST/S/148/2020- 21/1032078798(1). However, the notice u/s. 148 of the income Tax Act dated 31.03.2021 issued was in the name of Mrs. Giraben Atulbhai Shah due to technical glitch in the Income Tax Portal. It is important to note here that assessment proceedings have been Page 12 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined carried out at Assessment worklist on Income Tax Portal in the name of Asit Haribhai Vora, PAN: ACJPV1280C. From the above, it is seen that the case of the assessee assessee/petitioner has been opened after independent application of mind by the AO. The opinion has been formed on the basis of correct facts/law and procedural requirement of the Act have been duly complied with. The information provided by DDIT(Inv.) Unit 1(2) Ahmedabad/flagged on INSIGHT portal have been thoroughly pursued along with copy of material relevant to present case. The same have been summarized in the reasons for reopening recorded prior to the issuance of notice u/s. 148 of the Act. From the same, 'reason to believe' that income has escaped assessment in concerned AY has been logically derived. Thus, only after deriving requisite satisfaction regarding escapement of income on the basis of information/material supplied Page 13 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined by investigation wing of the department, reopening has been initiated. The same is evident from reasons provided for reopening. In view of the above, the notice under section 148 of the income Tax Act is completely valid and legal.
15. With reference to contentions in para 3.4 the respondent denies each and every allegation, averment and contention raised in this para. It is submitted that the notice u/s. 148 of the Income Tax Act dated 31.03.2021 issued was in the name of Mrs. Giraben Atulbhai Shah due to technical glitch in the income tax portal. It is important to note here that assessment proceedings have been carried out at Assessment Worklist on Income Tax Portal in the name of Asit Haribhai Vora, PAN ACJPV1280C. It is further submitted that notice u/s. 148 was issued on 31.03.2021 in the name of the petitioner, PAN ACJPV1280C, vide DIN and Notice ITBA/AST/S/1482020- Page 14 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined 21/1032078798(1). From the above it is clear that the notice u/s. 148 of the Act issued was in the name of Ms. Giraben Atulbhai Shah due to technical glitch in the income tax portal, not clerical error.
16. With reference to contentions in para 3.5 to 3.8 the respondent denies each and every allegation, averment and contention raised in these paras. It is submitted that in view of the above discussion, the notice u/s. 148 of the Income Tax Act,1961 was issued as per the provisions of the Income Tax Act,1961. The Notice u/s. 148 of the Act is therefore legal."
9.2 It was therefore submitted that once the respondent has issued the notice and uploaded on the system, the respondent cannot be said to have not issued the notice and only because the Page 15 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined system has served a wrong notice upon the petitioner, it cannot be said that there is no initiation of reassessment proceedings in accordance with law.
10. Having heard learned advocates for the respective parties, it is not in dispute that the notice served upon the petitioner along with Email dated 31.03.2021 was in name of Giraben Atulbhai Shah. However, it is pertinent to note that respondent, while disposing of the objections in the order dated 25.02.2022 has observed as under:
"After obtaining approval from competent authority, notice u/s. 148 was issued on 31.03.2021 in the name of assessee PAN ACJPV1280C, vide DIN & Notice No. ITBA/AST/S/148/2020- 21/1032078798(1) which was duly Page 16 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined served upon the assessee. From the above, it is clear that the contention of the assessee that notice u/s. 148 of the Act belonging to the other person i.e. Giraben Atulbhai Shah PAN:ALHPS1801P, is wrong and baseless. In view of the above, the objection raised by the assessee on this count is not sustainable and hence rejected."
11. The above observation of the respondent is contrary to the record and there is no justification given in the order disposing the objection for service of the notice in name of other assessee. Merely because the notice is issued in name of the assessee but not served, cannot be considered as an effective issuance and service of notice for reopening of the assessment. Therefore, in absence of any notice issued and served upon the assessee, the Page 17 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025 NEUTRAL CITATION C/SCA/2864/2022 JUDGMENT DATED: 01/05/2025 undefined respondent cannot be said to have assumed the jurisdiction to reopen the assessment for the Assessment Year 2016-17.
12. In view of the above foregoing reasons, the petition succeeds and is accordingly allowed. The reassessment proceedings initiated by the respondents are hereby quashed and set aside in absence of any notice in name of the assessee being served by the respondent till date. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) (D.N.RAY,J) JYOTI V. JANI Page 18 of 18 Uploaded by JYOTI V. JANI(HC00213) on Mon May 12 2025 Downloaded on : Sat May 17 06:31:17 IST 2025