High Court Quashes Reopening of Assessment Based on Conjectures and Unverified Search Material

The petitioner, Vijaykumar Jitendrakumar Trivedi, along with family members, had jointly purchased two parcels of land in 2018-19. The Income Tax Department initiated reassessment proceedings for the Assessment Year 2019-20 based on information originating from a search and seizure operation conducted on third parties.

The petitioner challenged the notice issued under Section 148A(b) and the later order under Section 148A(d) of the Income Tax Act, 1961, contending that the reopening was based on mere suspicion without any direct link to him.

Main Issue: Whether the reopening of assessment under Section 148 of the Income Tax Act was valid when it was based on unverified third-party search material and a complaint whose author was never summoned or examined.

HC’s Decision: The Hon’ble High Court allowed the writ petition and quashed the impugned notices and assessment orders. The Court observed that the Assessing Officer failed to summon the complaint that formed the basis of the proceedings, forming sufficient ground to set aside the reopening. Also, the statements of the petitioner and other involved parties did not reveal any cash transactions, and the image of the receipt found on the mobile phone did not indicate the receipt of any amount by the petitioner or his son.

The Court concluded that the reopening was premised on conjectures and surmises rather than a direct link established through the search material.

To Read Full Judgment, Download PDF Given Below