Gujarat High Court
Hasmukh Nanalal Parekh vs Union Of India on 7 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/10839/2023 JUDGMENT DATED: 07/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10839 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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HASMUKH NANALAL PAREKH
Versus
UNION OF INDIA & ANR.
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Appearance:
MR. ANSHUL JAIN, ADV. FOR MR LOVE R SHARMA(11959) for the
Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 2
NOTICE UNSERVED 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. Anshul
Jain for learned advocate Mr. Love
Sharma for the petitioner and learned
Senior Standing Counsel Mr. Varun Patel
for the respondent.
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2. Rule returnable forthwith. Learned
Senior Standing Counsel Mr. Varun Patel
waives service of notice of rule for and
on behalf of the respondent.
3. Having regard to the controversy
arising in this petition which is in a
narrow compass, with the consent of the
learned advocates for the parties, the
same is taken up for hearing.
of the Constitution of India, the
petitioner has challenged and prayed for
quashing and setting aside the impugned
demand notice dated 31.3.2023 issued by
the respondent No.2 (hereinafter
referred to as 'the respondent' for
short) under Section 156 of the Income
Tax Act, 1961 (hereinafter referred to
as 'the Act' for short) as well as
impugned order dated 31.3.2023 issued
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of the Act as well as show-cause notice
dated 16.3.2023 issued under Section
148A(b) of the Act and initiation of
reassessment proceedings as well as
Order dated 26.3.2022 under section
148A(d) of the Act and Notice dated
26.3.2022 under Section 148 of the Act.
5. Brief facts of the case are that the
petitioner is an individual having PAN
No. ATVPP8080F and is a non-resident
Indian having permanent residence at
Dubai, UAE. The petitioner is having
income in India in form of NRE Bank
Deposits in HDFC Bank having Account No.
03211060004162 and Standard Chartered
Bank having Account No. 2261002979,
which is invested through foreign
exchange remittance. It is the case of
the petitioner that he is having no
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other income in India except interest
from NRE Bank Deposits and therefore
has exempted income under Section 10(15)
of the Act. It is the case of the
petitioner that the respondent alleged
that the petitioner has not filed return
of income for A.Y 2018-19. The same was
flagged as per Risk Management Strategy.
It was alleged by the respondent that
the petitioner did not disclose certain
transactions for the A.Y.2018-19.
Therefore, when the petitioner had not
filed return of income, it was alleged
that the disputed transactions were
allegedly not disclosed by the
petitioner. In view of the same, a show-
cause notice dated 16.3.2022 was issued
to the petitioner as per the provisions
of Section 148A(b) of the Act,
requesting to show cause to as why
notice under Section 148 of the Act
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should not be issued against the
petitioner. Subsequent to the notice
issued by the respondent, an order under
Section 148A(d) of the Act was passed on
26.3.2022 declaring the petitioner's
case a fit case for assessment and
further declaring that an amount to the
tune of Rs.3,05,18,951/- has allegedly
escaped income for A.Y. 2018-19.
5.1 It is the case of the petitioner
that after the case being dormant for
several months, suddenly in the year
2023, in pursuance of notice dated
26.3.2022 issued under Section 148A(d)
of the Act read with Section 148 of the
Act, a notice dated 1.2.2023 was issued
under Section 142(1) of the said Act
which, inter alia, demonstrate the
details of the return of income filed
for the A.Y. 2018-19. The petitioner was
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also requested to submit the documents
along with a brief note describing the
disputed activities undertaken by the
petitioner. The petitioner submitted
details on 10.2.2023. Subsequently,
another notice under Section 142(1) of
the Act was issued on 10.3.2023
requiring further details of the return
of income filed for the A.Y. 2018-19.
The petitioner responded to the
respondent on 15.3.2023. Thereafter, the
department issued show cause notice
dated 22.3.2023, making observation that
the responses of the petitioner has not
explained the source of income and
further requiring the petitioner to show
cause as to why Rs.3,05,18,951/- should
not be added to the income of the
petitioner and the show cause notice
stated that a personal hearing was
subjected to be held on 25.3.2023.
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However, according to the petitioner
25.3.2023 was a Saturday and Holiday for
the respondent. In response to the show-
cause notice dated 22.3.2023, the
petitioner communicated to the
respondent on 24.3.2023 requesting to
grant 15 days' adjournment to file
reply. On the very next day i.e. on
23.3.2023, the respondent again issued a
show-cause notice under Section 142(1)
of the Act requesting the petitioner to
days by 25.3.2023 for the A.Y. 2018-19.
In response to the notice dated
23.3.2023, the petitioner gave response
on 24.3.2023, requesting the respondent
to grant an adjournment of 15 days,
however, without granting opportunity of
personal hearing, respondent passed the
impugned assessment order on 31.3.2023
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of the Act and held that an amount of
Rs.3,05,18,951/- was to be made as an
addition to the petitioner's income and
further on the very same day i.e.
31.3.2023, the impugned demand notice
under Section 156 was issued demanding
total payable income tax on the
reassessed income including interest
along with penalty proceedings initiated
under Section 271AAC, Section 271F and
Section 272A of the Act.
5.2 It is being aggrieved and
dissatisfied by the impugned order and
demand notice dated 31.3.2023, issued by
the respondent No.2 being exparte order,
which have been issued in gross
violation of principles of natural
justice, the present writ petition is
preferred.
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6. Learned advocate Mr. Ansul Jain for
the petitioner submitted that the
read with Section 144 of the Act has
been issued in complete violation of the
procedure laid down in the provisions
and without providing any opportunity of
hearing to the petitioner. This fact in
itself vitiates the impugned proceedings
against the petitioner. It was further
submitted that the respondent fixed the
date of personal hearing on 25.3.2023
i.e. merely within 3 days of the
issuance of notice on 22.3.2023. The
respondent has not even acknowledged
the request made by the petitioner on
24.3.2023 seeking time for submission
and the impugned order was passed in
complete haste on 31.3.2023, without
following the principles of natural
justice.
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7. Per contra, learned Senior Standing
Counsel Mr. Varun Patel for the
respondent was not able to controvert
the submissions made by the petitioner.
On the basis of the affidavit-in-reply
filed by the respondent, it was
submitted by Mr. Patel that the show-
cause notice dated 22.3.2023 was issued
and the hearing was fixed on 25.3.2023.
Demand made by the petitioner seeking an
adjournment of 15 days was not possible
for the Assessing Officer as the
assessment proceedings were getting time
barred. It was submitted that during the
course of assessment proceedings, the
petitioner was given adequate
opportunity of being heard and
therefore, it is denied that impugned
assessment order is passed in violation
of principles of natural justice.
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8. Having heard the learned advocates
for the respective parties and perused
the material on record, certain facts
are not in dispute. It is not in dispute
that the notice under Section 142(1) of
the Act was issued on 22.3.2023. It is
also not in dispute that the petitioner
had requested for personal hearing.
However, without granting opportunity of
personal hearing, the order under
Section 147 read with Section 144 of the
Act was passed on 31.3.2023. It is a
fundamental proposition of law that
other side should be heard before any
order is passed. The maxim audi alteram
partem is broad enough to include the
rule against bias since a fair hearing
is must for an unbiased hearing. In the
instant case, it is not in dispute that
the hearing was not granted to the
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petitioner despite request being made.
In view of the same, the impugned
assessment order passed by the
respondent in case of the petitioner
dated 31.3.2023 under Section 147 read
with Section 144B of the Act for the
A.Y. 2018-19 is not tenable and is
required to be quashed and set aside and
is accordingly quashed and set-aside. In
view of the same, the notice under
Section 156 of the Act dated 31.3.2023
is also quashed and set-aside. The
petition is allowed. Rule is made
absolute. No order as to costs.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE
