Case Note & Summary
The dispute involved a writ petition challenging a reassessment notice issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2022-23. The petitioner had filed her return declaring income from sale of her 30% share in non-agricultural land, which was processed under Section 143(1). The respondent issued the impugned notice based on a search conducted at City Estate Management where a register was seized from broker Shri Pravinbhai Nagjibhai Bavadiya, containing an entry dated 11.08.2017 mentioning Survey No. 465 at Village Shela with a rate of Rs. 17,000 per square yard. The Assessing Officer calculated the land value at Rs. 10,42,90,961 based on this rate, whereas the petitioner had sold her share for Rs. 2 crores through a registered sale deed dated 13.08.2021, leading to suspicion of on-money payment. The petitioner contended that the seized document and broker's statement did not connect to her, and the procedure contradicted a previous court decision. The respondent argued that the search findings justified reopening. The court analyzed that the seized document referred to 2017, while the petitioner's transaction occurred in 2021 after the co-owner had gifted his 70% share to his son. The broker's statement did not name the petitioner, and there was no independent material linking her to the alleged on-money transaction. The court found that the revenue failed to establish a live link between the petitioner and the seized document beyond the survey number reference, and the intention to sell the entire plot in 2017 did not reconcile with the subsequent gifting in 2021. Consequently, the court quashed the impugned notice, holding it unsustainable due to lack of corroborative evidence.
Headnote
A) Income Tax Law - Reassessment Proceedings - Validity of Notice Under Section 148 - Income Tax Act, 1961, Section 148 - Petitioner challenged notice reopening assessment based on seized register and broker's statement - Court found no material linking petitioner to alleged on-money transaction beyond survey number reference - Held that absence of independent corroborative material and failure to reconcile seized document with subsequent gifting transaction rendered notice unsustainable (Paras 10-13). B) Evidence Law - Corroboration Requirement - Live Link Between Assessee and Alleged Income - Income Tax Act, 1961 - Revenue alleged undisclosed income from property sale based on seized register - Court examined broker's statement which did not name petitioner and found no live link established - Held that mere reference to survey number without naming assessee insufficient to sustain reassessment (Paras 8-10).
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Issue of Consideration: Whether the impugned notice under Section 148 of the Income Tax Act, 1961 for reopening assessment was validly issued based on the seized documents and statements
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Final Decision
Court quashed and set aside the impugned notice dated 30.03.2025, made rule absolute, no order as to costs
