Gujarat High Court
Bipinbhai Maneklal Shah vs Income Tax Officer Ward 2(1)(2) on 7 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/7187/2024 JUDGMENT DATED: 07/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7187 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting No Yes
✔
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BIPINBHAI MANEKLAL SHAH
Versus
INCOME TAX OFFICER WARD 2(1)(2)
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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 BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 07/10/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent.
2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Varun K. Patel waives service of notice of rule on behalf of the respondent.
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3. Having regard to the controversy involved which is in a narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.
4. By this petition under Articles 226 of the Constitution of India, the petitioner has prayed to quash and set aside the impugned notice issued under Section 148A(b) of the Income Tax Act, 1961 (For Short "the Act") dated 23.03.2024 as well as impugned order passed under Section 148A(d) of the Act dated 30.03.2024 as also the notice issued under Section 148 of the Act dated 30.03.2024 for Assessment Year 2020-21.
5. The brief facts of the case are as under :-
5.1. The petitioner has filed its return of income under Section 139 (1) of the Act for the Assessment Year 2020-21 declaring total income of Rs.17,46,410/-. The return of income was filed along with computation of income as well as Tax Audit Report in Form 3CB, audited Balance Sheet and Profit and Loss Account. 5.2. It is the case of the petitioner that subsequent to filing of income tax return, the respondent issued notice under Section Page 2 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Wed Oct 08 2025 Downloaded on : Thu Oct 09 00:32:26 IST 2025 NEUTRAL CITATION C/SCA/7187/2024 JUDGMENT DATED: 07/10/2025 undefined 148A(b) on 23.03.2024 on the basis of the information that the petitioner has made financial transactions of more than Rs.12752 crores and has not filed the return of income. It is further the case of the petitioner that time till 29.03.2024 was given to respond to the said notice.
5.3. It was submitted by the petitioner that he was not informed about the issuance of the notice by way of SMS on phone or through E-mail. It was further submitted that due to insufficient time provided as well as in absence of any information about the issuance of notice dated 23.03.2024, the petitioner was unable to file reply and adequately rebut the fresh allegation impugned in the notice dated 23.03.2024.
Thereafter the respondent passed the impugned order under Section 148A(d) of the Act 30.03.2024 alleging unexplained transaction to the tune of Rs.12752 crores and on the same date i.e. on 30.03.2024 also issued notice under Section 148 of the Act seeking to reopen the assessment for the Assessment Year 2020-21.
5.4. In view of such facts, the order dated 30.03.2024 passed Page 3 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Wed Oct 08 2025 Downloaded on : Thu Oct 09 00:32:26 IST 2025 NEUTRAL CITATION C/SCA/7187/2024 JUDGMENT DATED: 07/10/2025 undefined under Section 148A(d) of the Act and notice issued under Section 148 of the Act are also impugned in the present writ petition. Being aggrieved, the petitioner has preferred this petition.
6. Learned advocate Mr. Bandish Soparkar for the petitioner submitted that the respondent no. 1 has failed to give reasonable opportunity of being heard to the petitioner before passing the impugned order under Section 148A(d) of the Act. Moreover, the notice dated 23.03.2024 provided the petitioner only six days' time to respond which is in violation of the mandatory seven days statutory period as prescribed under Section 148A(b) of the Act. Therefore, the denial of the statutory minimum time period renders the proceedings void ab initio and violates the right of the petitioner.
6.1. Learned advocate Mr. Bandish Soparkar further submitted that there are other issues distinct with regard to the alleged financial transaction, however, prima facie issue which needs to be interfered is with regard to the violation of mandatory period of giving response.
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7. Per contra, learned Senior Standing Counsel Mr. Varun K. Patel for the respondent contended that the transaction carried out by the assessee for the year under consideration has remained unexplained and therefore the same is required to be taxed. Insofar as the issue of violation of principles of natural justice is concerned, learned Senior Standing Counsel Mr. Varun Patel has contended that notice under Section 148A(b) of the Act was issued on 23.03.2024 along with all the information available and the same was duly served through ITBA portal. 7.1. It is further contended that the petitioner had neither responded nor filed any written reply even after lapse of more than 7 days to substantiate that the transaction was genuine and the same was incorporated in the books of accounts and also offered to tax. It is therefore, submitted that the transaction and the income derived therefrom during the year under consideration had remained unexplained and on the basis of the material available on record, transaction of Rs.12752 crores has escaped assessment for the Assessment Year 2020-21. It was, therefore, submitted that the notice issued under Section 148 of Page 5 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Wed Oct 08 2025 Downloaded on : Thu Oct 09 00:32:26 IST 2025 NEUTRAL CITATION C/SCA/7187/2024 JUDGMENT DATED: 07/10/2025 undefined the Act is just and proper as the income chargeable to tax has escaped the assessment and requested to dismiss the petition and pass appropriate order.
8. Having heard the learned counsel for the respective parties and having gone through the material placed on record, the primary case of the petitioner is that notice under Section 148A(b) of the Act was issued on 23.03.2024 wherein the petitioner was directed to furnish reply by 29.03.2024 which time period is less than the time stipulated under Section 148A(b) of the Act. Section 148A(b) of the Act reads as under :-
Section 148A The Assessing Officer shall, before issuing any notice under Section 148 :-
(a) xxx xxx
(b) Provide an 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 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 suggest 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. Upon perusing the above provision, it is not in dispute that the petitioner was not given adequate time as required under Section 148A(b) of the Act, and was not heard before passing Page 6 of 8 Uploaded by PHALGUNI PATEL(HC00175) on Wed Oct 08 2025 Downloaded on : Thu Oct 09 00:32:26 IST 2025 NEUTRAL CITATION C/SCA/7187/2024 JUDGMENT DATED: 07/10/2025 undefined the impugned order. It is a fundamental proposition of law that the other side should be heard before any order is passed. The maxim of Audi Alteram Partem is broad enough to include the rule against bias since a fair hearing is must for it to be unbiased hearing. In the instant case, the fact is not in dispute that the petitioner was not given appropriate time to respond to the notice issued under Section 148A(b) of the Act and the impugned order was passed without hearing the petitioner.
10. In view of the same, the impugned order under Section 148A(d) of the Act dated 30.03.2024 passed by the respondent under as well as the notice of the same date issued under Section 148 of the Act are not tenable and the same are required to be quashed and set-aside.
11. Considering the facts of the case, the petition succeeds and is accordingly allowed. The impugned order and notice dated 30.03.2024 are hereby quashed and set aside and the matter is remanded to the respondent to comply with the provisions of Section 148A(b) of the Act and pass a fresh order after following due procedure of law.
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12. Such exercise shall be completed within twelve (12) weeks from the date of receipt of copy of this order.
13. Rule is made absolute to the aforesaid extent with no order as to costs.
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