Reassessment notices issued beyond statutory time limits are invalid; the Income Tax Act specifies clear time frames for such actions based on search operations.

JUDGMENT :

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

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

2. At the outset, learned Senior Standing Counsel Mr. Karan Sanghani 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 dated 31.03.2025 for the Assessment Year 2015-16 to reassess the income and further to direct the respondent not to proceed further or pass final order under Section 143 (3) read with Section 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

4. The brief facts giving rise to the filing of the present writ petition are that the petitioner had filed its return of income for the Assessment Year 2015-16 on 28.03.2016 declaring a total income of Rs.5,06,940/-. It is the case of the petitioner that on 09.05.2024, search and seizure operation under Section 132 of the Act was conducted. During the course of search, certain loose papers, notarized documents and pocket diaries were found and seized. In the said search proceedings a notarized agreement dated 04.09.2013 relating to immovable property bearing Revenue Survey No. 129 T.P. No. 51 (Dabholi), Final Plot No. 160/A, Moje Dabholi, Surat along with certain cash noting were found. It is the case of the petitioner that relying on the said documents, the respondents alleged that the petitioner is one of the co-seller and is holding 25% share in the said property and that he had received unaccounted cash consideration of Rs.1,75,85,000/- which had escaped assessment. Therefore, on the basis of the said information, the respondent on 31.03.2025 issued notice under Section 148 of the Act after obtaining approval under Section 151 (ii) of the Act from the Chief Commissioner of Income Tax, Surat.

4.1. It is the case of the petitioner that in response to the said notice, a detailed reply was filed on 20.05.2025 declaring the income of Rs.5,06,940/-. Thereafter, the petitioner filed detailed objections on 08.04.2025, 03.05.2025 and 24.05.2025 respectively. It is further the case of the petitioner that without considering the objections of the petitioner, the respondent issued notice under Section 143 (2) of the Act on 25.06.2025. In response to the same, the petitioner filed its replies on 09.07.2025 and 11.07.2025 reiterating the objections and requested for disposal of the same by way of speaking order. Thereafter, the respondent without considering the objections raised by the petitioner, passed an order disposing of the objections on 14.10.2025. Hence, the petitioner is constrained to file the present writ petition.

5. It is submitted by learned advocate Mr. Vora that in the instant case, the search action was conducted on 09.05.2024 which falls within the specified period and therefore, the reassessment proceedings are governed by the provisions of Sections 147 to 151 of the Act as they stood prior to the amendments introduced by the Finance (No.2) Act, 2024. It is submitted that in the present case the year under consideration is Assessment Year 2015-16, and as per proviso to Section 149 (1)(b) of the Act no notice under Section 148 of the Act can