Gopal Prasad Gupta Vs ACIT (Rajasthan High Court)
The Rajasthan High Court considered a batch of writ petitions challenging notices issued under Section 148 of the Income-tax Act, 1961, and the consequent rejection of objections, where the basis for reopening was material seized during a search conducted on a third party (the Manihar Group). The lead case concerned Assessment Year 2014–15. The petitioner contended that since the foundation of the reassessment was incriminating material seized in a search of another person, the Department was required to proceed under the special regime of Section 153C, not the general reassessment provisions of Sections 147/148. The respondents argued that Sections 153A–153D do not eclipse Section 148 and that reassessment under Section 148 remains available even in search-related cases.
Read SC Judgment in this case: Section 148 Cannot Bypass Section 153C Search Assessment Framework: SC
Tracing the legislative history of search assessments, the Court explained the evolution from the block assessment regime (Sections 158B–158BG) to the special procedure under Sections 153A–153D, which overrides regular assessment and reassessment provisions. The Court detailed the scope and mechanics of Sections 153A and 153C, emphasizing that where material seized during a search “belongs to” or “relates to” a person other than the searched person, proceedings must be initiated under Section 153C upon satisfaction of the twin conditions: (i) transfer of the seized material by the Assessing Officer of the searched person, and (ii) satisfaction of the Assessing Officer having jurisdiction over the other person that the material bears on determination of total income for the relevant preceding years. Once invoked, assessment must proceed in accordance with Section 153A to assess or reassess the “total income” for the relevant years.
