VAIBHAV GLOBAL LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CW/12529/2025HC RajasthanRJHC02068538202522 August 2025Bench: SANJEEV PRAKASH SHARMA,SANJEET PUROHIT3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition, holding that there were no reasons to interfere with the notice issued to the petitioner under Section 153C of the Income Tax Act, 1961. The Court noted that the petitioner had previously challenged a notice under Section 148 for Assessment Year 2011-2012, and while that was quashed, the High Court had granted liberty to the revenue authorities to proceed against the petitioner in accordance with law. The Court found that the current notice under Section 153C was a consequence of this liberty. The Court also observed that the satisfaction note forming the basis for initiating proceedings under Section 153C was present. The petitioner was granted liberty to raise all necessary arguments and defenses before the assessing authorities, who were directed to pass an appropriate speaking order. The ratio decidendi is that once liberty is granted to proceed according to law, subsequent proceedings under a different section, if validly initiated based on discovered material, are not to be quashed by the High Court, and the assessee should pursue their remedies before the assessing authorities.

What were the facts?

The petitioner, Vaibhav Global Limited, is challenging a notice issued under Section 153C of the Income Tax Act, 1961, dated February 4, 2025, pertaining to Assessment Year 2011-2012. The notice was issued following a search conducted in relation to Ramesh Chand Maheshwari, where documents belonging to Dinesh Kumar Khatoria were found. These documents allegedly indicated cash loans paid by Khatoria to various persons. The petitioner had previously challenged a notice under Section 148 for the same assessment year, which was quashed by the High Court on March 19, 2024, with liberty to the revenue to proceed according to law. The current notice under Section 153C is stated to be a consequence of this liberty granted. The amount in dispute, an undisclosed cash loan, is stated to be Rs. 3,55,00,000/-.

What were the issues?

1. Whether the notice issued to the petitioner under Section 153C of the Income Tax Act, 1961, for Assessment Year 2011-2012 is valid, considering the petitioner's previous writ petition challenging a Section 148 notice for the same year was quashed with liberty to the revenue to proceed. Assessee's Contentions: The petitioner argues that the notice under Section 153C does not specify the amount in dispute and that the search conducted did not directly name the petitioner. They rely on the fact that their earlier writ petition challenging a Section 148 notice for AY 2011-2012 was quashed, implying that the revenue should not be able to initiate fresh proceedings under a different section based on the same underlying facts. They also implicitly challenge the basis of the Section 153C notice, which stems from documents found during a search related to another individual. Revenue's Contentions: The revenue contends that the liberty granted by the High Court in the earlier writ petition to proceed according to law permits the issuance of the Section 153C notice. They rely on the satisfaction note which forms the basis for initiating proceedings under Section 153C, indicating that undisclosed cash loans of Rs. 3,55,00,000/- were revealed during the search of Ramesh Chand Maheshwari, with entries pertaining to Dinesh Kumar Khatoria. They also refer to the Division Bench judgment in Shyam Sunder Khandelwal & Ors. Vs. Assistant Commissioner of Income Tax & Ors. (2024 (4) TMI 196) as a basis for proceeding.

Which sections of the Income-tax Act were involved?

Section 153C,Section 148,Section 131

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:33366-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 12529/2025 Vaibhav Global Limited, E-69, Epip Sitapura Industrial Area, Jaipur Through Its Authorized Representative Mr. Prateek Jain. ----Petitioner Versus Assistant Commissioner Of Income Tax, Central Circle-4, Jaipur Having Its Address At 4Th Floor, Jeevan Nidhi-2, Lic Building, Ambedkar Circle, Jaipur. ----Respondent For Petitioner(s) : Mr. Siddharth Ranka, Adv. Mr. Rohan Chatter, Adv. Ms. Satvika Jha, Adv. For Respondent(s) : Mr. Siddharth Bapna, Adv. Mr. Rahul Kumar, Adv. HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJEET PUROHIT Order 22/08/2025 1. This matter is related to Dinesh Kumar Khatoria Vs. The Assistant Commissioner Of Income Tax in compliance of which this Court has passed the following order:- “1.The challenge in this petition is to the notice issued to the petitioner under Section 153C of the Income Tax Act, 1961 (for short, "IT Act) dated 04.02.2025 with regard to Assessment Year 2011-2012. 2. Learned counsel for the petitioner submits that in the notice impugned, neither amount has been mentioned nor in the search conducted name of the petitioner has been mentioned, however, from the perusal of the satisfaction note for initiating proceedings under Section 153C with reference to the petitioner for the year 2011-2012, as conveyed to the petitioner, it is apparent that Dinesh Kumar Khatoria's

[2025:RJ-JP:33366-DB] (2 of 3) [CW-12529/2025] documents were received in pen drive. Entries pertaining to Dinesh Kumar Khatoria, who paid cash loans to various persons, were found during the search proceedings relating to Ramesh Chand Maheshwari under Section 131 of the IT Act. We also noticed that the petitioner had earlier preferred the writ petition Nos.4490/2022 and 4635/2022 before this Court challenging the notice issued to him under Section 148 of the IT Act and this Court quashed the proceedings under Section 148 of the IT Act vide order dated 19.03.2024, with liberty to the Authorities to proceed against the writ petitioner in accordance with law. Since, this Court had granted permission to the respondent-Tax Authorities to proceed, the challenge on the ground of limitation would also not arise as the order was passed by this Court granting liberty to the authorities to proceed. 3. In view thereto, the notice issued to the petitioner with regard to undisclosed cash

loans

amount

of Rs.3,55,00,000/-,

which

remains undisclosed, has to be answered by the petitioner to the Authorities. We, therefore, do not find any reasons to interfere with the notice issued to the petitioner under Section 153C. The petitioner is free to take up all the necessary arguments and defense available to him before the Authorities, who would be required to pass an appropriate speaking order. 4. With the said observations, the writ petition is dismissed accordingly. 5. Pending application(s), if any, also stands disposed of.” 2. The notice of the petitioner is the consequence of the judgment passed by Division Bench of this Court in Shyam Sunder Khandelwal & Ors. Vs. Assistant Commissioner of Income Tax & Ors.: reported in 2024 (4) TMI 196 (D.B. Civil Writ Petition No. 18363/2019) decided on 19.03.2024, where Division Bench held as under:- “40. In view of above discussion the notices issued under Section 148 and the impugned orders are quashed. However, the respondents

[2025:RJ-JP:33366-DB] (3 of 3) [CW-12529/2025] shall be at liberty to proceed against the petitioners in accordance with law.” 3. It is noticed that the said judgment was assailed before the Hon’ble Supreme Court and in the meanwhile taking cue from the observations made by Division Bench, the Revenue has initiated proceedings under Section 153C of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act of 1961) against the petitioner. Since we find that so far as in the earlier writ petitions observations were accepted by the assessee, the notice issued to the petitioner for undisclosed income, as revealed while conducting search of another person, and there being a satisfaction note which has been made a basis for initiating proceedings under Section 153C of the Act of 1961, we are not inclined in any manner to interfere with the action, as taken by the Revenue. 4. With the aforesaid observations, the present civil writ petition is dismissed. However, all the grounds are open for the petitioner to be taken up before the authorities. 5. All pending application(s), if any, stand disposed of. (SANJEET PUROHIT),J (SANJEEV PRAKASH SHARMA),J HEENA/MAHIMA/13

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