Gujarat High Court

Bipinbhai Maneklal Shah vs Income Tax Officer Ward 2(1)(2) on 7 October, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                NEUTRAL CITATION




                             C/SCA/7187/2024                                   JUDGMENT DATED: 07/10/2025

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                                      IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                       R/SPECIAL CIVIL APPLICATION NO. 7187 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              No Yes
                                                                          ✔
                       ==================================================
                                           BIPINBHAI MANEKLAL SHAH
                                                         Versus
                                        INCOME TAX OFFICER WARD 2(1)(2)
                       ==================================================
                       Appearance:
                       MR B S SOPARKAR(6851) 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 PRANAV TRIVEDI

                       Date : 07/10/2025

                       ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

1. Heard learned advocate Mr. B.S. Soparkar for the

petitioner and learned Senior Standing Counsel Mr. Varun K.

Patel for the respondent.

2. Rule returnable forthwith. Learned Senior Standing

Counsel Mr. Varun K. Patel waives service of notice of rule on

behalf of the respondent.

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3. Having regard to the controversy involved which is 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 of the Constitution of

India, the petitioner has prayed to quash and set aside the

impugned notice issued under Section 148A(b) of the Income

Tax Act, 1961 (For Short "the Act") dated 23.03.2024 as well as

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

30.03.2024 as also the notice issued under Section 148 of the

Act dated 30.03.2024 for Assessment Year 2020-21.

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

5.1. The petitioner has filed its return of income under Section

139 (1) of the Act for the Assessment Year 2020-21 declaring

total income of Rs.17,46,410/-. The return of income was filed

along with computation of income as well as Tax Audit Report in

Form 3CB, audited Balance Sheet and Profit and Loss Account.

5.2. It is the case of the petitioner that subsequent to filing of

income tax return, the respondent issued notice under Section

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148A(b) on 23.03.2024 on the basis of the information that the

petitioner has made financial transactions of more than

Rs.12752 crores and has not filed the return of income. It is

further the case of the petitioner that time till 29.03.2024 was

given to respond to the said notice.

5.3. It was submitted by the petitioner that he was not

informed about the issuance of the notice by way of SMS on

phone or through E-mail. It was further submitted that due to

insufficient time provided as well as in absence of any

information about the issuance of notice dated 23.03.2024, the

petitioner was unable to file reply and adequately rebut the

fresh allegation impugned in the notice dated 23.03.2024.

Thereafter the respondent passed the impugned order under

Section 148A(d) of the Act 30.03.2024 alleging unexplained

transaction to the tune of Rs.12752 crores and on the same date

i.e. on 30.03.2024 also issued notice under Section 148 of the

Act seeking to reopen the assessment for the Assessment Year

2020-21.

5.4. In view of such facts, the order dated 30.03.2024 passed

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

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

petition. Being aggrieved, the petitioner has preferred this

petition.

6. Learned advocate Mr. Bandish Soparkar 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 23.03.2024 provided the petitioner

only six days' time 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. Bandish Soparkar further submitted

that there are other issues distinct with regard to the alleged

financial transaction, however, prima facie issue which needs

to be interfered is with regard to the violation of mandatory

period of giving response.

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7. Per contra, learned Senior Standing Counsel Mr. Varun K.

Patel for the respondent contended that the transaction carried

out by the assessee for the year under consideration has

remained unexplained and therefore the same is required to be

taxed. Insofar as the issue of violation of principles of natural

justice is concerned, learned Senior Standing Counsel Mr.

Varun Patel has contended that notice under Section 148A(b) of

the Act was issued on 23.03.2024 along with all the information

available and the same was duly served through ITBA portal.

7.1. It is further contended that the petitioner had neither

responded nor filed any written reply even after lapse of more

than 7 days to substantiate that the transaction was genuine

and the same was incorporated in the books of accounts and

also offered to tax. It is therefore, submitted that the transaction

and the income derived therefrom during the year under

consideration had remained unexplained and on the basis of the

material available on record, transaction of Rs.12752 crores has

escaped assessment for the Assessment Year 2020-21. It was,

therefore, submitted that the notice issued under Section 148 of

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the Act is just and proper as the income chargeable to tax has

escaped the assessment and requested to dismiss the petition

and pass 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 under Section

148A(b) of the Act was issued on 23.03.2024 wherein the

petitioner was directed to furnish reply by 29.03.2024 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 (a);"

9. Upon perusing the above provision, it is not in dispute that

the petitioner was not given adequate time as required under

Section 148A(b) of the Act, and was not heard before passing

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the impugned order. It is a fundamental proposition of law that

the other side should be heard before any order is passed. The

maxim of Audi Alteram Partem is broad enough to include the

rule against bias since a fair hearing is must for it to be

unbiased hearing. In the instant case, the fact is not in dispute

that the petitioner was not given appropriate time to respond to