A notice under Section 148 of the Income Tax Act issued beyond four years without proper examination of material facts is invalid and lacks jurisdiction.

JUDGMENT :

(Bhargav D. Karia, J.)

1. Heard learned Senior Advocate Mr. Tushar Hemani for learned advocate Ms. Vaibhavi Parikh for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for for learned Senior Standing Counsel Mrs. Kalpana K. Raval for the respondents.

2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule for the respondent.

3. Having regard to the controversy in narrow compass, with the consent of the learned advocate for the respective parties, the matter is take up for hearing.

4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the validity and jurisdiction of the notice dated 23.03.2020 issued under section 148 of the Income Tax Act, 1961 [for short ‘the Act’] for the Assessment Year 2013-14.

5. The petitioner filed return of income on 27.09.2013 showing total income of Rs. 2,33,750/- for the year under consideration. The same was taken-up for scrutiny assessment and assessment order under section 143(3) of the Act was passed on 27.01.2016 accepting return of income.

5.1 Thereafter, the notice under section 148 of the Act was issued. The petitioner filed return in response to the notice and requested for providing reasons recorded by the Assessing Officer. The Assessing Officer provided reasons recorded which reads as under:

“1. Brief details of the Assessee:- Assessee is a company bearing PAN:AABC06912F and has filed its return of income for A.Y. 2013-14 on 27.09.2013 declaring total income of Rs. 2,33,750/-. The assessment order u/s. 143(3) of the I.T.Act was passed on 27.01.2016 accepting returned income.

2. Brief details of Information collected/received by the AO: Information has been received from the Pr.CCIT, Gujarat, Anmedabad vide letter No.Pr.CC/ABD/CAP/Widening of Tax base/2015-16 dated 01.07.2015 through the CCIT-2, A’bad, Pr.CIT-3, A’bad and the Addl.CIT, Rangg-3(1), Ahmedabad vide letters dated 06.07.2015, 09.07.2015 and 24.07.2015 respectively about immovable property transaction amounting to Rs.1,85,81,151/-on 07.03.2013.

3. Analysis of information collected/received: The information received is about transaction made immovable property transaction of Rs. 1,85,81,151/- entered into on 07.03.2013 by the assessee during the year under consideration.

4. Enquiries made by the AO as sequel to information collected/received:

i) The ITBA/ITD data available in this office is verified.

ii) As per PAN data base, the case of the assessee is found to belong to the territorial jurisdiction of this ward.

iii) The assessee has filed its return of income for A.Y.2013-14 on 27.09.2013 declaring total income of Rs 2,33,750/-. The assessment order u/s. 143(3) of the I.T. Act was passed on 27.01.2016 accepting returned income.

iv) The information received through various letters is available on record.

5. Findings of the AO: The assessee has filed its return of Income for A.Y.2013-14 on 27.09.2013 declaring total income of Rs.2,33,750/-. The assessment order u/s. 143(3) of the I.T. Act was passed on 27.01.2016 accepting returned income. However on perusal of the assessment records, it is noticed that the new information staled above, as not been examined and assessed tn earlier assessment in the assessment order finalized no discussion about verification of such transaction of immovable property is made. Thus, on verification of case records, details/documents submitted by the assessee, etc. it is noticed that the property transaction as alleged in the information is not verified in the original assessment finalized. It is, thus, noticed that this issue has not been considered and neither true nature of such transaction has been disclosed by the assessee. This leads to the belief that the income chargeable to tax has escaped assessment to the extent of Rs.1,85,81,151/-. It is held in the case of Ram Prasad v ITO [1995] 82 Taxman 199 (All.) that “there is nothing to Suggest that an Assessing Of