Trupti Aakash Desai Vs ITO (Gujarat High Court)
Gujarat HC Quashes Section 148 Notice Because Retrospective Notional Land Rates Cannot Justify Reopening; Section 148 Notice Invalid Because Seized Material Neither Pertained to Nor Related to Assessee; Reopening Under Section 148 Fails Because Revenue Could Not Establish Prima Facie Link with Assessee; Gujarat HC Quashes Reassessment Because Revenue Relied on Vague Third-Party Information; Section 148 Cannot Be Invoked Because Reassessment Was Based on Unrelated Loose Paper and Retrospective Comparison: Gujarat HC
The Gujarat High Court quashed the notice issued under Section 148 of the Income-tax Act, 1961, holding that the reassessment proceedings were based on vague third-party material, lacked a live link with the assessee, and relied upon a retrospective application of a notional land rate. The Court held that Section 148 could not be invoked where the seized material neither pertained to nor related to the assessee in a manner establishing a prima facie case of income escaping assessment.
The petitioner, a salaried individual, had filed her return of income for Assessment Year 2019-20 declaring ₹2.60 lakh. During a search conducted under Sections 132/132A on the BSafal Group and City Estate Group, the Revenue seized documents from City Estate Management, a real estate broker. Based on a loose paper containing survey numbers, the notation “Sq. Yard with NA Rate – ₹35,000” and the name “Dhaval Patel Krish“, the Assessing Officer reopened the petitioner’s assessment under Section 148. The Revenue compared the notional rate mentioned in the loose paper with the petitioner’s registered sale of land in Survey No. 211, which had been sold through a registered sale deed on 28.08.2018 for ₹83 lakh, and computed a substantially higher value based on the notional rate of ₹35,000 per square yard.
