VIDHYA INDUSTRIES PRIVATE LTD. vs. INCOME TAX OFFICERR, WARD-1, PALI

The instant writ petition under Article 226 of the Constitution of India has been preferred by the petitioner assailing the notice dated 26.03.2021 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’), whereby the assessment for Assessment Year 2014-15 was sought to be reopened, as well as the order dated 01.09.2021, whereby the objections preferred by the petitioner against initiation of the reassessment proceedings were rejected. (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (2 of 17) [CW-15897/2021]

The relevant facts, as emerging from the record, are that the petitioner filed its return of income for Assessment Year 2014-15 on 19.11.2014 under Section 139(1) of the Act of 1961, declaring an income of ₹22,84,090. The case of the petitioner was thereafter selected for scrutiny under CASS.

During the course of the scrutiny assessment, the Assessing Officer issued a notice dated 16.08.2016 under Section 142(1) of the Act of 1961, whereby, inter alia, information relating to the immovable property sold during the relevant financial year was specifically sought from the petitioner.

In response thereto, the petitioner submitted a detailed reply dated 24.10.2016, explaining the transaction in question and the long-term capital gain arising therefrom. The stand of the petitioner was that the actual sale consideration of the property was ₹24,50,000. It was further explained that an additional amount/value of ₹23,57,605 had been taken into account for stamp-duty purposes on account of the change in the name of the company from “Suncity Granites Pvt. Ltd.” to “Vidhya Industries Pvt. Ltd.” According to the petitioner, the said amount did not form part of the consideration received on sale of the property.

The petitioner further relied upon the communication dated 05.10.2016 issued by the Sub-Registrar in support of its explanation that the additional component was attributable to the change in the name of the company, which was treated as an assignment for the purposes of stamp duty, and was not part of the consideration received by the petitioner for transfer of the property. (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (3 of 17) [CW-15897/2021]

Upon completion of the scrutiny proceedings, an assessment order under Section 143(3) of the Act of 1961 was passed on 30.12.2016 at the returned income.

Subsequently, on 26.03.2021, the respondent issued the impugned notice under Section 148 of the Act of 1961 seeking to reopen the assessment. The petitioner, vide communication dated 16.04.2021, requested that its original return be treated as the return filed in response to the said notice and also sought a copy of the reasons recorded for reopening the assessment.

The reasons recorded were furnished to the petitioner vide communication dated 26.04.2021. The recorded reasons proceeded on the premise that the petitioner had sold an immovable property situated at F-202(A), Industrial Area, 4th Phase, Pali, for ₹24,50,000, whereas the DLC value adopted by the Sub-Registrar was ₹48,65,652. On this basis, the Assessing Officer formed the view that, by virtue of Section 50C of the Act of 1961, the figure of ₹48,65,652 ought to have been treated as the sale consideration and, consequently, income to the extent of ₹24,15,652 had escaped assessment.

The petitioner submitted detailed objections dated 06.05.2021 against the reopening of the assessment. The petitioner reiterated that ₹48,65,652 was not the actual sale consideration of the property and contended that the additional component included therein was attributable to stamp duty arising out of the earlier change in the name of the company. It was further asserted that this very issue had been specifically raised by the Assessing Officer during the original scrutiny proceedings (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (4 of 17) [CW-15897/2021] and had been duly responded to by the petitioner along with the relevant material.

The objections preferred by the petitioner came to be rejected by the respondent vide order dated 01.09.2021. Aggrieved thereby, the petitioner has approached this Hon'ble Court.

Learned counsel for the petitioner submits that the impugned reassessment proceedings are barred by limitation in view of the first proviso to Section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’). It is submitted that the assessment for Assessment Year 2014-15 had already been completed under Section 143(3) of the Act of 1961 on 30.12.2016, whereas the impugned notice under Section 148 of the Act of 1961 was issued on 26.03.2021, i.e. beyond a period of four years from the end of the relevant assessment year.

Learned counsel draws the attention of this Hon’ble Court to the first proviso to Section 147 of the Act of 1961, which reads as under: “Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (5 of 17) [CW-15897/2021] located outside India, chargeable to tax, has escaped assessment for any assessment year Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.”

Learned counsel submits that once an assessment under Section 143(3) of the Act of 1961 has been completed, reopening beyond four years from the end of the relevant assessment year can be resorted to only where income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. It is contended that no such failure can be attributed to the petitioner in the present case.

In support of the aforesaid contention, learned counsel draws the attention of this Hon’ble Court to the notice dated 16.08.2016 issued under Section 142(1) of the Act of 1961 during the original scrutiny proceedings, whereby a specific query was raised regarding the immovable property sold during the relevant financial year and the petitioner was called upon to furnish the relevant details along with computation of capital gain. It is submitted that the petitioner furnished a detailed reply dated 24.10.2016, disclosing the actual sale consideration of ₹24,50,000 and explaining the additional amount of ₹23,57,605 taken into account for stamp-duty purposes. The petitioner also furnished the relevant documents in support of its explanation.

Learned counsel submits that the petitioner had specifically explained that the additional amount of ₹23,57,605 was attributable to the change in the name of the company from “Suncity Granites Pvt. Ltd.” to “Vidhya Industries Pvt. Ltd.” and (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (6 of 17) [CW-15897/2021] had been taken into account by the Sub-Registrar for stamp-duty purposes. According to the petitioner, the said amount did not constitute consideration received by the petitioner upon sale of the property. It is submitted that the petitioner had thus disclosed all primary and material facts relating to the transaction during the original scrutiny assessment, whereafter the assessment under Section 143(3) of the Act of 1961 was completed on 30.12.2016 at the returned income.

Learned counsel contends that the very transaction and material which formed the subject matter of a specific query and explanation during the original assessment proceedings have subsequently been made the basis for reopening the assessment. The impugned reassessment proceedings, therefore, amount to reconsideration of the same material and are founded merely upon a change of opinion, which is impermissible in law.

Learned counsel further submits that the reasons recorded for reopening proceed on a factually incorrect premise that the DLC value of the property sold by the petitioner was ₹48,65,652. According to the petitioner, the actual sale consideration was ₹24,50,000, while the additional component of ₹23,57,605 was attributable to the stamp-duty implications arising from the earlier (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (7 of 17) [CW-15897/2021] Tax & Anr.; D.B. Civil Writ Petition No. 16512/2018, the relevant portion is herein below:

Learned counsel also cited judgment dated 10.10.2022 passed by Hon’ble the Supreme Court in the case of Assistant Commissioner of Income Tax Vs. CEAT Ltd; SLP Appeal (C) No.12643 of 2021, reported in (2023) 146 taxmann.com 108 (SC). The relevant portion is reproduced hereinunder:- “2. It is not in dispute that the assessment was sought to be re-opened beyond four years. Therefore, all the conditions under Section 148 of the Income Tax Act for re-opening the assessment beyond four years are required to be satisfied. Having gone through the reasons recorded for re-opening, we are of the opinion that the conditions precedent for reopening of the assessment beyond four years are not (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (8 of 17) [CW-15897/2021] satisfied. The re-assessment was on change of opinion. There are no allegations of suppression of material fact. Under the circumstances, no error has been committed by the High Court in setting aside the re-opening notice under Section 148 of the Income Tax Act. We are in complete agreement with the view taken by the High Court. The Special Leave Petition stands dismissed.”

Learned counsel further cited judgment dated 22.12.2021 passed by High Court of Bombay in the case of CEAT Ltd. Vs. Assistant Commissioner of Income Tax; Writ Petition No.3363 of 2019, reported in (2023) 146 taxmann.com 107 (Bombay). The relevant portion is reproduced hereinunder:- “2. We have considered the reasons annexed at Exhibit 'F' to the petition. In our view, respondent has miserably failed to disclose any facts, material or otherwise which has not been disclosed. In our view, first of all reasons indicated change of opinion which is impermissible in law and secondly, the entire basis for re-opening is due to mistake of the Assessing Officer that resulted in under assessment.

The Hon'ble Apex Court in Indian & Eastern Newspaper Society vs. CIT(1972) 2 Taxman 197/119 ITR 996/12 CTR 190 has held that an error discovered on a reconsideration of the same material (and no more) does not give power to the Assessing Officer to re-open the assessment. Paragraph no. 14 of the said judgment read as under :

Now, in the case before us, the Income-tax Officer had, when he made the original assessment, considered the provisions of Sections 9 and 10. Any different view taken by him afterwards on application of those provisions would amount to a change of opinion on material already considered by him. The Revenue contends that it is open to him to do so, and on that basis to reopen the assessment under Section 147 (b). Reliance is placed on Kalyanji Mavji and Co. v. CIT, (1976) 102 ITR 287, where a Bench of learned Judges of this Court observed that a case where income had escaped assessment due to the "oversight, inadvertence or mistake" of the Income-tax Officer must fall within Section 34 (1) (b) of the Indian Income Tax Act, 1922. It appears to us, with respect, that the proposition is stated too widely and travels further than the statute warrants insofar as it can be said to lay down that if, on reappraising the material (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (9 of 17) [CW-15897/2021] considered by him during the original assessment, the ITO discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessment. In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this Court in Maharaj Kamal Kumar Singh's case (supra), A. Raman and Co.'s case (supra) and Bankipur Club Ltd. v. CIT, (1971) 82 ITR 831, and we do not believe that the law has since taken a different course. Any observations in Kalyanji Mavji's case (supra) suggesting the contrary do not, we say with taxmann.com468/278 Taxman 9/432 ITR 212. 5. Petition therefore is allowed in terms of prayer clause - (A) which reads as under : (A) that this Hon'ble Court may be pleased to issue a writ of certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records of the case leading to the issue of the impugned notice and passing of the impugned order and after going through the same, and examining the question of legality thereof, quash, cancel and set aside the impugned notice (Exhibit - C) dated 27 th March, 2019 and the impugned order (Exhibit - H) dated 31st October, 2019.” 3.10.Learned counsel also cited judgment dated 06.02.2025 passed by Division Bench of this Court in the case of Rajasthan Marudhara Gramin Bank Vs. Union of India; D.B. Civil Writ Petition No. 6841 of 2015. The relevant portion is reproduced hereinunder:- “14. This Court also observes that the proviso to Section 147 of the Act of 1961, has been incorporated with a legislative intent that in cases where an assessment is sought to be reopened beyond the prescribed limitation period of four years, a stricter threshold must be applied. This higher standard is essential for determining whether the material in question constitutes a failure to disclose income, thereby justifying (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (10 of 17) [CW-15897/2021] the invocation of reassessment proceedings on the grounds of escaped assessment.

This Court is also conscious of the settled legal proposition that the provisions contained in the taxation statutes are to be interpreted strictly and therefore, an assessment can be re-opened after the statutory limitation of 4 years, as per Section147 of the Act of 1961, only when there has been a failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. However, in the instant case, there has been no such failure on the part of the assessee, so as warrant invocation of Section 147 of the Act of1961. 16. This Court further observes that it is essential to recognize that when the Assessing Officer, during the course of the original assessment proceedings, has made determination based on the material facts duly submitted by the assessee, any subsequent change in opinion, premised merely on the assumption that the claims made by the petitioner remain perpetually open to verification and that no finality is attached to the assessment order, would not only contravene the legislative intent of the statute but would also confer unfettered and arbitrary powers upon the Assessing Authority. Such an interpretation could potentially result in the misuse of authority, thereby subjecting genuine taxpayers to undue hardship and unwarranted litigation.

This Court further notes that the respondent No.2 did not duly consider and appreciate the objections raised by the petitioner in the right perspective before summarily rejecting the same vide the impugned communication dated 12.05.2015. 18. Thus, this Court holds that the reopening of the concluded assessment after a lapse of four years, merely on the basis of conjectures and surmises, by issuance of notice under Section 148 is violative of the mandate of law as contained in Section 147 of the Act of 1961.” 3.11.He further cited judgment dated 09.09.2024 passed by Division Bench of this Court in the case of Shiv Lal Soni Vs. Union of India & Anr; D.B. Civil Writ Petition No.9217 of 2015. The relevant portion is reproduced hereinunder:- (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (11 of 17) [CW-15897/2021] “14. The second ground raised by the assessee is that there is no proper reason which led to issuance of notice dated 26.03.2015. The reasons for the issuance of notice were recorded under order dated 27.02.2015 (Annexure- 5). A glance of the reasons under Annexure-5 discloses that there were no fresh facts received which could not be made available earlier on account of concealment of any material facts by the assessee and it appears to be a change of opinion on re-appreciation of evidence or material, which facts were already furnished by the assessee during his regular assessment process. Therefore, on this count also, the writ petition is liable to be allowed.” 3.12.On the strength of the aforesaid submissions and judicial pronouncements, learned counsel for the petitioner submits that the petitioner had made a full and true disclosure of all material facts concerning the transaction during the original scrutiny assessment. The impugned notice, having been issued beyond four years from the end of the relevant assessment year without there being any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment, is barred by the first proviso to Section 147 of the Act of 1961. It is further submitted that the reassessment is founded upon reconsideration of material already available with the Assessing Officer and, therefore, amounts to an impermissible change of opinion. The impugned notice dated 26.03.2021 and the consequential order dated 01.09.2021 rejecting the petitioner’s objections thus deserve to be quashed and set aside.

Per contra, learned counsel for the respondent opposes the writ petition and submits that the reassessment proceedings have been validly initiated under Sections 147 and 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’). It is (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (12 of 17) [CW-15897/2021] submitted that the petitioner had failed to fully and truly disclose all material facts necessary for its assessment.

Learned counsel submits that the petitioner had disclosed the sale consideration of the immovable property situated at F- 202(A), Industrial Area, 4th Phase, Pali, as ₹24,50,000, whereas the DLC value adopted by the Sub-Registrar was ₹48,65,652. Thus, according to the respondent, in view of Section 50C of the Act of 1961, income to the extent of ₹24,15,652 had escaped assessment. It is further submitted that the said issue was not considered during the original assessment under Section 143(3) of the Act of 1961 and, therefore, the reassessment proceedings do not amount to a mere change of opinion.

In support of the aforesaid submissions, learned counsel for the respondent has referred to paragraph Nos. 2, 6 and 8 of Annexure-6 which reads as follows:

Learned counsel for the respondent, therefore, submits that the Assessing Officer had validly formed a reason to believe that income chargeable to tax had escaped assessment and that the jurisdictional requirements for reopening the assessment stood satisfied. Accordingly, dismissal of the writ petition is prayed for.

Heard learned counsel for the parties and perused the material available on record.

The issue before this Court is whether the assessment for Assessment Year 2014-15, which was completed under Section 143(3) of the Act of 1961, could have been reopened beyond a period of four years from the end of the relevant assessment year.

The record reflects that during the original scrutiny proceedings, the Assessing Officer issued a notice dated 16.08.2016 under Section 142(1) of the Act of 1961, specifically calling upon the petitioner to furnish details regarding the immovable property sold during the relevant financial year, along with the computation of capital gains. In response thereto, the petitioner, vide reply dated 24.10.2016, disclosed the sale consideration of the property as ₹24,50,000 and explained that the additional amount of ₹23,57,605 taken into account for stamp-duty purposes was attributable to the change in the name of the company from “Suncity Granites Pvt. Ltd.” to “Vidhya Industries Pvt. Ltd.” and did not form part of the actual sale consideration. Thereafter, the assessment was completed under Section 143(3) of the Act of 1961 on 30.12.2016 at the returned income. (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (15 of 17) [CW-15897/2021]

The reassessment proceedings have been initiated on the premise that the DLC value adopted by the Sub-Registrar was ₹48,65,652, whereas the petitioner had disclosed the sale consideration as ₹24,50,000. On this basis, the Assessing Officer formed the belief that Section 50C of the Act of 1961 was attracted and that income to the extent of ₹24,15,652 had escaped assessment.

This Court finds that the transaction forming the basis of the reassessment proceedings was specifically the subject matter of a query during the original scrutiny proceedings. The petitioner had furnished its explanation regarding the sale consideration as well as the additional amount taken into account for stamp-duty purposes. Therefore, it cannot be said that the primary facts relating to the transaction were not disclosed by the petitioner during the original assessment proceedings.

Whether the explanation furnished by the petitioner was acceptable or whether Section 50C of the Act of 1961 was applicable to the transaction is distinct from the jurisdictional requirement for reopening an assessment beyond four years. In terms of the first proviso to Section 147 of the Act of 1961, where an assessment has been completed under Section 143(3), reopening beyond four years from the end of the relevant assessment year is permissible only where the escapement of income is attributable to the failure of the assessee to disclose fully and truly all material facts necessary for its assessment.

In the present case, the impugned notice under Section 148 was issued on 26.03.2021, beyond four years from the end of Assessment Year 2014-15. Though the reasons recorded for (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (16 of 17) [CW-15897/2021] reopening state that the petitioner had failed to fully and truly disclose all material facts and that the issue had not been examined during the original assessment, the record shows that the Assessing Officer had specifically sought details regarding the sale of the property and the petitioner had furnished its explanation in response thereto. Significantly, the reasons recorded do not identify any specific material fact which was withheld by the petitioner during the original assessment proceedings.

Thus, the reassessment proceedings are founded upon the same transaction and material which were already disclosed during the original scrutiny proceedings. A different view subsequently taken on such material cannot, in the absence of any failure on the part of the petitioner to disclose fully and truly all material facts, justify reopening of the assessment beyond the statutory period of four years.

The judgments relied upon by learned counsel for the petitioner also reiterate the settled position that where an assessment completed under Section 143(3) of the Act of 1961 is sought to be reopened beyond four years, the statutory requirement of failure on the part of the assessee to disclose fully and truly all material facts must necessarily be satisfied. Reappraisal of material already available during the original assessment proceedings cannot, by itself, furnish a valid basis for reopening beyond the prescribed period.

In view of the aforesaid, this Court finds that the jurisdictional requirement stipulated under the first proviso to Section 147 of the Act of 1961 for reopening the assessment (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM) [2026:RJ-JP:31330-DB] (17 of 17) [CW-15897/2021] beyond four years is not satisfied in the present case. Consequently, the impugned reassessment proceedings cannot be sustained.

Accordingly, the present writ petition is allowed.

Further proceedings in pursuance to notice dated 26.03.2021 issued under Section 148 of the Act of 1961 and notice dated 01.09.2021 are quashed and set aside.

All pending application(s) stand disposed of. (PRAVEER BHATNAGAR),J (DR.PUSHPENDRA SINGH BHATI),J 31/Devanshi Upadhyay/659 Powered by TCPDF (www.tcpdf.org) (Uploaded on 23/07/2026 at 12:35:39 PM) (Downloaded on 28/10/2026 at 12:44:31 AM)