THE COMMISSIONER OF INCOME TAX vs. KAMLESH DAMJIBHAI YADAV

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TAXAP/627/2007HC GujaratGJHC24040540200712 June 2026Bench: HONOURABLE MR. JUSTICE BHARGAV D. KARIA,HONOURABLE MR. JUSTICE PRANAV TRIVEDI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court recalled its order dated August 19, 2016, passed in Tax Appeal No. 627 of 2007, and restored the appeal to the file. The Court found that the fact that the restraint order under Section 132(3) was passed in the name of all four assessees was not considered in the previous order. This oversight led to the decision on the limitation issue being made in favour of the assessee, and consequently, other grounds of appeal were not considered on merits. The Court allowed the Miscellaneous Civil Application, holding that the previous order was passed without considering a material fact. Subsequently, in the restored Tax Appeal, the Revenue submitted that the appeal was not maintainable due to a low tax effect, citing Circular No. 9 of 2024. The Court disposed of the Tax Appeal on the ground of low tax effect, with liberty to revive in case of difficulty. The ratio is that an order passed without considering a material fact can be recalled, and appeals can be disposed of based on updated circulars regarding tax effect.

What were the facts?

The Commissioner of Income Tax (Revenue) filed a Tax Appeal (No. 627 of 2007) against an order concerning Kamlesh Damjibhai Yadav (Assessee). The appeal was admitted on seven questions. However, a High Court order dated August 19, 2016, disposed of the appeal by deciding only two questions. Question A was decided in favour of the Revenue, and Question B, concerning the limitation for block assessment, was decided against the Revenue. The other questions were not decided on merits. The Revenue filed a Miscellaneous Civil Application (OJ) No. 1 of 2017 seeking to review/recall the order dated August 19, 2016, and restore the Tax Appeal. The Revenue contended that a crucial fact regarding a restraint order under Section 132(3) of the Income Tax Act, 1961, issued in the name of all four assessees, was not considered by the Court.

What were the issues?

1. Whether the High Court's order dated August 19, 2016, disposing of Tax Appeal No. 627 of 2007 by deciding only two out of seven admitted questions was erroneous, and if so, should it be recalled and the appeal restored for further hearing? (Mixed question of law and fact, concerning procedural fairness and proper adjudication). Assessee's Contention (via Revenue's MCA application): The Revenue argued that the restraint order dated July 17, 2002, under Section 132(3) was issued in the name of all four persons, including the assessee. The High Court had previously held that since the restraint order was in the name of only one assessee, the search concluded on July 17, 2002, for other assessees. The Revenue contended that if the restraint order was in the name of all assessees, the limitation period for passing the assessment order would be extended. Therefore, the previous order, which decided the limitation issue against the Revenue based on a factual oversight, should be recalled. Revenue's Contention (for the Tax Appeal after restoration): The Revenue submitted that the tax effect in the appeal was less than Rs. 2 crores, and as per Circular No. 9 of 2024 dated September 17, 2024, the Tax Appeal would not be maintainable.

Which sections of the Income-tax Act were involved?

Section 132(3)

AI-generated summary — verify with the full judgment below

C/TAXAP/627/2007 ORDER DATED: 12/06/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 627 of 2007 With MISC. CIVIL APPLICATION (OJ) NO. 1 of 2017 In R/TAX APPEAL NO. 627 of 2007 ========================================================== THE COMMISSIONER OF INCOME TAX Versus KAMLESH DAMJIBHAI YADAV ========================================================== Appearance: MR. RUTVIJ PATEL, SENIOR STANDING COUNSEL for the Appellant(s) No. 1 MR TUSHAR P HEMANI(2790) for the Opponent(s) No. 1 MS VAIBHAVI K PARIKH(3238) for the Opponent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI

Date : 12/06/2026

ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Heard learned Senior Standing Counsel Mr.Rutvij Patel for the appellant – applicant and learned advocate Ms.Vaibhavi Parikh for the respondent. Learned Senior Standing Counsel Mr.Rutvij Patel has submitted that he has instructions to appear for the applicant and seeks permission to file his appearance. Permission is granted. ORDER IN MCA (OJ) No. 1 of 2017. 1 This application is filed with the following prayers: “B. That this Hon’ble Court be pleased to review/recall the order dated 19.08.2016 passed in Tax Appeal No. 627 of 2007 and be restored / recall Tax Appeal No. 627 of 2007 for further hearing.” Page 1 of 4

C/TAXAP/627/2007 ORDER DATED: 12/06/2026 2 Learned Senior Standing Counsel Mr.Rutvij Patel submitted that the Tax Appeal No.627 of 2007 was admitted raising seven questions, however, the tax appeal was disposed of by this Court vide order dated 19.08.2016 deciding only two questions and other questions were not decided on merits. The issue raised in question No.A was decided in favour of the revenue and the issue raised in the form of question No.B which was regarding the date of limitation for completion of the block assessment was decided against the revenue. The other questions were not decided. 3 It was pointed out that upon receipt of the certified copy by the applicant and upon verification of the record, it transpired that the restraint order dated 17.07.2002 passed under Section 132(3) of the Income Tax Act, 1961, was issued in name of all four persons, including the assessee and all four assessee had been ordered not to remove or part with or otherwise deal with the articles or things mentioned therein without previous permission of the authorized officer. It was pointed out that this Court held that since the restraint order was in the name of only one assessee, the search got concluded on 17.07.2002 for other assessee’s. It was Page 2 of 4

C/TAXAP/627/2007 ORDER DATED: 12/06/2026 therefore submitted that in view of the fact that the restraint order was issued in the name of all assessee’s, the limitation for passing the assessment order would get extended. 4 In view of the above facts, it was prayed that the impugned order dated 19.08.2016 so far as the Tax Appeal No.627 of 2007 is concerned, may be recalled. 5 Considering the above facts, it appears that the fact that the restraint order was passed in name of all the four assessee was not considered by this Court and therefore, by passing the common order dated 19.08.2016, only two grounds of appeals were decided, one of them being limitation and as the same was decided in favour of the assessee, the other grounds were not considered on merits. 6 In view of the above facts, we recall the order dated 19.08.2016 passed in Tax Appeal No. 627 of 2007 and restore the Tax Appeal No.627 of 2007 to file. The application is accordingly allowed and stands disposed of. Page 3 of 4

C/TAXAP/627/2007 ORDER DATED: 12/06/2026 ORDER IN TAX APPEAL NO. 627 of 2007. 1 In view of the order of even date passed in MCA (OJ) No. 1 of 2017, this Tax Appeal is ordered to be restored to file. 2 Learned Senior Standing Counsel Mr.Rutvij Patel for the appellant submitted that the tax effect in this appeal is less than Rs.2 crores and as per the Circular No.9 of 2024 dated 17.09.2024, this Tax Appeal would not be maintainable. 3 In view of the above statement, the Tax Appeal is disposed of on the ground of low tax effect with a liberty to revive in case of difficulty. (BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) BIMAL Page 4 of 4 Original copy of this order has been signed by the Hon'ble Judges. Digitally signed by: BIMAL B CHAKRAVARTY(HC01089), PRIVATE SECRETARY, at High Court of Gujarat on 17/06/2026 17:58:30

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