Gujarat HC: Income Tax Reassessment Beyond 10 Years Invalid Even After Search

Gujarat HC: Income Tax Reassessment Beyond 10 Years Invalid Even After Search

Jignesh Ramniklal Doshi, carrying on real estate and financing business as Mahavir Developers, filed his return for AY 2012-13, which was originally assessed under Section 143(3) and later reassessed. A search under Section 132 was conducted on 11.11.2022 in the Khavda Group, during which documents relating to the petitioner were seized.

A notice under Section 148 dated 31.03.2023 was issued, and reassessment was completed on 18.05.2025, making additions under Sections 69C and for alleged undisclosed income. The petitioner challenged the reopening on the grounds of limitation.

Main Issue: Whether AY 2012-13 could be reopened under Section 148 pursuant to a search conducted in FY 2022-23, despite falling beyond the ten-year limitation prescribed for search-based reassessments.

HC’s Decision: The Hon’ble High Court allowed the writ petition and quashed the notice issued under Section 148 as well as the consequential reassessment order. The Court held that where reassessment proceedings arise out of a search, the limitation regime under Sections 153A/153C applies by virtue of the first proviso to Section 149.

For a search conducted on 11.11.2022 (FY 2022-23), reopening is permissible only up to AY 2014-15. Since AY 2012-13 lay outside the ten-year block, the reassessment was held to be without jurisdiction.

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