Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Guj) 4722

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.S. Supehia, Pranav Trivedi, JJ
Sanvira Holdings – Appellant
Versus
Assistant Commissioner Of Income Tax – Respondent
R/SPECIAL CIVIL APPLICATION NO. 2006 of 2026

Advocates:
For the Appellants/Petitioners: Tushar Hemani, Vaibhavi K. Parikh
For the Respondents: Aaditya D. Bhatt

For calculating the ten-year block period for income tax reassessment post-search, the computation must commence from the end of the assessment year relevant to the financial year of the search, thereby necessitating the inclusion of the search-year assessment in the total count of years.

Headnote:(A) Income Tax Act, 1961 - Sections 147, 148, 149, 153A, 153C - Assessment of income - Reopening of assessment - Limitation - Computation of block period - Determination of 'relevant assessment year' for ten-year block - Whether search assessment year is included in ten-year block - Court held that six-year block follows 'immediately preceding' rule, excluding the search year, while ten-year block is calculated 'from the end of the assessment year' relevant to the search, necessitating inclusion of the search year in the block. (Paras 8, 9)

(B) Statutory Interpretation - Legislative intent - Where statute provides distinct modes of computation for six-year and ten-year blocks, different phraseologies used must be given full effect - Interpretation of 'from the end of the assessment year' contemplates inclusion of the terminal year in reckoning. (Para 8)

Facts of the case:
A notice was issued for reopening the assessment of a partnership firm for a past assessment year following a search operation. The petitioner challenged the notice, claiming it was time-barred. The disagreement centered on whether the block period of ten years, used for the purpose of reassessment, should include the assessment year relevant to the financial year in which the search was conducted.

Findings of Court:
The court found that the legislative framework distinguishes between the six-year calculation ('immediately preceding') and the ten-year calculation ('from the end of the assessment year'). The latter phrase requires the assessment year of the search to be included in the ten-year count. Consequently, the assessment year in question lay outside the permissible ten-year window.

Issues: 1. Whether the assessment notice issued after the search was time-barred. 2. How to correctly interpret the expression 'relevant assessment year' when computing the ten-year block period for reassessment.

Ratio Decidendi: The statute intentionally employs different language for the six-year and ten-year blocks. The ten-year block is to be computed from the end of the assessment year of the search, which structurally requires the inclusion of that year in the reckoning. As the assessment year for which the impugned notice was issued fell beyond this computed ten-year period, the notice was deemed beyond jurisdiction.

Result: Petition allowed. Notice quashed and set aside.

Table of Content
1. assessment of factual background regarding search and seizure operations. (Para 1 , 2 , 3)
2. petitioner's contention that the assessment notice is barred by limitation. (Para 4 , 5)
3. respondent's defense on the computation of the ten-year block for income tax reassessment. (Para 6)
4. judicial assessment of the statutory limitations under section 153a and section 148. (Para 7 , 8)

ORAL JUDGMENT

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

1. Heard learned Senior Advocate Mr.Tushar Hemani appearing with Learned Advocate Ms. Vaibhavi K. Parikh for the petitioner and learned Senior Standing Counsel Mr. Aaditya D. Bhatt, for the respondent.

2. Having regard to the controversy involved, with the consent of the learned advocates for the respective parties, the matter is taken up for final hearing. Rule returnable forthwith.

3. By this petition under Article 226 of the Constitution of India, the petitioner challenges the notice dated 30.03.2025 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for short) seeking to re-open income tax assessment of the petitioner for the Assessment Year 2014-15 (hereinafter referred to as “the assessment year under consideration” for short) by the Assistant Commissioner of Income Tax, Circle, Gandhinagar (hereinafter referred to as “the respondent” for short).

3.1 The petitioner is a partnership firm and has filed the return of income for the assessment year 2014-15 on 30.11.2014 declaring total income at Rs.1,69,780/-. The petitioner is part of PSY Group which is engaged in the business of real estate.

3.2 The said PSY group and its associated groups of Gandhinagar including the petitioner were subjected to search action u/s. 132 of the Act on 08.02.2024. The Respondent issued a notice dated 30.03.2025 under Section 148 of the Act for the year under consideration. It is stated therein that a search was initiated under Section 132 of the Act on 08.02.2024 in the case of the Petitioner or in the case of the person in respect of which the Petitioner is assessable under the Act. It was further stated that the Respondent is satisfied, with the approval of Principal Commissioner or Commissioner, that the books of accounts or documents, seized or requisitioned under section 132 or section 132A of the Act in the case of PSY and its associated Groups pertains or pertain to, or any information contained therein, relate to the Petitioner or the person in respect of which, the Petitioner is assessable under the Act and hence, the notice dated 30.03.2025 is issued under Section 148 of the Act after obtaining prior approval of CCIT, Ahmedabad – 1.

4. The Petitioner has challenged the said notice u/s. 148 of the Act principally on the ground of limitation.

5. Learned Senior Advocate Mr. Tushar P. Hemani for the petitioner submitted that the respondent has acted illegally and without jurisdiction while issuing Notice under Section 148 of the Act as the same is barred by limitation. It was further contended that the impugned notice is time-barred under the statutory scheme governing search assessment. It was submitted that in the present case, search action in question was carried out on 08.02.2024 i.e. during the Financial Year 2023-24. Since the search under Section 132 of the Act was initiated on or after 1st April, 2021 but before 1st September, 2024, the provisions of Sections 147 to 151 of the Act as they stood immediately before the commencement of Finance (No. 2) Act, 2024 shall apply as contemplated under Section 152(3) of the Act. Relying upon Section 149 of the Act, it is contended that the notice under Section 148 of the Act can be issued up to six years from the end of the relevant assessment year. Further, relying upon the Section 153A of the Act, he would submit that notice under Section 153A of the Act can be issued for a period of “ten assessment years” immediately preceding the assessment year relevant to the previous year in which search is

Click Here to Read the rest of this document

2026 Supreme(Online)(Guj) 4722

IN THE HIGH COURT OF GUJARAT AT AHMEDABADA.S. Supehia, Pranav Trivedi, JJSanvira Holdings – AppellantVersusAssistant Commissioner Of Income Tax – RespondentR/SPECIAL CIVIL APPLICATION NO. 2006 of 2026

For calculating the ten-year block period for income tax reassessment post-search, the computation must commence from the end of the assessment year relevant to the financial year of the search, thereby necessitating the inclusion of the search-year assessment in the total count of years.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.S. Supehia, Pranav Trivedi, JJ
Sanvira Holdings – Appellant
Versus
Assistant Commissioner Of Income Tax – Respondent
R/SPECIAL CIVIL APPLICATION NO. 2006 of 2026