2026 (4) TMI 922

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....e Notice dated 31.03.2025 issued under Section 148 of the Income Tax Act, 1961 (for short "the IT Act") for the Assessment Year 2021-22, seeking reassessment of income and has further prayed to direct the respondent not to proceed further or pass final order under Section 143(3) read with Section 147 of the IT Act. 4. The petitioner is an individual and had filed his return of income for A.Y. 2021-22 on 30.09.2021 declaring total income at Rs.33,49,290/-. An information was received that search action under Section 132 of the IT Act was conducted in the case of Bsafal Group, City Estate Group, City Estate Management India and City Procon Realtors Pvt. Ltd. and several incriminating documents were found and seized. On the basis of the said information, the respondent issued notice under Section 148 of the IT Act dated 31.03.2025 after taking approval from Principal Commissioner of Income Tax, Ahmedabad-3 alleging that income of Rs. 1,23,23,257/- has escaped assessment. The petitioner filed objections on 26.06.2025 which were disposed of by respondent on 08.12.2025. 5. During the pendency of petition, the respondent had passed reassessment order under section 147 of the IT Act ....

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....from the basis of the extract of the inquiry register, the satisfaction note was recorded by the Assessing Officer to the extent that Bsafal Group has accepted on money over and above the documented price as per the sale deed which is merely on presumption roping in the petitioner who had purchased the land vide purchase deed dated 08.03.2021. Thus, it is submitted that the assessment is sought to be reopened on the basis of conjunctures and surmises and hence the impugned notice may be quashed and set aside. 8. In support of his submissions, learned advocate Mr.Vora has placed reliance on the judgment and order dated 24.11.2025 passed in Special Civil Application No.4162 of 2023 and allied matters. SUBMISSIONS ON BEHALF OF RESPONDENT : 9. In response to the aforesaid submissions, learned Senior Standing Counsel Mr. Aaditya D. Bhatt has submitted that on the date mentioned the seized documents, the rates mentioned therein is far in excess of the rate at which the petitioner had purchased the property. It is further submitted that looking to the huge difference in the prices itself suggests that the Assessing Officer is of the opinion that the income has escaped assessment.....

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....d the land dealing, by paying the on-money. Thus, it is urged that, at this stage, the Court may not interfere with the reopening of the assessment. ANALYSIS AND CONCLUSION : 12. We have heard the learned advocates appearing for the respective parties, at length and also perused the documents as pointed out by them. 13. A search under Section 132 of the IT Act was conducted on Bsafal Group and City Estate Group on 28.09.2021 and during the search, it is the case of the revenue that incriminating documents and digital data were seized. Post search, a statement of one Shri Pravin Nagjibhai Bavadia was recorded after he was confronted with the documents found and seized from the premise of the City Estate Management, which is a broker, dealing with land deals in the city of Ahmedabad. Statement under Section 131 of the IT Act of Shri Pravin Nagjibhai Bavadiya are incorporated in the impugned notice. A specific question No. 14, was asked to him with regard to the documents found during the search and in response, he has submitted that 'I confirm that the documents were found and seized from the premises of the propriety entity City Estate Management' It is further responded by....

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....e-opening the assessment has to establish a live link of the assessee on the basis of seized material only. The expression "relates to" and "pertains to" used in Clause(iv) to Explanation 2 to Section 148 of the IT Act cannot be used in vacuum. The revenue after the seizure of incriminating material is under an obligation to analyze such material, in light of attendant circumstances and record relevancy and a prima facie opinion linking such material establishing escapement of income at the hands of the assessee. The information which is derived from the incriminating material in the instant case, does not establish live-link. The information is absolutely vague and unspecific and the rate mentioned in the chit for 3 vigha on 04.10.2020 is sought to be imposed upon the petitioner to the sale deed registered on 08.03.2021. The statement of Shri Bavadiya does not mention the name of the petitioner. There is no link of the petitioner with ' Kanu Desai' whose name is found in the loose paper. All these aspects are very relevant, and are required to be examined before roping the petitioner in re-assessment. 16. We are conscious about the legal precedent as set out by the Supreme Cour....