Mahendra Gumanmalji Lodha HUF Versus ACIT (Gujarat High Court)
Summary: The Gujarat High Court allowed the writ petition filed by Mahendra Gumanmalji Lodha HUF and quashed and set aside the impugned reassessment notice. The Court held that the reopening of the assessment amounted to a change of opinion because the relevant issue concerning the unsecured loan had already been examined during the original assessment proceedings under Section 143(3) of the Income Tax Act, 1961, and no new tangible material had been unearthed by the Assessing Officer.
The proceedings concerned Assessment Year 2012-13. On 22.06.2026, the Court had directed the Revenue to examine the assessment order dated 29.03.2024 passed for Assessment Year 2014-15 and to consider the findings/conclusions contained in the report of the Deputy Director of Income Tax (DDIT) dated 14.03.2019. The Court had noted that the assessment for Assessment Year 2014-15 had been completed without modification of the income determined in the original assessment under Section 143(3), which was Rs.49,51,150/-. The Court also directed the Revenue to examine whether the case for Assessment Year 2012-13 was covered by the same findings and, if so, to place an appropriate affidavit on record.
Pursuant to that direction, the Revenue filed an affidavit-in-reply dated 17.07.2026. The Court took the affidavit on record. In paragraphs 3, 4 and 5 of the affidavit, the Revenue stated that the assessment proceedings for Assessment Year 2014-15 assumed significance because the reassessment proceedings for Assessment Year 2012-13 had remained pending due to interim orders of the Court, whereas the subsequent assessment year had been completed after examination of substantially similar information.
The Revenue stated that, on verification of the available records, no fresh or independent material had been noticed which materially distinguished the facts of Assessment Year 2012-13 from those of Assessment Year 2014-15, except for the ground raised by the petitioner that it had received only Rs.16,89,977/- from Mahendra Gumanmal Lodha and had not received any amount from Chitra Mahendra Lodha during the concerned assessment year. According to the affidavit, that aspect would require separate factual verification at the time of assessment proceedings.
The Revenue further submitted that, on a prima facie examination of the material available on record, no material distinction had emerged between the factual matrix of Assessment Years 2012-13 and 2014-15, as the replies, explanations and documentary evidence furnished by the petitioner during the reassessment proceedings for Assessment Year 2012-13 appeared to be substantially similar to those furnished for Assessment Year 2014-15. The Revenue also stated that, since the reassessment proceedings were stayed pursuant to the order dated 19.12.2019, the proceedings for Assessment Year 2012-13 could, upon vacation of the stay, proceed in consonance with the findings recorded for Assessment Year 2014-15, subject to any additional material and explanation that might emerge during the proceedings.
The High Court observed that the Revenue had not denied that comparison of the assessment proceedings for Assessment Year 2014-15 with the reassessment proceedings for Assessment Year 2012-13 could establish that there was no material distinction in the factual matrix, except for the issue concerning receipt of Rs.16,89,977/- from Mahendra Gumanmal Lodha, which was required to be examined.
The Court further noted that, during the original assessment proceedings, the Assessing Officer had called upon the petitioner to furnish details of the unsecured loan received from Mahendra Gumanmal Lodha and Chitra Mahendra Lodha. Those proceedings culminated in the assessment order dated 31.12.2014 passed under Section 143(3) of the Income Tax Act, 1961.
In view of the admission contained in the Revenue’s affidavit and the fact that the aspect of the unsecured loan from Mahendra G. Lodha had already been examined in the original assessment proceedings culminating in the Section 143(3) assessment order, the High Court held that reopening the assessment was nothing but a change of opinion. The Court specifically found that there was no new tangible material unearthed by the Assessing Officer.
Accordingly, the writ petition succeeded and the impugned notice was quashed and set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. On 22.06.2026, this Court has passed the following order :-
“1. Learned Senior Advocate, Mr.Tushar Hemani appearing for the petitioner, at the outset, submitted that for the Assessment Year (for short ‘A.Y.’) 2014-15, the respondent has passed an assessment order dated 29.03.2024 without modification of any assessment of the income, which was done by the original assessment order passed under Section 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) of Rs.49,51,150/-. It is submitted that the report of the Deputy Director of Income Tax (for short ‘DDIT’), which is placed on record along with the affidavit-in-reply by the respondent refers to the consolidated findings/conclusion with regard to the alleged unexplained income for the Financial Year (for short ‘F.Y’) 2011-12, 2012-13 and 2013-14. Thus, it is submitted that for F.Y.-2013-14 (A.Y.-2014-15), the respondent on the very same material and the findings/conclusion recorded by the DDIT, has chosen not to interfere with the original assessment order passed under Section 143(3) of the Act in case of the petitioner.
2. Under the circumstances, we direct the learned Senior Standing Counsel, Mr.Dev D. Patel to take appropriate instructions from the respondent with regard to the assessment order dated 29.03.2024 passed in favour of the petitioner for A.Y.-2014-15. We clarify that the respondent shall examine the case of the petitioner on the basis of the conclusion/findings arrived at by the DDIT in its report dated 14.03.2019. If the case of the petitioner is covered for the A.Y.- 2012-13 and if it is opinion of the revenue that the similar assessment order which has been passed for A.Y.- 2014-15, is required to be passed, an affidavit to such extent shall be placed before this Court by the next date of hearing.
3. List the matter on 06.07.2026.”
2. Pursuant to the aforesaid order, today, learned Senior Standing Counsel Mr. Dev Patel has tendered the affidavit-in-reply dated 17.07.2026. The same is ordered to be taken on record.
3. The contents of the affidavit-in-reply, more particularly, paragraph nos. 3,4 and 5 reads as under:-
“3. It is further submitted that the finding recorded in the assessment proceedings for A.Y 2014-15 assume significance as the reassessment proceedings for A.Y. 2012-13 remained pending due to the interim orders passed by the this Court whereas the subsequent assessment year was completed after examination of substantially the similar information. On verification of the available records, no fresh or independent material has been noticed which materially distinguishes the facts of the A.Y 2012-13 from those for A.Y 2014-15 except for the ground raised by the petitioner in the present petition and that in fact it had only received Rs.16,89,977/- from Mahendra Gumanmal Lodha and did not received any amount from Chitra Mahendra Lodha during the concerned assessment year. The said ground would require separate factual verification at the time of assessment proceedings.
4. In view of the what is stated hereinabove, it is submitted that on prima facie examination of the material presently available on record, no material distinction has emerged between the factual matrix of A.Y 2012-13 and 2014-15 except for the ground mentioned hereinabove, as the replies, explanation and documentary evidences furnished by the petitioner during the reassessment proceedings for the A.Y 2012-13 at this stage seems to be substantially similar to those furnished in A.Y 2014-15.
5. It is submitted that the reassessment proceedings are stayed pursuant to the order dated 19.12.2019 passed by this Court and therefore it is submitted that upon the vacation of the stay by, based on the material presently available, it prima facie appears that the reassessment proceedings for A.Y 2012-13 may proceed in consonance with the findings recorded in A.Y 2014-15 and in compliance of any direction that may be issued by this Court and subject to any additional material and explanation that may emerge during the course of the proceedings.”
4. Thus, it is not denied by the respondents that the assessment proceedings for assessment year 2014-15, and the re-assessment proceedings for assessment year 2012-13, if are compared could establish that there is no material distinction in the factual matrix except that in the present case is for assessment year 2012-13, and the factum of receiving Rs.16,89,977/- from Mahendra Gumanmal Lodha is required to be examined. It is not in dispute that in the original assessment proceedings, the details of unsecured loan received from Mahendra Gumanmal Lodha and Chitra Mahendra Lodha were called for from the petitioner by the Assessing Officer and ultimately, the Assessment Order dated 31.12.2014 passed under Section 143(3) of the Income Tax Act, 1961 (for short ‘the Act’).
5. Thus, in view of the aforesaid admission made in the affidavit-in-reply and denial of the aforesaid aspect of the unsecured loan from Mahendra G. Lodha has already been examined in the original assessment proceedings which culminated into Assessment Order under Section 143(3) of the Act, the reopening of the assessment proceedings is nothing but a change of opinion as there is no new tangible material unearthed by the Assessing Officer.
6. Accordingly, the present writ petition succeeds. The impugned Notice is hereby quashed and set aside.
