Reassessment notice under Section 148 invalid due to exceeding statutory limitation for assessment years prior to April 2021, breaching prescribed timelines under Income Tax Act.

JUDGMENT :

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1. RULE. Learned Senior Standing Counsel Mr. Maunil Yajnik waives service of notice of rule on behalf of the respondent – Department.

2. At the outset, learned Senior Standing Counsel Mr. Maunil Yajnik has submitted that the issue raised in the present writ petition is squarely covered by the decision of this Court rendered in Special Civil Application No. 16615 of 2025 dated 05.01.2026. Hence, with the consent of the respective parties, the matter is taken up for final disposal today itself.

3. The present petition under Article 226 of the Constitution of India, the petitioner has prayed to quash and set aside the notice issued under Section 148 of the Income Tax Act, 1961 and consequent Assessment Order passed under Section 147 read with Section 143 (3) of the Income Act, 1961 dated 18.05.2025 for the Assessment Year 2012-13.

4. The brief facts giving rise to the filing of the present writ petition are that the petitioner is engaged in the business of real estate and financing under the name and style of ‘Mahavir Developers’. The petitioner had filed its return of income for the Assessment Year 2012-13 on 28.09.2012 declaring a total income of Rs.15,57,960/-. It is the case of the petitioner that additionally the petitioner falls under the purview of tax audit under Section 44AB of the Income Tax Act, 1961 (for short “the Act”) and has submitted the audit report in Form 3CB-3CD. The petitioner thereafter filed its revised return of income on 19.03.2014 declaring total income of Rs.64,93,660/-.

4.1. It is further the case of the petitioner that initially the petitioner was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS), pursuant to which an Assessment Order under Section 143 (3) of the Act was passed on 12.03.2015 by accepting the return of income. Subsequently, the case of the petitioner was selected for reassessment vide order dated 19.06.2019 passed under Section 147 read with 143(3) of the Act.

4.2. It is the case of the petitioner that on 11.11.2022, a search and seizure operation was conducted by the Investigation Wing, Gandhidham in the case of Khavda Group of Gandhidham whereby, 40 premises including both the residential and business premises of the petitioner were recovered. In the said search, certain documents were found and seized by the respondent and further also recorded the statement of the petitioner.

4.3. Based on such information, reassessment proceedings were initiated and notice under Section 148 of the Act was issued on 31.03.2023 by the Income Tax Officer, Ward-1, Gandhidham. It is further the case of the petitioner that thereafter notice under Section 142 (1) of the Act was issued on 06.07.2023. Subsequent thereto, the case of the petitioner was centralized and another notice under (1) of the Act was issued on 22.02.2024 by the respondent and in response to the same, the petitioner filed its reply on 20.03.2024.

4.4. Pursuant thereto, the respondent issued notice dated 31.03.2024 stating that the seized materials were received from the office on 27.10.2023 and therefore, the limitation period for completion of assessment stood extended upto 27.09.2024 in terms of clause (xii) of Explanation 1 to Section 153 of the Act. Thereafter, several notices were issued to the petitioner calling for various details and documents.

4.5. On 30.07.2024, a show cause notice under Section 142 (2A) of the Act was issued calling upon the petitioner to explain as to why the books of accou