Gujarat High Court: Bhavnaben Darshanbhai Patel v. Income Tax Officer [SCA No. 780 of 2026]
The Hon’ble High Court quashed the reassessment notices ruling that the IT Department cannot reopen completed assessments based on vague third-party documents that have no clear link to the person concerned. The case arose after search under section 132 in the cases on B Safal Real Estate Group and City Estate Management India. The Revenue relied on entries in the register indicating unaccounted consideration in relation to land transaction linked to the Assessee. The Assessee contended that the seized enquiry register was a third-party document containing only tentative property details, did not bear her name. The revenue argued that expressions “pertains to” and “relates to” under Explanation 2 to Section 148 have a wide ambit and that at the stage of reopening, only prima facie material is required. Rejecting the Revenue’s stand, the Court held that even for reopening, there must exist a “live link” between the seized material and the assessee. The Court found that the loose paper relied upon by the Department merely contained general property details without any reference to the petitioner. The Court observed that such vague and non-specific material, especially when dated subsequent to the actual registered transaction, cannot justify an inference of unaccounted payment. Accordingly, Court allowed the Writ Petitions.
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