Purvibhavin Shah Vs ITO (Gujarat High Court)
Section 148 Notice Invalid for AY Beyond 10-Year Limit from Search Year; HC Clarifies 6-Year vs 10-Year Limitation with Mandatory Inclusion of Search Year; Gujarat HC Rejects Revenue’s Method for 10-Year Limitation Calculation; Validity of Notice u/s 148 for AY 2014–15 Held Barred by Limitation in Search-Related Reassessment.
The Gujarat High Court examined whether a notice issued under Section 148 of the Income Tax Act for Assessment Year (AY) 2014–15, pursuant to a search conducted on 08.02.2024, was barred by limitation. The core issue was the method of computing the ten-year period under Section 153A read with Explanation 1. The Court held that the statute prescribes two distinct computation methods: six years “immediately preceding” the search assessment year, and ten years “from the end of the assessment year” relevant to the search year. Unlike the six-year block, the ten-year block includes the search assessment year as the starting point. Applying this interpretation, the ten-year period extended only up to AY 2015–16. Since AY 2014–15 fell beyond this permissible limit, the impugned notice was time-barred. The Court rejected the Revenue’s interpretation and quashed the reassessment notice and all consequential proceedings for lack of jurisdiction.
