Dilipbhai Prabhudas Patel Vs DCIT (Gujarat High Court)
In Dilipbhai Prabhudas Patel Vs DCIT, the Gujarat High Court considered writ petitions challenging notices dated 26.03.2025 issued under Section 148 of the Income Tax Act for Assessment Year (AY) 2014-15 on the ground of limitation.
The petitioners were part of the PSY Group engaged in real estate business and were subjected to a search under Section 132 on 08.02.2024. Based on the search, notices under Section 148 were issued seeking reopening of assessments for AY 2014-15. The petitioners contended that the notices were barred by limitation because the ten-year period permissible under the statutory framework ended with AY 2015-16.
The petitioners argued that since the search was conducted during Financial Year 2023-24 relevant to AY 2024-25, the search assessment year itself had to be included while computing the ten-year block period under Explanation 1 to Section 153A. According to the petitioners, counting backwards from AY 2024-25 made AY 2015-16 the tenth year, thereby excluding AY 2014-15 from the permissible period.
The Revenue opposed the petitions and argued that the search assessment year should be excluded while computing the ten-year period. It contended that the reopening for AY 2014-15 fell within limitation if the calculation commenced from the assessment year immediately preceding the search assessment year.
