When computing the ten-year limit for reassessment following a search, the assessment year relevant to the search year must be included in the calculation, as the statutory framework for the ten-year block follows a specific computational rule distinct from that of the six-year block.

JUDGMENT :

A.S. SUPEHIA, J.

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. Varun K. Patel 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.

3. RULE. Learned Senior Standing Counsel Mr. Varun K Patel waives service of notice of rule on behalf of the respondent.

4. By this petition under Article 226 of the Constitution of India, the petitioner challenges the notice dated 22.03.2025 issued under Section 148 of the Income Tax Act, 1961 (for short “the Act”) seeking to re-open income tax assessment of the petitioner for the Assessment Year 2015-16 (for short “the assessment year under consideration”) by the Assistant Commissioner of Income Tax, Central Circle 2(3), Ahmedabad (for short “the respondent”).

4.1 The petitioner is an individual who filed his return of income for the assessment year 2015-16 on 29.02.2016 declaring total income at Rs.91,03,120/-. The petitioner is part of MSK Group which is engaged in the business of infrastructure development. The said MSK and Madhav Group of Gujarat including the petitioner were subjected to search action under Section 132 of the Act on 18.05.2024. The Respondent issued a notice dated 22.03.2025 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 18.05.2024 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 MSK and Madhav Group 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 22.03.2025 is issued under Section 148 of the Act after obtaining prior approval of Directorate General of Income Tax (Investigation), Ahmedabad. The Petitioner has challenged the said notice under Section 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 18.05.2024 i.e. during the Financial Year 2024-25. 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. Hence, 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