Vinod Bhai Babubhai Pate Lhuf Vs ITO (Gujarat High Court)
The Gujarat High Court allowed the writ petition and quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015–16, holding that it was beyond the permissible limitation period. The petitioner had originally filed a return declaring income of ₹2,11,620/-. Subsequently, a search conducted on May 9, 2024 led to discovery of documents indicating alleged unaccounted cash consideration relating to immovable property. Based on this material, the department issued a notice dated March 31, 2025 seeking to reopen the assessment.
The petitioner challenged the notice on the ground that it was barred by limitation. It was contended that since the search was conducted within the period from April 1, 2021 to September 1, 2024, the provisions of Sections 147 to 151 as they existed prior to the Finance (No. 2) Act, 2024 would apply. The petitioner argued that under the applicable framework, reassessment proceedings triggered by search must comply with the time limits prescribed under Sections 149 and 153A/153C, including the outer limit of ten years.
The Court examined the statutory provisions and noted that for searches conducted in the relevant period, the earlier regime continues to apply. It analyzed the computation of limitation under Section 149 read with Section 153A, emphasizing that the ten-year period must be calculated from the end of the assessment year relevant to the year in which the search was conducted. Applying this method, the Court found that the relevant block of ten assessment years did not include Assessment Year 2015–16, which fell beyond the permissible range.
