COMMON ORAL JUDGMENT

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

1. Rule, returnable forthwith. Learned Senior Standing Counsel Mr. Aaditya Bhatt waives service of notice of rule for respondent.

2. In the present petition, the petitioners have assailed the notice dated 31.03.2025 issued by the respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short) for the Assessment Year 2020-2021.

3. For convenience, SCA No.3676 of 2026 is considered as a lead matter and the facts of the case are incorporated from SCA No.3676 of 2026:

3.1 The petitioners filed the return of income on Assessment Year: 2020-21 on 29.01.2021, declaring the total income of Rs. 17,50,220/-. A notice under Section 148 of the Act was issued on 31.03.2025, alleging escapement of income on the ground that a search under Section 132 of the Act was conducted in the case of BSafal Real Estate and City Estate Management Group, during which certain documents purportedly pertaining to the petitioners were found. During the course of search, it was found that M/s.City Estate Management India, a Real Estate Broker, is providing broking service to BSafal Group.

3.2 It is alleged that the cash transactions in real estate were being done by selling various lands/plots etc. in and around Ahmedabad city. The details of address, name of person, survey numbers of the land in question and the market rate of property were unearthed during such proceedings. Post search, the statement of one Shri Pravin Nagjibhai Bavadiya was recorded by the revenue, the relevant extract of the statement recorded under Section 131 of the Act dated 27.12.2021 is incorporated in the impugned notice. Based on such material, the revenue has reopened the assessment by issuing the notice under Section 148 of the Act.

3.3 It is the case of the Revenue that for Survey Nos.347 and 351 were sold by the petitioners vide sale deed dated 29.04.2019 to one Shri Natwarlal Hiralal Shah and from the seized document, it was found that the rate prescribed was Rs.2.25 crores per vigha, whereas the property of Survey No.347 was sold at Rs.72,36,056/- as per the sale deed dated 29.04.2019 (Final Plot area of 20671 square meters, which is equivalent to 8.69 Vigha) and (the Final Plot area of the same Survey No.351 i.e. 754 square meters, which is equal to 0.32 Bigha), was sold at Rs.2,63,944/- through the same sale deed dated 29.04.2019. Thus, as per the sale deed, the land was sold for a total of 75 lakhs for Survey Nos.347 and 351, situated at Sitapur whereas, as per the seized document, the value of the immovable property under consideration, the rate is mentioned as 2.25 crores per vigha and hence, it is alleged by the revenue that a huge amount was paid in cash as on-money.

4. Learned advocate Mr.Hardik Vora appearing for the petitioners has submitted that the petitioners, who have already sold their land on 29.04.2019 are sought to be roped in the reassessment proceedings on an entry made in a loose paper in the inquiry Registered on 28.09.2019, which is subsequent and hence the petitioners cannot be held responsible by alleging that he has paid some on–money by cash. It is thus submitted that the entire reopening is premised on an incorrect fact and there is no live link to the alleged rates mentioned in the inquiry Register on a loose paper directly linking to the petitioners and hence the provision of Section 148(4) of the Act would not get attracted.

4.1 Learned advocate Mr.Vora has further submitted that out of these two petitioners (who have sold the land to Natwarlal Hiralal Shah), the third seller Mukesh Prahladbhai Patel was also subjected to reopening proceedings on the basis of the same search ultimately by the assessment order dated 25.03.2026. The Assessing Officer has computed the income as NIL and hence it is submitted that the impugned reopening may be quashed and set aside.

5. Vehemently opposing the present writ petition, the sub