Reassessment notices for search-related outcomes must strictly adhere to the ten-year statutory limitation period. This period is calculated backward from the end of the assessment year relevant to the financial year in which the search was conducted; notices issued beyond this block are without jurisdiction.

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 24.03.2025 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 13.03.2016 declaring a total income of Rs.3,30,160/-. 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-purchasers and that he has purportedly paid unaccounted cash consideration of Rs. 80,80,000/-, which is alleged to have escaped assessment. Therefore, on the basis of the said information, the respondent on 24.03.2025 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 28.04.2025 declaring the income of Rs. 3,30,160/-. Thereafter, the petitioner filed detailed objections on 27.02.2026. Thereafter, the respondent without considering the objections raised by the petitioner, passed an order disposing of the objections on 05.03.2026 and also has issued a show cause notice calling upon the Petitioner to explain as to why an addition of Rs. 80,80,000/- should not be made u/s 69 r.w.s. 115BBE of the Act and directed to submit a reply on or before 12.03.2026. 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 be issued at any time in case for the relevant Assessment Year beginning on or before 1st day of April, 2021, and if notice under Section 148 or under Section 153A or Section 153C of the Act could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of Section 149 or Section 153A or Section 153C of the Act, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021.

5.1. It is contended that the reassessment proceedings were initiated based on the documents pertaining t