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

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                             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

                        ==========================================================
                                               ASHIT HARIBHAI VORA
                                                      Versus
                               OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX
                                          CENTRAL CIRCLE 1(2) AHMEDABAD
                        ==========================================================
                        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
                        ==========================================================

                          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-

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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

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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-

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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

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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

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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

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