Sorathia Mahesh Veljibhai HUF Vs ITO (Gujarat High Court)
The Gujarat High Court allowed the writ petition filed by Sorathia Mahesh Veljibhai HUF challenging the reopening of its income tax assessment for Assessment Year 2014-15. The petitioner had approached the High Court under Article 226 of the Constitution of India seeking to quash the reassessment notice dated 30 July 2022 issued under Section 148 of the Income Tax Act, 1961, along with the order of the same date passed under Section 148A(d). The principal contention was that the notice and the consequential order were barred by limitation, legally unsustainable and issued without jurisdiction.
The petitioner sought quashing of both impugned instruments, interim protection against their implementation and further reassessment proceedings for AY 2014-15, and other appropriate relief, including costs. The challenge was considered in light of the Gujarat High Court’s earlier decision in Keenara Industries Private Limited Versus The Income Tax Officer, Ward 1(1)(3), Surat, Special Civil Application No. 17321 of 2022 and allied matters.
Observing that the issue was already covered by that decision, the High Court issued urgent notice returnable forthwith. The Court requested senior standing counsel Mrs. Kalpana Raval, assisted by advocate Mr. Karan Sanghani, to appear for the respondent. It heard senior advocate Mr. Tusahr Hemani, assisted by advocate Ms. Vaibhavi Parikh, for the petitioner, and the Revenue’s counsel.
The High Court confined its consideration to the issue of limitation. Having regard to the fact that the relevant assessment year was 2014-15, the Court held that the petition deserved to be allowed in accordance with the reasoning already given in Keenara Industries Private Limited. Rather than reproducing the reasoning of the earlier judgment, the Court expressly relied upon that decision to dispose of the present challenge.
Consequently, the High Court allowed the petition and quashed both the notice issued under Section 148 dated 30 July 2022 and the order passed under Section 148A(d) on the same date. The Court also permitted direct service through electronic mode at the official email address in addition to the regular mode of service.
The ruling confirms that the reassessment proceedings initiated against the petitioner for AY 2014-15 could not survive the limitation objection, applying the Gujarat High Court’s decision in Keenara Industries. The judgment does not independently set out the complete statutory limitation calculation or examine the underlying merits of any alleged escaped income.
Cases Discussed
- Keenara Industries Private Limited Versus The Income Tax Officer, Ward 1(1)(3), Surat, Special Civil Application No. 17321 of 2022 and allied matters (Gujarat High Court) – Followed on the issue of limitation governing reassessment proceedings. The Court applied the earlier ruling to quash the Section 148 notice and Section 148A(d) order for AY 2014-15.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1.This petition is preferred under Article 226 of the Constitution of India seeking to challenge the notice dated 30.07.2022 issued under section 148 of the Income Tax Act, 1961 (‘the IT Act’ hereinafter) as well as the order dated 30.07.2022 passed under section 148A(d) seeking to reopen the income tax assessment of the petitioner for the assessment year 2014-15 on the ground that the notice and order are bad in law and without jurisdiction.
2. The prayers sought for by the petitioner are as follow:
“7… (a)quash and set aside the impugned notice as well as the impugned order at ANNEXURE”A (COLLY.)” to this petition; (b)pending the admission, hearing and final disposal of this petition, stay the implementation and operation of the impugned notice as well as impugned order at ANNEXURE”A (COLLY.)” to this petition and stay further proceedings for Assessment Year 2014-15; (c)any other and further relief deemed just and proper be granted in the interest of justice; (d)provide for the cost of this petition.”
3. Since the issue is covered by the decision of this Court in case of Keenara Industries Private Limited Versus The Income Tax Officer, Ward 1(1)(3), Surat, passed in Special Civil Application No.17321 of 2022 and allied maters, issue Urgent Notice to be made returnable forthwith.
4. We have requested learned senior standing counsel, Mrs.Kalpana Raval assisted by the learned advocate, Mr.Karan Sanghani to appear for the respondent.
5. We have heard the learned senior advocate, Mr.Tusahr Hemani assisted by the learned advocate, Ms.Vaibhavi Parikh and learned senior standing counsel, Mrs.Raval with learned advocate, Mr.Karan Sanghani.
6. Focusing on the issue of the limitation, as the assessment year here is 2014-15, without giving the separate reasoning those given in case of Keenara Industries Private Limited (supra) this petition deserves to be allowed.
7. Resultantly, this petition is allowed.
Notice under section 148of the IT Act dated 30.07.2022 and impugned order undersection 148A(d) dated 30.07.2022 are quashed and set aside.
8.Over and above the regular mode of service, direct service through e-mode on official email address is also permitted.
