Dignesh Pramukhlal Patel Vs ACIT (Gujarat High Court)
The Gujarat High Court examined a writ petition challenging the validity of an order dated 07.04.2022 passed under Section 148A(d) of the Income Tax Act, 1961, along with a notice issued under Section 148 for Assessment Year 2018–19. The petition was initially admitted on the issue of jurisdiction, which had already been decided earlier, and was subsequently taken up for consideration on merits.
The petitioner had filed a return of income on 27.07.2018 declaring total income of Rs.27,26,64,000. The case was selected for scrutiny assessment under Section 143(3). During the assessment proceedings, notices under Section 142(1) were issued to determine taxable capital gains, particularly relating to the sale of shares. The petitioner responded on multiple occasions, furnishing complete details regarding the sale of shares, computation of capital gains, and claim under Section 54F. Based on the material and explanations provided, the Assessing Officer accepted the returned income and passed an order under Section 143(3) on 12.03.2021.
Subsequently, on 21.03.2022, a notice under Section 148A was issued proposing reassessment on the ground that there had been a change in control due to a change in directors of the company whose shares were sold. It was alleged that the capital gains should instead be treated as business income, resulting in escapement of income. The petitioner filed a reply on 28.03.2022, providing details and contesting the basis of the notice. Despite this, the Assessing Officer passed an order under Section 148A(d) on 07.04.2022 and issued a notice under Section 148 on the same date, which were challenged in the present petition.
