[Cites 12, Cited by 0]
Gujarat High Court
Bhavna Dinesh Bilgi vs The Office Of The Income Tax Officer Ward ... on 8 April, 2026
Author: A. S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/1293/2026 JUDGMENT DATED: 08/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO.1293 of 2026
With
R/SPECIAL CIVIL APPLICATION NO.2121 of 2026
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
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BHAVNA DINESH BILGI
Versus
THE OFFICE OF THE INCOME TAX OFFICER WARD - 3(3)(1)
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Appearance:
DARSHAN R PATEL(8486) for the Petitioner(s) No. 1
AADITYA D BHATT(8580) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 08/04/2026
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. RULE returnable forthwith. Learned Senior Standing Counsel
Mr.Aaditya Bhatt waives service of notice of rule for respondent.
2. Since the captioned writ petitions are identical as the petitioners being
co-owners and are based on a search conducted in B Safal Group, hence, the
facts are taken from Special Civil Application No.1293 of 2026.
3. The writ petition has been filed challenging the Notice issued under
Section 148 of the Income Tax Act, 1961 (for short, "the Act") dated
26/27.03.2025, along with the Notice under Section 142(1) of the Act dated
13.11.2025, 23.12.2025, 22.12.2025 for the Assessment Year 2021-22.
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C/SCA/1293/2026 JUDGMENT DATED: 08/04/2026
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FACTS OF THE CASE
4. The petitioner of Special Civil Application No.1293 of 2026 filed his
return of income for Assessment Year 2021-22 on 22.12.2021. Pursuant to a
search conducted in BSafal Group on 28.09.2021, the respondent, on
26.03.2025, sought approval of the satisfaction note recorded in the case of the
petitioner. Thereafter, the petitioner received a copy of the approval under
Section 151 of the Act on 26.03.2025, and on the same date, a notice under
Section 148 of the Act was issued, for reopening the case of the petitioner.
5. On 18.04.2025, the petitioner addressed a letter to the respondents
objecting to the initiation of proceedings. The respondent relied upon the seized
material found during the search and recorded his satisfaction note based on the
seized material and came to the conclusion that the petitioner had jointly
purchased the property with Rajesh Kumar H. Thakkar and an unaccounted
cash component was of Rs.11,81,96,262/-. The petitioner received Notice
under Section 143(2) read with Section 147 of the Act on 10.09.2025.
6. On 28.112025, the petitioner filed reply in pursuance of the Notice and
stated that the petitioner had not entered into any transaction with Bsafal Group
or City Estate Management India or City Procon Retailors Pvt. Ltd and the
petitioner had purchased the parcel of land situated at Jashpur, Taluka
Khodiyar, jointly with co-owner Shri Rajesh Thakkar during the year under
consideration. The said land was purchased directly from Shri Umaben Patel
for for a total consideration of Rs.2,25,00,000/-, and enclosed a copy of the
registered purchase deed. It was further submitted that TDS at the rate of
0.75% had been deducted from the payments made to Smt. Umaben Patel and
that the entire transaction was carried out through proper banking channels
without any unaccounted cash component. The Petitioner also stated that she
had neither entered into any such transaction nor had any connection with the
alleged Bsafal Group, City Estate Management India or City Procon Realtors
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Pvt. Ltd. It was further contended that the seized material was merely a
handwritten note which neither contained the name nor the signature of the
petitioner and, therefore, had no nexus with her. The petitioner further pointed
out that the seized material pertained to 09.11.2018, whereas the property was
purchased by the petitioner on 23.02.2021 and, therefore, there was no live link
between the seized material and the transaction in question.
SUBMISSIONS OF PETITIONERS
7. Learned advocate Mr. Patel, appearing for the petitioners has submitted
that the seized material has no nexus whatsoever with the transaction
undertaken by the petitioner. It is submitted that the respondent has relied upon
an enquiry register and a handwritten note, which neither contain the name nor
signature of the petitioner and merely indicate tentative market rates of certain
properties. The said material pertains to the period prior to the petitioner's
purchase of the property i.e. on 23.02.2021. It is further submitted that despite
this, the respondent has adopted a rate reflected in such seized material and, on
that basis alone, concluded that there was an unaccounted cash component
involved in the petitioner's transaction, though the entire sale consideration of
Rs.2,25,00,000/- was paid through banking channels after deduction of TDS
and no incriminating material linking the petitioner with any alleged cash
payment has been found.
8. It is submitted that the petitioner had not entered into any transaction
with Bsafal Group, City Estate Management India, or City Procon Realtors
Private Limited. The petitioner had jointly sold the parcel of agricultural land
situated at Jashpur with co-owners Shri Rajesh Thakkar during the year under
consideration. The said land was purchased for a total consideration of
Rs.2,25,00,000/-, out of which the petitioner's share was 55%, i.e.,
Rs.1,23,75,000/-.
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9. It is further submitted that the seized material is dated 09.11.2018,
whereas the petitioner purchased the agricultural land on 23.02.2021 which is
subsequent to the date reflected in the seized material. Thus, the petitioner has
no connection whatsoever with the said material, and there is no live link
between the seized material and the petitioner.
10. In support of his submissions, learned advocate Mr.Patel has placed
reliance on the judgment of this Court in the case of Naliniben Jagdishkumar
Gandhi vs. Income Tax Officer, (2026) 183 taxmann.com 126 (Gujarat).
11. While supporting the arguments learned advocate Mr.Patel, at the outset,
has submitted that the provision of Section 148 of the Act would not get
attracted in the present case, as the seized documents neither pertains to the
petitioner nor any information contained therein relates to the petitioner and the
entire reopening is premised on the noting in a loose paper. He has further
submitted that the petitioner has purchased land from Shri Umaben Patel which
shows no connection with either Bsafal Group or City Estate Group. It is
contended that the petitioner has not paid any on-money on purchase of the
said land.
SUBMISSIONS OF RESPONDENT
12. Vehemently opposing the present writ petition, the submissions
advanced as recorded here-in-above, the learned Senior Standing Counsel Mr.
Aaditya Bhatt has submitted that as per the provision of Section 148 of the Act,
more particularly Clause 4 to Explanation 2, it cannot be said that the
information, which is unearthed during the search proceedings from the
concerned broker, does not pertain or pertains to any information contained
therein relates to the assessee.
13. It is submitted that the legislature has deliberately used the expansive
phrases "pertains to" and "relate to". Unlike the stringent requirement of
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C/SCA/1293/2026 JUDGMENT DATED: 08/04/2026
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"belongs to" under the erstwhile Section 153C of the Act regime and hence, as
per the decisions of the Supreme Court in the case of Raymond Woollen Mills
Limited vs. Income-tax Officer, [1999] 236 ITR 34 (SC), the revenue has only
to see whether there was a prima facie some material on the basis of which the
department could reopen the case and the sufficiency or correctness of the
material is not a thing to be considered at this stage of issuance of notice.
14. Further, reliance is also placed by learned Senior Standing Counsel
Mr.Bhatt on the decision of the Supreme Court in the case of Assistant
Commissioner of Income-tax vs. Rajesh Jhaveri Stock Brokers (P.) Private
Ltd., [2007] 291 ITR 500 (SC) and it is submitted that the only question which
is required to be examined at the stage of issuance of notice is whether there
was relevant material on which a reasonable person could have formed a
requisite belief.
15. Reliance is also placed on the decision of the Supreme Court in the case
of Anshul Jain vs. Principal Commissioner of Income-tax, [2022] 143
taxmann.com 38 (SC). It is submitted that in the present case, the documents
which are documents/incriminating material which have been recovered during
the search proceeding, cannot be said to be dumb documents, devoid of any
evidential value. It is submitted that the material which was seized specifically
mentions the names of the brokers or third parties and the same reveal the link
between the petitioner and the land dealing, by paying the on- money. Thus, it
is urged that, at this stage, the Court may not interfere with the reopening of the
assessment.
ANALYSIS & OPINION
16. We have heard the learned advocates appearing for the respective parties
at length.
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C/SCA/1293/2026 JUDGMENT DATED: 08/04/2026
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17. A search under Section 132 of the Act was conducted on BSafal Group
and City Estate Group on 28.09.2021 and during the search, it is the case of the
revenue that incriminating documents and digital data were seized. Post search,
a statement of one Shri Pravin Nagjibhai Bavadia was recorded after he was
confronted with the documents found and seized from the premise of the City
Estate Management, which is a broker, dealing with land deals in the City of
Ahmedabad. Statement under Section 131 of the Act of Shri Pravin Nagjibhai
Bavadiya are incorporated in the impugned notice. A specific question No.14,
was asked to him with regard to the documents found during the search and in
response, he has submitted that 'I confirm that the documents were found and
seized from the premises of the propriety entity City Estate Management' It is
further responded by him that sometimes the clients come with their land
documents or title deeds and there might be such types of documents which are
also seized with the above annexures and these belonged to the clients and not
to him. Question No. 26, when he was confronted with the annexures, he has
referred that such annexure contained the details of lands/plots available for
sale at different locations of Ahmedabad and each entry contains the details of
land, location, village, taluka, survey number, area, rate, owner of the land, etc.,
and he doesn't know the current status regarding the sale of the land. So far as
the case of the petitioner is concerned, the reopening is premised on a loose
paper chit, which makes reference to Survey No.214/A and 215 situated at
Khodiyar, which was sold by the petitioner on 23.02.2021. The relevant
contents of the said chit are as under:
09/11/2018 Behind R.K Farm, lilapur road
Khodiyar (R3 Zone) T.P 229 F.P 413-414
S.No. 214/A , 215
20630 sq.yd Rate -17,000/-
Krupeshbhai Gajipara
18. Thus, the Assessing Officer, after calculating the amount per square
yard on the basis of the figures referred to in the chit, concluded that the total
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C/SCA/1293/2026 JUDGMENT DATED: 08/04/2026
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value was Rs. 2,25,00,000/-. By comparing the said amount with the sale
consideration reflected in the sale deed dated 23.02.2021, it was further
concluded that the differential amount had been paid in cash as "on-money".
The respondents have, however, not established any connection with the
individual, Krupeshbhai Gajipara, who is referred to in the chit.
19. A bare perusal of the chit reveals that it does not contain any names or
identifiable figures, and the same is dated 09.11.2018. After a gap of almost
three years, the petitioner sold the land vide sale deed dated 23.02.2021. We
fail to understand how the Assessing Officer has alleged payment of "on-
money" by the petitioner after almost three years from the date mentioned in
the loose paper, by arriving at a rate of Rs.20,630/- per square yard, when the
petitioner was not even the owner at the relevant time. The survey number
mentioned in the loose paper is linked with the petitioner by the revenue by
gathering information from the government Website "Any RoR", which
records the details of the sale deeds. It is true that the cash transactions are
done in a clandestine manner using coded script, however, the revenue, before
re-opening the assessment has to establish a live link of the assessee on the
basis of seized material only. The expression " relates to" and "pertains to"
used in Clause(iv) to Explanation 2 to Section 148 of the Act cannot be used in
vacuum. The revenue after the seizure of incriminating material is under an
obligation to analyze such material, in light of attendant circumstances and
record relevancy and a prima facie opinion linking such material establishing
escapement of income at the hands of the assessee. The information which is
derived from the incriminating material in the instant case, does not establish
live-link. The information is absolutely vague and unspecific and the rate of
mentioned in the loose paper is attempted to be imposed upon the petitioner
prospectively to the sale deed registered on 23.02.2021. The statement of Shri
Bavadiya does not mention the name of the petitioner. There is no link of the
petitioner with 'Krupeshbhai Gajipara' whose name is found in the loose
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paper. There is no link, even prima facie, established with Safal Group or City
Estate Management. All these aspects are very relevant, and are required to be
examined before roping the petitioner in re-assessment.
20. Hence, in our opinion, the provisions of Section 148 of the Act will not
get attracted in the present case, in such circumstances. Thus, in our considered
opinion, the provision of Section 148A of the Act is not attracted, as no live
link has been established between the petitioners and the transaction in
question after a period of almost three years.
21. We are conscious about the legal precedent as set out by the Supreme
Court in the decisions referred by the revenue. At the stage of notice of re-
opening of the assessment, albeit, the Court cannot go into the sufficiency of
evidence, however, simultaneously the Court has to examine the aspect as to
whether there is even prima facie some material, which could enable the
department to reopen the assessment. In the present case, the reopening is
based on a vague, irrelevant, and non-specific information.
22. The writ petitions, accordingly, succeed. The impugned Notices issued
are quashed and set aside. Rule is made absolute.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
Radhika/22
