Gujarat High Court

Atul Mahavirprasad Paldecha vs Income Tax Officer, Ward 2(3)(6), Surat on 7 October, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                NEUTRAL CITATION




                             C/SCA/8236/2025                                   JUDGMENT DATED: 07/10/2025

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                                      IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                       R/SPECIAL CIVIL APPLICATION NO. 8236 of 2025


                       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
                                                                             ✔
                       ==================================================
                                          ATUL MAHAVIRPRASAD PALDECHA
                                                        Versus
                                   INCOME TAX OFFICER, WARD 2(3)(6), SURAT & ANR.
                       ==================================================
                       Appearance:
                       MR DHINAL A SHAH(12077) for the Petitioner(s) No. 1
                       KARAN G SANGHANI(7945) for the Respondent(s) No. 1
                       MR.VARUN K.PATEL(3802) for the Respondent(s) No. 2
                       NOTICE SERVED for the Respondent(s) No. 1
                       ==================================================

                            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 respondents.

2. Rule returnable forthwith. Learned Senior Standing

Counsel Mr. Karan Sanghani waives service of notice of rule on

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behalf of the respondents.

3. Having regard to the controversy 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 226/227 of the Constitution

of India, the petitioner has prayed for quashing and setting

aside the impugned order passed by the respondent no. 1 under

Section 148A(d) of the Income Tax Act, 1961 (For Short "the

Act") dated 31.08.2024 as well as the notice dated 31.08.2024

under Section 148 of the Act for the Assessment Year 2018-19.

5. The brief facts of the case are as under :-

5.1. The petitioner is a proprietor and is inter alia engaged in

the business of trading in Diamonds. The petitioner filed its

return of income under Section 139(1) of the Act on 29.09.2018

declaring the total income of Rs.1,28,74,840/-.

5.2. During the course of assessment proceedings and in

response to the notice issued under Section 142(1) of the Act,

details of purchases and sales were submitted by the petitioner.

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Thereafter the assessment process was completed and order

under Section 143(3) of the Act came to be passed on

20.04.2021 whereby the total income of the petitioner was

determined at Rs.1,82,27,809/- after making additions of

Rs.53,52,969/- under Section 56(2)(x)(b)(B) of the Act.

5.3. Subsequent to the completion of the assessment

proceedings, certain information was uploaded on the Insight

portal alleging escapement of the income to the tune of

Rs.1,48,05,575/- on account of bogus purchases made by the

petitioner from one M/s. Tanman Jewels Pvt. Ltd. On the basis of

the said information, the case of the petitioner was reopened

and notice under Section 148A(b) of the Act was issued on

12.08.2024 alleging that the petitioner had entered into bogus

purchase transactions. In response to the said notice, the

petitioner submitted a detailed reply on 20.08.2024 denying the

allegations.

5.4. Thereafter, the petitioner was again issued with notice

dated 24.08.2024 under Section 148A(b) of the Act alleging

bogus sales transactions with same party i.e. M/s. Tanman

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Jewels Pvt. Ltd. amounting to R.1,48,05,575/- and thereby

directed to furnish reply by 28.08.2024. It is the case of the

petitioner that the respondent allowed only four days' time to

respond to the notice, which is contrary to the minimum

required statutory period of seven days as mandated under

Section 148A(b) of the Act.

5.5. It is further the case of the petitioner that due to

insufficient time provided, the petitioner was unable to file

reply and adequately rebut the fresh allegations made in the

second notice dated 24.08.2024. It is the case of the petitioner

that on the basis of the aforesaid two notices, the respondent

under Section 148A(d) of the Act passed an order dated

31.08.2024 alleging bogus sales of Rs.3,32,82,818/- and on the

same date i.e. 31.08.2024, the respondent no. 1 issued notice

under Section 148 of the Act seeking to reopen the assessment

for the Assessment Year 2018-19. Therefore, the order dated

31.08.2024 passed under Section 148A(d) of the Act and notice

under Section 148 of the Act are impugned in the present writ

petition.

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6. Learned advocate Mr. Dhinal Shah 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 24.08.2024 provided the petitioner

only four days 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. Dhinal Shah further submitted that

there are other issues distinct with regard to the allegation of

bogus sales, however, prima facie issue which needs to be

interfered is violation of the mandatory period of giving

response.

7. Per contra, learned Senior Standing Counsel Mr. Karan

Sanghani for the respondent could not controvert the

submissions made by learned advocate Mr. Dhinal Shah and

relied upon the affidavit-in-reply filed on behalf of the

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respondent on the following averments :-

"4. At the outset, I most respectfully submit that the petitioner has challenged the impugned notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for A.Y 2018-19 as well as the order dated 31.08.2024 passed under section 148A(d) of the Act submit that this petition is premature and there is an alternative efficacious remedy available under the law. The assessment pursuant to impugned notice is yet to be framed. In other words, the petitioner if aggrieved by the assessment order yet to be framed can file an appeal before the CIT (Appeals) and thereafter to the Appellate Tribunal. It is a settled law that the person aggrieved cannot abandon the statutory mechanism stipulated under the Act. Reliance is placed on the decision of the Hon'ble Supreme Court in the case of Chhabildas Agrawal, (357 ITR 357) Hence, on this limited ground, the challenge to the impugned notice may kindly be rejected.

5. The petitioner has contended that only 4 days time in granted to respond to Section 148A(b) notice as against the Ray 108andatory period of seven days prescribed in the statute.

In this regard, I humbly submit that notice u/s 148A(b) was issued on 12.08.2024 calling upon the petitioner to respond on or before 20.08.2024, therefore, minimum seven days were granted to the petitioner. The petitioner vide letter dated 20.08.2024 duly responded to such notice.

6. Subsequently, another notice u/s 148A(b) of the Act was issued on 24.08.2024 calling upon the petitioner to respond on or before 28.08.2024. The petitioner neither responded to such notice nor filed any adjournment. Consequently, the respondent passed an order u/s 148A(d) on 31.08.2024 and issued notice dated 31.08.2024 u/s 148 of the Act."

7.1. Referring to the above averments, it was submitted that

impugned notice issued under Section 148 of the Act is legal

and therefore requested to dismiss the petition and pass

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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 issued under

Section 148A(b) of the Act was issued on 24.08.2024 wherein

the petitioner was directed to furnish reply by 28.08.2024 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