ASHA MAHESHWARI, WIFE OF RAMESH CHANDRA MAHESHWARI vs. INCOME TAX OFFICER

PDF · subscribers
CW/13948/2024HC RajasthanRJHC02071419202421 October 2024Bench: MANINDRA MOHAN SHRIVASTAVA,ASHUTOSH KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue of sufficiency of material for reopening assessment under Section 148 of the Income Tax Act, 1961, is not a matter of jurisdiction but rather an assessment of the material on record. The Court found that the relevancy of the material was not in dispute. Therefore, the sufficiency of the material should not be gone into by the Writ Court at the stage of reopening when no addition has been made, and the reopening is solely based on the disclosure of certain material. The Court granted the assessees liberty to raise all available grounds during the reassessment proceedings to satisfy the authority that no addition is warranted. Consequently, the writ petitions were dismissed with this liberty.

What were the facts?

These three writ petitions have been filed by Asha Maheshwari, Varenya Rameshchandra Maheshwari, and Ramesh Chandra Maheshwari. They are challenging notices issued under Section 148 of the Income Tax Act, 1961. The notices were issued by different Income Tax Officers for various assessment years. The basis for reopening the assessments is alleged to be material found during a search conducted on a builder with whom the petitioners had entered into a transaction for the purchase of a flat. The revenue contends that the builder's disclosure indicated a higher property rate than what was recorded in the sale deed, suggesting escapement of income. The petitioners dispute the genuineness of the sale transaction and the basis for re-evaluation of the rate.

What were the issues?

1. Whether the material allegedly found during a search on a third party (the builder) is sufficient to invoke the power under Section 148 of the Income Tax Act, 1961, for reassessment, when the contents of the sale deed do not prima facie support a case of income escapement? (Question of law and fact, concerning Section 148 of the Act). Assessee's Contention: The material relied upon by the Assessing Officer is not sufficient to invoke Section 148 as the sale deed does not prima facie indicate any escapement of income. The genuineness of the sale transaction and the re-evaluation of the rate cannot be the sole basis for reopening. Revenue's Contention: The reopening is based on material unearthed during a search on the builder, indicating a higher property rate, which suggests escapement of income. The relevancy of the material is not disputed, and the sufficiency can be examined during reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

[2024:RJ-JP:44019-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR 1. D.B. Civil Writ Petition No. 13948/2024 Asha Maheshwari, Wife Of Ramesh Chandra Maheshwari, Aged About 68 Years, Resident Of A-121, Eden Garden, Raja Vas, Nangal Poroti, Sikar Road, Jaipur ----Petitioner Versus Income Tax Officer, Ward 4 (2), Jaipur Having Its Address At New Central Revenue Building, Bhagwan Dass Road, Jaipur ----Respondent 2. D.B. Civil Writ Petition No. 14155/2024 Varenya Rameshchandra Maheshwari, D/o Shri Ramesh Chandra Maheshwari, Aged about 40 years, resident of B201, Rajrudram society, near Ryan International School, Gokuldham, goregaon east, Mumbai, Maharashtra 400063 currently residing at A-121, Eden Garden, Raja vas, Nangal Poroti, Sikar road, Jaipur 302032 ----Petitioner Versus Income Tax Officer, Ward 2(2), Kota having its address at Dainik Navjyoti, Rawat Bhata Road, Kota 324009 ----Respondent 3. D.B. Civil Writ Petition No. 13949/2024 Ramesh Chandra Maheshwari Son Of Shri Laxmi Chand Maheshwari, Aged About 74 Years, Resident Of A-121, Eden Garden, Raja Vas, Nangal Poroti, Sikar Road, Jaipur. ----Petitioner Versus Assistant Commissioner Of Income -Tax, Circle 1, Alwar Having Its Address At Central Revenue Building, Moti Doongri Road, Alwar. ----Respondent For Petitioner(s) : Mr. Siddharth Ranka with Mr. Rohan Chatter & Ms. Satwika Jha For Respondent(s) : Mr. Sandeep Pathak Mr. Anuroop Singhi with Mr. N.S. Bhati & Mr. Aditya Khandelwal Mr. Shantanu Sharma (Uploaded on 23/10/2024 at 12:11:55 PM) (Downloaded on 30/10/2026 at 09:40:55 AM)

[2024:RJ-JP:44019-DB] (2 of 3) [CW-13948/2024] HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 21/10/2024 1. On advance copy, Mr. Sandeep Pathak, Mr. Anuroop Singhi and Mr. Shantanu Sharma, learned counsel appears for the respective respondents in all these matters. 2. These petitions have been filed to assail the correctness and validity of notice under Section 148 of the Income Tax Act, 1961 (for short ‘the Act of 1961’) on the ground that the material which is alleged to have been found during search carried out, in the premises of the other person, is not sufficient to invoke power under Section 148 of the Act of 1961 towards reassessment because the contents of the sale deed which is said to be the basis of re-opening, do not support even prima facie case that there has been escapement of any income. 3. We have gone through the order and the material placed on record. 4. The Assessing Officer has invoked power under Section 148 of the Act of 1961 presumably on the basis of certain material which have been disclosed/unearthed during search carried out in the premises of another person/the builder with whom the present assessee had entered into transaction of purchase of flat. At this stage, the reopening is mainly on the basis that as per the disclosure made by the builder, the rate of the property which was subject matter of the sale transaction was higher. Though this is seriously disputed by the learned counsel for the petitioners and he submits that the genunity of the sale (Uploaded on 23/10/2024 at 12:11:55 PM) (Downloaded on 30/10/2026 at 09:40:55 AM)

[2024:RJ-JP:44019-DB] (3 of 3) [CW-13948/2024] transaction on such evaluation of rate could not be made a basis, we are of the view that this is not a matter pertaining to jurisdiction but more in the nature of assessment of material on record. Relevancy of material being not in dispute, sufficiency of material may not be gone into by Writ Court at this stage when there is no addition but only reopening of assessment on disclosure of certain material. 5. We leave the assessee to raise all the grounds which may be available to him under the law at the stage of reassessment proceedings to satisfy the authority that it is not a case for addition. 6. With the said liberty, these writ petitions are dismissed. 7. Copy of this order be placed in each connected file. (ASHUTOSH KUMAR),J (MANINDRA MOHAN SHRIVASTAVA),CJ N.Gandhi/Tanisha/1,11 & 751 Powered by TCPDF (www.tcpdf.org) (Uploaded on 23/10/2024 at 12:11:55 PM) (Downloaded on 30/10/2026 at 09:40:55 AM)

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →