Gujarat High Court
Ashokkumar Premchandbhai Patel vs Deputy Commissioner Of Income Tax, ... on 20 June, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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C/SCA/6462/2022 CAV JUDGMENT DATED: 20/06/2025
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Reserved On : 01/04/2025
Pronounced On : 20/06/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6462 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 6463 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 14513 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 14489 of 2023
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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ASHOKKUMAR PREMCHANDBHAI PATEL
Versus
DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1) & ANR.
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Appearance:
UMAIDSINGH BHATI(7973) for the Petitioner(s) No. 1
M R BHATT & CO.(5953) for the Respondent(s) No. 2
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
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
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1. Heard learned advocate Mr. Umaid Singh
Bhati for the petitioners and learned
Senior Standing Counsel Mr. Varun K. Patel
for the respondents.
2. Having regard to the controversy
involved in these petitions, with the
consent of learned advocate for the
respective parties, the matters are heard
together and are being disposed off by
this common judgment.
3. Rule returnable forthwith. Learned
Senior Standing Counsel Mr. Varun K. Patel
waives service of notice of rule on behalf
of the respondents in the respective
petitions.
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4. Special Civil Application No.6462/2022
and Special Civil Application No.6463/2022
are filed in case of Ashokkumar
Premchandbhai Patel challenging notice
under section 148 of the Income Tax
Act,1961 (for short 'the Act') dated
29.03.2021 for Assessment Year 2013-2014
and notice under section 148 of the Act
dated 30.03.2021 for Assessment Year 2014-
2015 respectively along with assessment
order passed under section 147 read with
section 144B of the Act dated 30.03.2022.
5. This Court passed the order issuing
notice on 30.03.2022 and has also granted
ad interim order in terms of para 11(C)
of the petition restraining the respondent
Assessing Officer on further proceedings
in pursuance of notice under section 148
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of the Act.
6. Special Civil Application
No.14513/2023 and Special Civil
Application No. 14489/2023 are in case of
Pravinkumar Premchandbhai Patel, brother
of the petitioner in the aforesaid two
cases wherein notice under section 148 of
the Act dated 30.03.2021 for Assessment
Years 2013-2014 and 2014-2015 respectively
are challenged. So far as these two
petitions are concerned, it is second
round of litigation as earlier the
petitioner had challenged the same notices
by preferring Special Civil Application
No. 4007 of 2022 and Special Civil
Application No. 3462 of 2022 which were
allowed by remanding the matter to the
Assessing Officer to pass detailed order
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giving reasons for disposing off the
objections filed by the petitioner
objecting to issuance of notice under
section 148 of the Act for both the
assessment years. Thereafter the Assessing
Officer passed the speaking order
disposing off the objections on 11.07.2023
rejecting the objections of the petitioner
for reopening. The petitioner has
therefore, again preferred these two
petitions challenging the notice for
reopening dated 30.03.2021 and the order
disposing off the objection dated
11.07.2023 for Assessment Years 2013-2014
and 2014-2015.
7. The petitioners derive income from
salary from their family concern M/s.
Patel D.J. Tobacco Products Private
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Limited since 2006 and also earns interest
from loans and advances, investments and
deposits with the bank.
8. The petitioners filed their return of
income for both the Assessment Years which
have been processed under section 143(1)
of the Act.
9. The petitioners filed revised return
of income on 30.11.2015 declaring capital
gain on the sale of agricultural land
which was an exempt income.
10. The petitioners thereafter received
the impugned notice under section 148 of
the Act dated 30.03.2021 for both the
assessment years. The petitioners filed
return of income pursuant to the notice
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under section 148 of the Act declaring the
same income which was offered to tax
earlier. The respondent Assessing Officer
thereafter uploaded the notice under
section 143(2) of the Act for the month of
September, 2021 containing the extract of
reasons without disclosing the date of
recording of the reasons alleging that the
petitioners have entered into bogus sub
contract with Sadbhav Engineering Ltd.
and investment made by the petitioners did
not match with income profile nor such
investment is reflected in the books of
accounts of the petitioners and as
complete set of reasons was not provided
to the petitioners, the petitioners made
request to the Assessing Officer to
provide the same. However, the petitioners
in absence of the reasons recorded
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uploaded the objections which were
disposed off by the Assessing Officer
without considering the same and notice
under section 142(1) of the Act was issued
calling upon the petitioners to provide
details in connection with transfer of
capital assets.
11. In Special Civil Application No. 6462
of 2022 and Special Civil Application No.
6463 of 2022 in case of Ashokkumar
Premchandbhai Patel, no order was passed
disposing off the objections raised by the
petitioners and show cause notice-cum-
draft assessment order was uploaded on
28.03.2022 after filing of the petitions
by the petitioner and on 30.03.2022 this
Court issued the notice and granted
interim stay. However, the assessment
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orders are also passed by the respondents
on the same day i.e. 30.03.2022 therefore,
the petitions were amended to challenge
the assessment orders.
12. So far as Special Civil Application
No. 14513 of 2023 and Special Civil
Application No.14489 of 2023 are
concerned, in the earlier round of
litigation after considering the
submissions made by both the sides, this
Court vide order dated 29.08.2022 remanded
the matter back to the Assessing Officer
to pass a detailed order giving reasons
for disposing off the objections filed by
the petitioners. Accordingly, the order
dated 11.07.2023 was passed rejecting the
objections raised by the petitioners.
13. Learned advocate Mr.Umaid Singh Bhati
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for the petitioners at the outset
submitted that similar notice was issued
in case of other brother namely,
Gunvantbhai Premchandbhai Patel on the
same reasons for reopening for the same
period i.e. 2013-2014 and 2014-2015 and
after considering the reply filed by the
assessee in respect of the land sold by
the assessee along with the petitioners
who were co-owners, accepted the return of
income filed accepting the reply submitted
by the said assessee.
14. It was submitted that the agricultural
land situated at Village Sabalpur, Taluka
Viramgam, District Ahemdabad was sold by
the co-owners namely, Pravinkumar
Premchandbhai Patel, Ashokkumar
Premchandbhai Patel, Roger K. Patel,
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Gunvant P. Patel and Pritambhai Rameshbhai
Patel in the year under consideration as
such land was purchased during the
financial year 1998-1999 by making
proportionate payment at the relevant
time. It was submitted that the
petitioners have been showing agricultural
income in the return of income till
Assessment Year 2012-2013 and investments
made by the petitioners was also shown in
balance sheet and during the financial
year 2013-2014, relevant to Assessment
Year 2014-2015, the petitioners along with
aforesaid co-owners had sold the four land
parcels by executing the conveyance deed.
It was submitted that respondent no.1 on
the basis of information regarding sale of
land parcel and alleged payment of on
money in connection with transfer of the
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same, has issued the impugned notice for
reopening by working out quantum of on-
money attributable to the petitioner on
the basis of the imaginary percentage,
more particularly, when agricultural land
situated near Village Sabalpur, Taluka
Viramgam, do not fall within the meaning
of "capital asset" under section 2(14)
(iii) of the Act and the petitioners have
claimed exemption from capital gain on
transfer of their shares in the four
parcels of land in revised return of
income uploaded on 30.11.2025 and
therefore, there is no escapement of
income as alleged by the respondent
Assessing Officer.
15. It was submitted that the information
relied upon by the Assessing Officer was
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vague and not specific as to particular
assessment year and the respondent
Assessing Officer has issued the notice
without having any tangible information.
It was also submitted that the petitioners
have raised objection that information was
based on dumb documents impounded/seized
from Shri Pritamkumar Rameshbhai Patel and
not supported by any tangible material or
statement of the person searched/surveyed.
However, such objection is not at all
replied or considered in the order
disposing off the objections. It was
therefore, submitted that it is settled
position of law that reasons are required
to be read as they were recorded by the
Assessing Officer without any addition,
substitution or deletion and such reasons
should be clear and unambiguous and should
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not suffer from any vagueness.
16. Learned advocate Mr. Bhati in support
of his submission relied upon the decision
of Hon'ble Supreme Court in case of
Commissioner of Income Tax v. Kelvinator
of India Ltd reported in (2010) 320 ITR
561 (SC) and decision of this Court in
case of Sagar Enterprises v. Assistant
Commissioner of Income Tax reported in
(2002) 257 ITR 335 (Gujarat) to submit
that when the respondent Assessing Officer
himself is not sure as to the year of
taxability and whether the income has
escaped assessment for Assessment Year
2013-2014 or 2014-2015, notice for
reopening would be without jurisdiction.
17. On the other hand, learned Senior
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Standing Counsel Mr. Varun Patel appearing
for the respondents submitted that cases
of the petitioners are covered as per
Explanation 2(b) to section 147 as no
assessment has been made in case of the
petitioners and only intimation was issued
under section 143(1) of the Act and
thereafter search and seizure action under
section 132 was conducted at various
premises of Sadbhav Group concerns on
06.04.2017 and further survey action was
also conducted at the residential premises
of Shri Pritamkumar Rameshbhai Patel and
during such search/survey proceedings,
incriminating evidence against the
petitioners were found and seized. It was
submitted that information was uploaded on
Insight Portal by ACIT, Central Circle-
1(3), Ahmedabad for Assessment Years 2013-
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2014 and 2014-2015 and after considering
such information, the Assessing Officer
recorded in writing the reasons to believe
that income chargeable to tax has escaped
assessment after taking prior approval
from the competent authority under section
151 of the Act to issue impugned notice
for reopening. In support of his
submission, reliance was placed on the
decision of Hon'ble Apex Court in case of
Assistant Commissioner of Income Tax v.
Rajesh Jhaveri Stock Brokers P Ltd.
reported in (2007) 291 ITR 500 (SC). It
was therefore, submitted that the impugned
notice and orders are just, proper and
legal as due procedure has been followed
by the Assessing Officer.
18. It was further submitted that in case
of Pravinkumar Premchandbhai Patel
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pursuant to the remand made by this Court,
speaking order dated 11.07.2023 has been
passed rejecting the objections raised by
the petitioner giving detailed reasons and
in view of such order no interference is
required to be made by this Court by
exercising extraordinary jurisdiction
under Article 226 of the Constitution of
India.
19. Having heard the learned advocates for
the respective parties and considering the
facts of the case and material placed on
record, it appears that the impugned
notices for Assessment Years 2013-2014 and
2014-2015 are issued by the respondent
Assessing Officer for alleged bogus sub
contract with Sadbhav Engineering Ltd as
well as alleged on-money received on sale
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of agricultural lands by the petitioners.
However, there is no tangible material
available with the Assessing Officer and y
reliance was placed only on the
information reflected in the Insight
Portal without any other corroborative
material or live nexus with such
information made available on Insight
Portal reflected in the reasons recorded.
20. On perusal of the reasons recorded, it
appears that the Assessing Officer has
failed to disclose or provide any
incriminating material allegedly found
during the search/survey of residential
premises of Shri Pritamkumar Rameshbhai
Patel pertaining to the assessee
indicating that the petitioners have
understated the income or claimed
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excessive losses, deductions etc. Instead
the respondent has relied on
unsubstantiated information regarding
bogus contact worth either Rs. 21 crores
or Rs. 42 crores with Sadbhav Engineering
Ltd. with final amount remaining unclear
so far as Assessment Year 2014-2015 in
case of Pravinkumar Premchandbhai Patel.
21. With regard to transaction of sale of
agricultural land is concerned, the
respondents have accepted the reply filed
in case of Gunvantbhai Premchandbhai Patel
who is co-owner of such sale transaction
in the assessment order. Therefore, the
very basis of reopening of alleged receipt
of on-money by the petitioners on sale of
four parcels of agricultural land is not
in existence as no addition has been made
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in case of other co-owner which clearly
shows that there is absence of any
tangible material with the respondent
assessing officer at the time of recording
the reasons which is a mandatory
requirement for assumption of jurisdiction
for reopening for formation of reasonable
belief for escapement of income.
22. It is also pertinent to note that so
far as Special Civil Application
No.6462/2022 and Special Civil Application
No. 6463/2022 are concerned, the
assessment orders have been passed on the
same day i.e. 30.03.2022 when this Court
issued the notice and granted stay of
further proceedings. Therefore, assessment
orders are also challenged whereby
additions are made in absence of any reply
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filed by the petitioners in view of
challenge to the notice of reopening
before this Court. It is also pertinent to
note that the Assessing Officer has made
addition of Rs.3,84,06,582/- for alleged
on-money received without any basis.
23. Pursuant to order passed by this
Court, Respondent has also placed on
record relevant extract from the record
available online forming part of the
original record of the petitions and on
perusal of the same, it appears that the
Insight Portal only reveals that assessee
has entered into bogus sub-contract with
Sadbhav Engineering Ltd for Assessment
Years 2013-2014 and 2014-2015 for Rs. 21
crores in case of Pravinkumar
Premchandbhai Patel on the basis of seized
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material in case of Pritamkumar R. Patel
which has no nexus with the petitioner
Pravinkumar Premchandbhai Patel.
24. Similarly in case of Ashokkumar
Premchandbhai Patel information from
Insight Portal discloses cash sales of
immovable property by group of persons for
both the Assessment Years amounting to
Rs.21,22,24,726/- only on the basis of
documents impounded during the course of
search/survey in case of Pritamkumar
Rameshbhai Patel without any reference to
the petitioner. We have also perused the
documents available on record which also
do not refer to any tangible material
having live nexus with the alleged
escapement of income.
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25. In view of foregoing reasons, the
petitions succeed and are accordingly
allowed. Impugned notices dated 29.03.2021
and 30.03.2021 as well as assessment
orders dated 30.03.2022 which are
challenged in in Special Civil Application
No.6462/2022 and Special Civil Application
No. 6463/2022 in case of Ashokkumar
Premchandbhai Patel are hereby quashed and
set aside. Similarly notices dated
30.03.2021 and orders disposing off the
objections dated 11.07.2023 which are
challenged in Special Civil Application
No.14513/2023 and Special Civil
Application No.14489/2023 in case of
Pravinkumar Premchandbhai Patel are also
quashed and set aside. Rule is made
absolute to the aforesaid extent. No order
as to costs.
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26. Original files be returned to the
counsel for the respondent.
(BHARGAV D. KARIA, J)
(D.N.RAY,J)
RAGHUNATH R NAIR
