Gujarat High Court
Utpala Pradeep Jain Heir Of Pradeep ... vs Assistant Commissioner Of Income Tax on 7 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8810 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 Yes No
✔
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UTPALA PRADEEP JAIN HEIR OF PRADEEP ROSHANLA JAIN
Versus
ASSISTANT COMMISSIONER OF INCOME TAX
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Appearance:
MR DHINAL A SHAH(12077) for the Petitioner(s) No. 1
KARAN G SANGHANI(7945) 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. Dhinal Shah for
the petitioner and learned Senior Standing
Counsel Mr. Karan Sanghani for the respondent.
2. Rule returnable forthwith. Learned Senior
Standing Counsel Mr. Karan Sanghani waives
service of notice of rule for and on behalf of
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the respondent.
3. Considering the controversy arising in
this petition in narrow compass, with the
consent of learned advocates appearing for
respective parties, the petition is taken up
for final hearing today.
4. By this petition under Article 226 of the
Constitution of India, the petitioner has
challenged the notice dated 12.4.2024 issued
under Section 148 of the Income Tax Act, 1961
(for short 'the Act') for A.Y. 2016-17 as well
as order dated 12.4.2024 passed by the
respondent under Section 148A(d) of the Act
for the A.Y. 2016-17.
5. Brief facts of the petition are as
follows:
5.1 The assessee being late Pradeep Roshanlal
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Jain filed his Income Tax Return for the
Assessment Year 2016-17 on 13.10.2016,
however, Shri Pradeep Roshanlal Jain passed
away on 30.09.2020. Therefore, the present
petitioner being legal heir of the assessee
Pradeep Roshanlal Jain has subsequently
preferred the legal proceedings. The assessee
Pradeep Roshanlal Jain filed the Income Tax
Return for the A.Y. 2016-17 declaring total
income of Rs.17,59,890/-. The return of income
was filed along with copy of the computation,
audit report for the Financial Year 2015-16.
It is the case of the petitioner that in the
audit report, the sales shown was to the tune
of Rs.7,99,74,316.68 which, inter alia,
included the alleged amount of escaped income.
The case of the assessee was reopened under
Section 148(d) of the Act and notice under
Section 148 of the Act was issued by the
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respondent.
6. Being aggrieved by the notice issued under
Section 148 of the Act, the petitioner
preferred a writ petition before this Court
being SCA No. 18788 of 2022. It was alleged
that the notice under the provisions of the
Act was issued to the deceased assessee, which
was not tenable. This Court by way of order
dated 31.7.2023 allowed the writ petition.
Subsequently, a fresh notice under Section 148
of the Act was issued to the petitioner
invoking the provisions of Section 159 read
with Section 149(1) of the Act, on 28.2.2024.
It is the case of the petitioner that a notice
dated 13.3.2024 was received from the
respondent under Section 148A(b) of the Act
wherein respondent authority had directed the
petitioner to show cause and justify the
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source of cash deposits made during the year
along with documentary evidence. It was
further communicated to provide cash-flow
statement for the year under consideration as
well as the copy of certain ledger Accounts.
7. It is the case of the petitioner that the
assessee being late Pradeep Roshanlal Jain,
was proprietor of Arihant Petroleum and was
engaged in trading of petroleum, diesel and
other petroleum products under the dealership
IOCL. The location of business of late Pradeep
R. Jain was in a remote place in Devgad Baria,
Dahod, etc., therefore, the majority entry of
transactions were carried out only in cash
only. Therefore, the aggregated turnover was
to the tune of Rs.729.63 lakh and the cash
deposited was to the tune of Rs.652.32 lakh,
including the cash deposited during
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demonetization of Rs.117.03 lakh. In wake of
such facts, the petitioner submitted a
detailed reply on 20.3.2024. However, the
respondent authority, in complete disregard to
the submissions made by the petitioner, passed
an order under Section 148A(d) of the Act and
issued notice under Section 148 of the Act,
which is impugned in the present writ
petition.
8. Learned advocate Mr. Dhinal Shah for the
petitioner raised the following submissions:
8.1 Learned advocate Mr. Shah for the
petitioner submitted that Section 151A of the
Act gives the power to the Central Board of
Direct Taxes to notify scheme for the purpose
of assessment, reassessment or recomputation
under Section 147 or issuance of notice under
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Section 148 or conducting of enquiry or
issuance of notice under Section 148 or
conducting of enquiry or issuance of show
cause notice or passing of order under Section
148A or sanction for issuance of notice under
Section 151, so as to impart greater
efficiency, transparency and accountability
between the income tax authorities and
assessee;
8.2 That in exercise of the powers conferred
under the above-mentioned Section, CBDT issued
a notification dated 29.03.2022 which provided
for the assessment, reassessment or
recomputation under Section 147 of the Act.
The notification categorically states that the
issuance of notice under Section 148 of the
Act, shall be through automated allocation, in
accordance with risk management strategy
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formulated by the Board as referred to in
Section 148 of the Act for issuance of notice
and in a faceless manner, to the extent
provided in Section 1448 of the Act with
reference to making assessment or reassessment
of total income or loss of assessee;
8.3 That the respondent Authority has
admittedly reopened the case upon directions
received by him from Pr. Commissioner of
Income Tax, Vadodra as mentioned in the letter
dated 28.02.2024, without forming his own
independent opinion first, and then seek
approval, which is completely against the
provisions of Section 148 of the Act. Mr. Shah
has relied upon the decision of the Hon'ble
Apex Court in the case of Commissioner of
Income Tax-Shimla vs. The Greenworld
Corporation (2009) 7 SCC 69, wherein it was
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held that any order passed by the Assessing
Officer on the dictates of the higher
authorities which is illegal and being without
any jurisdiction, is a nullity.
9. Per contra, learned Senior Standing
Counsel Mr. Karan Sanghani for the respondent
submitted that the final decision was based on
reasoned analysis of the facts and legal
provisions. Section 148A(d) of the Act
mandates the Assessing Officer to review the
materials and objections before passing of an
order. This was done in the present case. It
was submitted that cash deposited in the bank
is not accounted for and is not supported by
any available facts and record. As per Section
147 of the Act, the Assessing Officer has
reason to believe that if any income has
escaped assessment, they are empowered to
initiate proceedings under Section 148 of the
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Act for the purpose of reassessment. The mere
fact that cash deposits have been made in the
bank does not automatically mean that these
deposits are lawful or represent income that
has been properly disclosed. In wake of such
submissions, Mr. Sanghani has submitted to
dismiss the present writ petition preferred by
the petitioner.
10. Having heard learned advocates for the
respective parties and considering the facts
of the case, it is not in dispute that the
petitioner has disclosed in the return of
income for A.Y. 2017-18 that there was cash
deposits to the tune of Rs.652.32 lakh
including cash to the tune of Rs.117.03 lakh
deposited during demonetization period.
Moreover, the petitioner has explained the
objection replied with regard to cash deposits
made. The assessee has explained that the
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business being in rural area of Gujarat and
also with regard to petroleum products, the
end-users used to make cash deposit instead of
any UPI payment. Thus, the petitioner has
explained the cash deposit in bank account
during the Assessment Year as well as during
the demonetization period. The Assessing
Officer, however, has discarded such
explanation by only observing that the
petitioner has failed to submit supporting and
corroborative evidence providing direct nexus
of cash deposit during the demonetization
period from the amount of cash received from
the consumer. Thus, reasons assigned by the
Assessing Officer in the order disclosing the
objection is contrary to the facts on record
as the petitioner has explained in detail of
the cash deposits in the Bank Account during
the year under consideration. It also appears
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from the record that the petitioner along with
the objection has submitted requisite details,
copies of bank statement, audited balance-
sheet, etc., which is not referred by the
Assessing Officer while disposing the
objection. Moreover, this issue is squarely
covered by decision of this Court in case of
Narsimha Trading Co. v. Income Rax Officer, in
SCA No. 17833 of 2021, wherein by judgment
dated 2.12.2024 in para Nos. 11,12 and 13 it
is observed as under:
"11. It appears that the Assessing Officer
has formed reasonable belief that income
chargeable to tax has escaped assessment only
on the basis of the information available
with him regarding the failure on the part of
the petitioner-assessee of known source for
the cash deposited ignoring that the
petitioner has categorically stated in the
reply that the cash deposited is out of the
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sales which is duly reflected in the books of
account.
12. In such circumstances, in absence of any
independent application of mind by the
respondent- Assessing Officer and in absence
of any live link between the information
received and the material available record,
the impugned notice cannot be sustained.
Merely because the Assessing Officer wishes
to verify veracity of cash deposit cannot be
the basis for reopening for making roving and
fishing inquiry by reassessment even in case
where the return was not scrutinized before
acceptance originally. Therefore, respondent
assessing officer could not have assumed
jurisdiction to issue the impugned notice for
reopening.
13. Reliance placed by the learned advocate
for the respondent on the aforesaid decisions
would not be applicable in the facts of the
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case because the respondent assessing officer
has failed to assume jurisdiction in absence
of any tangible material to arrive at prima-
facie reason to believe that income has
escaped assessment.
11. In view of the foregoing reasons, the
petition succeeds. Consequently, the impugned
notice dated 12.4.2024 issued under Section
148 of the Act for A.Y. 2017-18 as well as
order dated 12.4.2024 passed by the respondent
under Section 148A(d) of the Act for the A.Y.
2017-18 are accordingly, quashed and set-
aside. Rule is made absolute to the aforesaid
extent. No order as to costs.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE
