Gujarat High Court
Jaydevi Ispat Corp vs Assistant Commissioner Of Income Tax, ... on 18 November, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/8351/2022 ORDER DATED: 18/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8351 of 2022
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JAYDEVI ISPAT CORP
Versus
ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1,
BHAVNAGAR
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Appearance:
MR B S SOPARKAR(6851) 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 A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 18/11/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. By way of the present writ petition, the petitioner has inter alia prayed for the following reliefs :
"7(a) quash and set aside the impugned notices and order at Annexure- 'A1,A2 and A3' to this Petition;
(b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the order and notice at Annexure- A2 and A3 to this petition and stay further proceedings for assessment for A.Y. 2018-19;
(c) any other and further relief deemed just and proper be granted in the interest of justice;"
2. At the outset, learned advocate Mr. B.S. Soparkar for the petitioner has submitted that the issue raised in the present writ petition is squarely covered by the decision of the Coordinate Bench vide judgment and order dated 01.10.2024 passed in Special Civil Application No. 12704 of 2024. He has invited attention of this Court to the impugned Notice issued under Section 148A(b) Income Tax Act, 1961 (for short 'the Act') and the impugned order under Section 148A(d) of the Act. He has further submitted that in fact the petitioner has been called upon by the Assessment Officer to give information for verification which is not the Page 1 of 6 Uploaded by Radhika Srinivasan(HCD0042) on Thu Nov 20 2025 Downloaded on : Thu Nov 20 22:13:30 IST 2025 NEUTRAL CITATION C/SCA/8351/2022 ORDER DATED: 18/11/2025 undefined requirement of the provisions of Section 148A(b) of the Act. He has submitted that this Court, after considering the decision of this Court in the case of Safal Constructions India Private Limited through Director Rupesh Balvantbhai Brahmbhatt Vs. Assistant Commissioner of Income Tax Cent Circle 1(4) Ahmedabad in Special Civil Application No. 10111 of 2023 and the decision of Calcutta High Court in case of Champa Impex Private Limited Vs. Union of India [2024] 158 taxmann.com 629 (Calcutta) as well as decision of Rajasthan High Court in case of Mohd. Sajid Bains Vs. The Income Tax Officer [2024]159 taxman.com 559 (Rajasthan), laid quietus to the issue regarding the information has been called upon by the Assessing Officer from the assesse, while issuing notices under Section 148A(b) of the Act. Thus, it is urged that the impugned notices may be quashed and set aside.
3. Per contra, learned advocate Mr. Varun K. Patel appearing for the respondent has submitted that the impugned notices may not be set aside, as the Assessing Officer, in his wisdom, has called upon the petitioner to provide the ledgers of all the transactions with regard to M/s.Sangini Corporation, which has made cash purchases of Rs.15,94,560/- during the Financial Year 2017-18. It is also submitted that M/s.Nandkishor Corporation has made cash purchases of Rs.1,21,61,320/-. It is therefore submitted that this information would be vital in order to further undertake the assessment.
4. We have heard learned advocates appearing for the respective parties.
5. At the outset, we are of the opinion that the present writ petition is required to be allowed by quashing and setting aside the impugned notices dated 23.03.2022 and 31.03.2022 under the provisions of Sections 148, Page 2 of 6 Uploaded by Radhika Srinivasan(HCD0042) on Thu Nov 20 2025 Downloaded on : Thu Nov 20 22:13:30 IST 2025 NEUTRAL CITATION C/SCA/8351/2022 ORDER DATED: 18/11/2025 undefined 148A(b) as well as 148A(d) of the Act, in light of the decision of the Coordinate Bench of this Court vide judgment and order dated 01.10.2024 in Special Civil Application No. 12704 of 2024.
6. The only issue which is canvassed before us and falls for deliberation, is whether the Assessing Officer can call upon the assessee to tender information for verification qua the details sought under the provisions of Section 148A(b) of the Act and thereafter pass an order under Section 148A(d) of the Act or not. This Court, after examining the provisions of Section 148A(b) of the Act and considering the judgments delivered by this Court as well as by the High Courts of Calcutta and Rajasthan, has held thus:
"8. On perusal of the above details details called for by the respondent in the notice issued under Section 148A(b) of the Act, it would be germane to refer to Section 148A(b) of the Act, which reads as under :
"Section 148A(b): provide opportunity of being heard to the assessee, [***] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a)."
9. On perusal of the above provisions, it appears that the Assessing Officer before issuing the notice under Section 148 of the Act has to conduct the inquiry with prior approval of the specified authority with respect to the information which suggest that the income chargeable to tax has escaped the assessment and after such inquiry, issued the notice under Section 148A(b) of the Act to provide an opportunity of being heard to the assessee by serving a show-cause notice. However, in the facts of the case, the respondent has issued the notice under clause (b) of the Section 148A of the Act as if the inquiry is to be conducted under clause (a) of Section 148A of the Act and therefore, the impugned notice cannot be commensurate the requirement of clause (b) of Section 148A of the Act as such notice could have been issued only after conducting the inquiry on part of the respondent-Assessing Officer.
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10. In case of Safal Constructions India (Supra), this Court in similar facts, has held as under :
"[36] Considering the above facts, notice dated 28th March 2023 along with the Annexures issued under Section 148A(b) of the Act cannot be said to be the notice requiring the assessee to provide an opportunity of hearing to show cause as to why the notice under Section 148 of the Act should not be issued on the basis of the information which suggests that the income chargeable is escaped assessment. The notice is only in the nature of inquiry as contemplated under Section 148A(a) of the Act, which provides that before issuance of any notice under Section 148 of the Act, the Assessing Officer shall conduct an inquiry, if required, with prior approval of the specified authority with respect to the information which states that the income chargeable is escaped assessment. Therefore, though the notice was issued under the provisions of Section 148A(b) of the Act, in fact, such notice is under Section 148A(a) of the Act as the ingredients of notice which requires as per the statutory provisions of Section 148A(b) are not mentioned. The Assessing Officer has not provided any details with regard to income which has escaped assessment, but has called for the details for the period from the Financial Year 2014-15 to 2015-16 without mentioning the income as escaped assessment for the relevant Assessment Year 2016-17.
[37] The Assessing Officer, for the first time, in the order passed under Section 148A(d) of the Act has mentioned about bifurcation of the total transaction of Rs.791.22 Crores out of which credit entries amounting to Rs.86,63,62,755/- was mentioned pertaining to the period from 1st April 2015 to 27th April 2015 in the Suspicious Transaction Report.
[38] On perusal of the impugned order under Section 148A(d) of the Act, the Assessing Officer did not consider any of the contentions raised on behalf of the assessee on merits and reiterated only extract from the Suspicious Transaction Report in para 6.2 of the order. The assessee has been given the entire details of transaction in reply along with the annexures, however, the Assessing Officer did not consider the same and only observed that the assessee did not adduce any supporting document establishing the identity of the parties, genuineness of transaction and creditworthiness of the counter parties justifying the bank account transactions carried out are related to the business parties of the assessee. On perusal of the record, it appears that the petitioner - assessee has submitted all the details along with reply filed on 9th May 2023,. In such circumstances, in view of the above facts, the impugned assessment order under Section 148A(d) of the Act is not sustainable as the Assessing Officer has failed to set out any opinion on the basis of the available information and material on record to arrive at the finding that it is a fit case to reopen the assessment under Clause Page 4 of 6 Uploaded by Radhika Srinivasan(HCD0042) on Thu Nov 20 2025 Downloaded on : Thu Nov 20 22:13:30 IST 2025 NEUTRAL CITATION C/SCA/8351/2022 ORDER DATED: 18/11/2025 undefined
(b) of Section 148A of the Act. In the case on hand, we are not required to examine the correctness of the contentions qua the facts of the case as raised on behalf of the petitioner as it would be premature as the case of the petitioner is based upon the legal contentions that the notice under Section 148A(b)of the Act is in the nature of notice under Section 148A(a) of the Act and that the notice issued under Section 148A(b) is without considering the contentions raised by the assessee in the reply to the notice under Section 148A(b) of the Act as per Clause (c) of Section 148A of the Act. On perusal of the notice under Section 148A(b) of theAct, it is clearly seen that the annexures do not contain any information, it is a questionnaire requiring the petitioner to provide details as sought for and therefore, it was an intention of the Assessing Officer who was to conduct an inquiry after receiving information from the assessee and therefore, notice is deemed to be the notice under Section 148A(a) of the Act. Thus, there is a gross procedural error from the very inception of the procedure rendering the same is bad in law.
[39] For the reasons recorded as above, as the notice dated 28th March 2023, though stated to be issued under Clause (b) of Section 148A of the Act, the same is, in fact, a notice under Clause (a) of Section 148A of the Act can be treated as such. As the time to issue notice under Section 148A(b) of the Act has already expired, no purpose would be served by issuing direction to the Assessing Officer to conduct an inquiry considering the reply of the assessee as to whether to issue notice under Section 148A(b) of the Act or not."
11. In view of the above, we are of the opinion that the impugned notice issued under Section 148A(b) of the Act could not have been issued for verification on the part of the respondent-Assessing Officer and therefore, the same would fail and accordingly, the petition succeeds and the impugned notice dated 05.03.2024 and the consequential order under Section 148A(d) of the Act and the notice under Section 148 are hereby quashed and set aside. However, we make it clear that if the respondent wishes to re-initiate the proceedings under the provisions of the law, this order would not come in way and the respondent would be at liberty to initiate such proceedings as per the provisions of the Act. Rule is made absolute to the aforesaid extent. No orders as to cost."
7. In the present case also, the Assessing Officer had called upon the petitioner to provide all the information regarding the transactions with M/s.Sangini Corporation and M/s.Nandkishor Corporation for the Financial Year 2017-18 and further to explain the amounts of Rs.15,94,560/- and Rs.1,21,61,320/- reflected in the books of accounts and in the return of income.
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8. In view of the foregoing reasons, since the issue is no more res integra, the writ petition is allowed. The impugned notices dated 23.03.2022 and 31.03.2022 as well as the order dated 31.03.2022 are hereby quashed and set aside. Rule is made absolute.
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