MANOJ KUMAR DHANDIA S/O LATE SHRI MEHAR CHAND DHANDIYA vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CW/10461/2021HC RajasthanRJHC02060967202108 September 2025Author: K.R. SHRIRAM,MANEESH SHARMA2 pages
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What did the High Court hold?

The Tribunal respectfully agreed with the findings of the co-ordinate bench in Shyam Sunder Khandelwal (supra). The Tribunal held that a notice under Section 148 of the Income Tax Act, 1961, could not have been issued by the Assessing Officer on the basis of material seized during a search; instead, the Assessing Officer ought to have issued a notice under Section 153C of the Act. The Tribunal rejected the Revenue's request for an adjournment sine die, stating that if the Revenue succeeds in the Apex Court in the SLP concerning Shyam Sunder Khandelwal, they can request the Apex Court for the revival of the notice. Accordingly, the impugned notice dated 23rd March 2020 was quashed and set aside. The Tribunal clarified that if the Revenue succeeds in the Apex Court, it may take such steps as advised, in accordance with law. No issue was expressly left undecided.

What were the facts?

The petitioner, Manoj Kumar Dhandia, is challenging a notice issued under Section 148 of the Income Tax Act, 1961, by the Assistant Commissioner of Income Tax. This notice was issued after a search was conducted, and the Assessing Officer relied on material seized during the search. The petitioner argues that the Assessing Officer should have issued a notice under Section 153C of the Act instead of Section 148. The respondent Revenue has challenged a similar order in a related case, Shyam Sunder Khandelwal Vs. Assistant Commissioner of Income-tax, before the Supreme Court via an SLP, for which notice has been issued after condoning delay. The Revenue requested an adjournment sine die pending the decision of the SLP.

What were the issues?

1. Whether a notice under Section 148 of the Income Tax Act, 1961, could be issued by the Assessing Officer on the basis of material seized during a search, or if a notice under Section 153C of the Act was mandatory. Assessee's Contention: The assessee argued that following a search, the Assessing Officer ought to have issued a notice under Section 153C of the Act, and a notice under Section 148 was not the correct procedure. The assessee relied on the judgment in Shyam Sunder Khandelwal Vs. Assistant Commissioner of Income-tax. Revenue's Contention: The Revenue argued that their challenge to the judgment in Shyam Sunder Khandelwal (supra) was pending before the Supreme Court via an SLP, and therefore, the present matter should be adjourned sine die until the SLP is decided. The Revenue did not directly address the merits of the Section 148 vs. Section 153C issue in this proceeding.

Which sections of the Income-tax Act were involved?

Section 148,Section 153C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:35839-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 10461/2021 Manoj Kumar Dhandia S/o Late Shri Mehar Chand Dhandiya, Aged About 55 Years, R/o 3958, Kgb Ka Rasta, Johari Bazar, Jaipur 302003 ----Petitioner Versus Assistant Commissioner Of Income Tax, Central Circle 4 Jaipur, Income Tax, New Central Revenue Building, Bhagwan Das Road, Jaipur, Rajasthan 302005 ----Respondent For Petitioner : Mr. Rajat Sharma with Mr. Saksham Pandey on behalf of Mr. Sanjay Jhanwar, Senior Advocate For Respondent : Mr. Siddharth Bapna with Mr. Sarvesh Jain, Mr. Meyhul Mittal & Mr. Rahul Kumar HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA

Order 08/09/2025

1.

Mr. Rajat Sharma states that the issue in this matter is squarely covered by a judgment of this Court in Shyam Sunder Khandelwal Vs. Assistant Commissioner of Income-tax1. 2. Mr. Rajat Sharma submitted that after a search was conducted, the Assessing Officer on the basis of material seized during the search, issued a notice under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’) on the assessee. The Court held that such a notice could not have been issued and Assessing Officer ought to have issued a notice under Section 153C of the Act. 1[2024] 161 taxmann.com 255 (Rajasthan)

[2025:RJ-JP:35839-DB] (2 of 2) [CW-10461/2021]

3.

We would respectfully agree with the findings in Shyam Sunder Khandelwal (supra).

4.

Mr. Bapna says that the Revenue has challenged the order in Shyam Sunder Khandelwal (supra) by way of SLP and notice has been issued after condoning delay. Mr. Bapna says, therefore, this matter be adjourned sine die, until the SLP is decided.

5.

We do not wish to follow the course suggested by Mr. Bapna because; (a) we agree with the findings of our Co-ordinate Bench in Shyam Sunder Khandelwal (supra); and (b) if at all the Revenue succeeds in the Apex Court, certainly Revenue can request the Apex Court for revival of the notice.

6.

Accordingly, impugned notice dated 23rd March 2020 is hereby quashed and set aside.

7.

Petition disposed.

8.

We clarify that in case Revenue succeeds in the Apex Court in Shyam Sunder Khandelwal (supra), it may take such steps, as advised, in accordance with law. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ N.GANDHI/RAJAT/9

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