Gujarat High Court Judgments — 2022

The High Court held that the Labour Court did not err in entertaining the review application and that the same was maintainable. The Court reasoned that while a review on merits is impermissible, a review for correcting clerical mistakes or errors arising from an accidental slip or omission, as provided under Rule 31 of the Industrial Dispute (Bombay) Rules, 1957, is maintainable. The Court found that the Labour Court, in its review order, did not discuss the merits of the case but focused on its intention when passing the original award. The replacement of Laffans Petrochemicals Ltd. with the present petitioner in the operative portion was considered a correction of an accidental slip or omission, aligning with the Labour Court's presumed intention. The Court distinguished the present case from *Kapra Mazdoor Ekta Union* by noting that the review here was procedural, not on merit. The judgment of the Supreme Court in *M/s. Tata Consulting Engineers* was also considered, emphasizing that Rule 31 allows correction of clerical mistakes or errors from accidental slips or omissions where something intended was omitted or something unintended was included. The Court found no inconsistency in the Labour Court's findings and operative order. Therefore, no interference was called for, and the petition was dismissed.

The High Court permitted the petitioner to withdraw the Special Civil Application without entering into the merits of the case. The Court noted that the withdrawal would not prejudice the petitioner's right to raise all issues that had been presented before the Court. No specific finding was made on the validity of the reassessment proceedings or the arguments presented by either side. The operative direction was to allow the withdrawal of the petition.

The High Court held that the assessment order passed under Section 143(3) read with Section 144B for AY 2020-2021, the demand notice under Section 156, and the penalty notice under Section 274 read with Section 271AAC(1) were to be quashed and set aside. The Court found that the assessee had specifically requested a video conference hearing in response to the show-cause notice dated August 25, 2022, citing the complexity of the facts. The screenshot on record supported this request. However, this request was not acceded to, and no VC hearing was provided. The Court noted that the revenue's reply affidavit did not dispute this factual aspect. Therefore, the assessment order was quashed on the ground of breach of the principles of natural justice, without delving into the merits of the case. The assessment proceedings were restored to the stage of providing the personal hearing as sought by the assessee. The Assessing Officer was directed to pass an order expeditiously, not later than ten weeks from the receipt of the order, after providing the hearing.

The High Court held that the notices and orders issued by the respondent authority to the deceased assessee, after the department had been duly informed of the death and had approved the petitioner as the legal heir, were void ab initio. The court reasoned that once the department acknowledged the death and the substitution of the legal heir, continuing to issue notices to the deceased was procedurally invalid and violated principles of natural justice. The court relied on its own decision in Kanubhai Jinabhai Patel and the Delhi High Court's decision in Savita Kapila. Consequently, the petition was allowed, and the assessment order dated March 22, 2022, for Assessment Year 2013-14, along with all consequential notices, was quashed and set aside. The court did not leave any issue undecided.

The High Court held that notices issued to a deceased assessee, subsequent to the department being informed of the death and recognizing the legal heir, are void ab initio. The court noted that the department was communicated of the death on March 29, 2019, and the legal heir's request was approved on March 30, 2019. However, a show cause notice was issued on March 10, 2022, to the deceased father who had passed away on August 20, 2017. The court found that any notice issued after the respondent acknowledged the death and approved the legal heir's request was invalid. Consequently, the assessment order dated March 22, 2022, for Assessment Year 2014-15, and all consequential notices were quashed and set aside. The ratio decidendi is that proceedings initiated against a deceased person without proper substitution of legal heirs, after due intimation, are fundamentally flawed and unsustainable.

The High Court allowed the petition. It held that the notices and orders issued to the deceased assessee, after the department was aware of the death and had acknowledged the legal heir's status, were void ab initio. The court reasoned that issuing notices to a deceased person, subsequent to the department's acknowledgment of the death and the legal heir's identity, renders such proceedings invalid. The court specifically quashed and set aside the assessment order dated March 22, 2022, for Assessment Year 2014-15, along with all consequential notices. The ratio decidendi is that procedural fairness and adherence to legal provisions mandate that proceedings should not be initiated or continued against a deceased individual once their demise and the identity of their legal representative are known to the tax authorities.

The High Court held that the Tribunal erred in awarding compensation of Rs. 71,350/- and that the compensation awarded was not just and adequate. The Court considered the Income Tax Return of the year 2009-2010 (Exhibit 30), submitted prior to the accident, which showed the injured's income as Rs. 1,78,000/-. The Court found that the actual loss of income awarded by the Tribunal was on the lower side. Citing the ratio laid down in Sarla Verma and others Vs. Delhi Transport Corporation and National Insurance Company Limited Vs. Pranay Sethi, the Court concluded that the appellant was entitled to additional compensation. The Court enhanced the compensation under various heads, including income, pain, shock and suffering, special diet and transportation, and medical expenses, arriving at a total of Rs. 2,77,000/-. The additional amount awarded was Rs. 2,05,650/- with interest at 6% per annum from the date of the application till realization. The operative direction was to modify the MACT's award and grant the additional compensation.

The Tribunal allowed the petition, quashing the impugned order dated 12.03.2021 and the rectification order dated 25.01.2019. The Tribunal held that furnishing the audit report along with the return is a procedural requirement, and while mandatory, substantial compliance is expected. Applying the principle from Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption), the Tribunal found that the authority's approach should be equitable and judicious. Although technically the respondent might be justified in denying exemption, a public charitable trust with a long history of eligibility should not be denied exemption merely on limitation, especially given the legislature's wide discretionary powers to condone delay. The application for condonation of delay was allowed. The respondent was directed to process the return in accordance with law, and the petitioner agreed not to object to future proceedings under Section 143(1)/143(2) on grounds of limitation.

The High Court held that the notices issued under the Income Tax Act to the deceased assessee, after the department was duly informed of his death and the petitioner was recognized as the legal heir, were void ab initio. The court noted that the department was aware of the death on March 29, 2019, and had approved the petitioner's request on March 30, 2019. Consequently, any notice issued subsequent to this acknowledgment and approval, particularly the show cause notice dated March 10, 2022, and the notices under Sections 148 and 142(1) for AY 2015-16, were invalid. The reasoning is that proceedings cannot continue against a dead person once the authority is aware of the death and has recognized the legal representative. The ratio decidendi is that statutory notices must be served on living individuals or their duly recognized legal representatives, and failure to do so renders the proceedings void. The court quashed and set aside the assessment order dated March 22, 2022, for AY 2015-16, and all consequential notices.

The High Court held that the notices and orders issued by the respondent authority to the deceased assessee, subsequent to the department being informed of the death and approving the legal heir's request, were void ab initio. The court found that the show cause notice was issued on March 10, 2022, long after the deceased passed away on August 20, 2017, and after the department had acknowledged and approved the legal heir's request on March 30, 2019. Therefore, any notice issued thereafter was considered invalid. The court allowed the petition, quashing and setting aside the assessment order dated March 22, 2022, for Assessment Year 2015-16, and all consequential notices. The ratio decidendi is that actions taken against a deceased person after the revenue has knowledge of the death and has recognized the legal heir are null and void.

The High Court held that the notices and assessment order issued to the deceased assessee were void ab initio. The court noted that the department was informed of the assessee's death on March 29, 2019, and the legal heir's request was approved on March 30, 2019. Consequently, any show cause notice issued on March 10, 2022, and subsequent proceedings, including the final assessment order dated March 22, 2022, for Assessment Year 2013-14, were invalid because they were issued after the department had acknowledged the death and the legal heir's status. The court found merit in the petitioner's argument, supported by the cited precedents, that such notices are void. Therefore, the petition was allowed, quashing and setting aside the assessment order dated March 22, 2022, for AY 2013-14, and all consequential notices. No issue was expressly left undecided.

The High Court held that the exercise of jurisdiction by the Arbitrator under the MSMED Act, 2006, was without jurisdiction. The primary reason for this finding was that the petitioner (Anupam Industries Ltd.) was not registered as a micro, small, or medium enterprise at the time of the transactions for which the claim was made. The Court noted that respondent No. 3 obtained its registration under the MSMED Act subsequent to the alleged transactions. Consequently, the MSMED Act, particularly its provisions relating to delayed payments and mandatory arbitration, could not be invoked for claims arising from periods when the supplier was not registered under the Act. The Court found that the Arbitrator's award, based on a claim that was not maintainable under the MSMED Act, was unsustainable in law. Therefore, the impugned award dated May 3, 2019, was quashed and set aside. The petition was allowed, and no order as to costs was made. The request for a stay on the order was declined.

The High Court held that the respondent authorities failed to take adequate recovery action from the assessee company beyond issuing notices and attaching a bank account. The Court referred to Section 179(1) of the Act, which stipulates that directors are liable unless they prove non-recovery is not attributable to their gross neglect, misfeasance, or breach of duty. The petitioners had prima facie shown that non-recovery was not due to their negligence. The impugned order failed to consider the petitioners' explanation that they had challenged the assessment order and were unable to deposit 20% of the demand to obtain a stay. The Court found that the respondents had not laid down a sufficient foundation for invoking Section 179, as required by the decision in Sadhna Ramchandra Jeswani. The reliance on Rajeev Behl by the revenue was not helpful as the basic ingredients of Section 179 were not complied with. Therefore, the impugned actions were without jurisdiction. The petition was allowed, and the impugned order and consequential orders were quashed and set aside.

The High Court held that the respondent authorities failed to take sufficient action for recovery of outstanding dues from the company, beyond issuing a notice and attaching its bank account. The court referred to Section 179(1) of the Act, which requires the Assessing Officer to make recovery efforts from the company before holding directors liable. The petitioners had prima facie demonstrated that the non-recovery was not attributable to their gross negligence, misfeasance, or breach of duty. The impugned order failed to consider the petitioners' explanation and their lack of negligence. The court found that the petitioners could not be deemed negligent solely for being unable to deposit 20% of the demand. Citing Sadhna Ramchandra Jeswani and Bhagwandas J. Patel, the court found the impugned action to be without jurisdiction. The reliance on Rajeev Behl by the revenue was deemed unhelpful as the basic ingredients of Section 179 were not complied with. The petition was allowed, and the impugned order was quashed and set aside.

The High Court held that the Tribunal was correct in upholding the order of the CIT(A). The Court noted that the assessee had executed an agreement for sale on March 29, 2008, and received cheques for Rs. 52,36,000/-, which were cleared in the financial year relevant to AY 2009-10. The sale deed was registered on July 25, 2008, accepting the sale consideration of Rs. 52,36,000/- as per the agreement. The Stamp Duty Authority assessed this valuation for stamp duty purposes, as the assessee had purchased stamps before April 1, 2008. The Court emphasized that Section 50C of the Act provides that the rate adopted or assessed by the Stamp Duty Authorities is to be considered for the purpose of Section 50C. The AO was therefore incorrect in adopting the market value assessable for stamp duty purposes, especially since the provision for considering the AO's own valuation was inserted with effect from October 1, 2009, applicable from AY 2010-11. Furthermore, the Tribunal rightly observed that once a valid reference is made to the valuation officer under Section 50C(2), the AO is not empowered to reject the report of the valuation officer. This finding was supported by a co-ordinate bench decision. Consequently, the appeal was dismissed as no substantial question of law was found.

The Tribunal upheld the deletion of the addition made by the AO. The Tribunal observed that the impugned transaction had already been treated as a transfer in AY 2009-10, when the agreement to sell was entered into, and the capital gains were accepted by the assessee. Therefore, taxing the same transaction again in AY 2013-14 was not permissible. The AO's own computation, which reduced the capital gain already taxed in AY 2009-10, implicitly admitted that the transaction was taxed in an earlier year. The High Court found no error in the Tribunal's findings, noting that the issue relating to the transfer in AY 2009-10 had attained finality, and the department had also considered it as a transfer in that year. Charging capital gain tax on the same land based on the sale deed registration would amount to taxing it twice. The Court dismissed the appeal without entering into the controversy of Question B, keeping that issue open. The operative direction was the dismissal of the appeal.

The High Court held that while the powers under Section 281(B) are drastic and must be exercised for proper reasons, the continuation of the provisional attachment in this case was not necessary for the petitioner to continue its business. The Court found that the interest of the Revenue could be safeguarded by other means. Specifically, the Court directed that the Fixed Deposit of Rs. 2,65,04,306 in DBS Bank would suffice to protect the Revenue's interest for now. Additionally, the Indian and Taiwanese Directors were required to furnish an undertaking to fulfill obligations from their personal funds if the assessment exceeded the attached amount, along with a disclosure of the company's immovable assets. Upon verification of these aspects within a week, the attachment of the HSBC bank account would be released. The Court emphasized that its observations would not prejudice further proceedings. The judgment references Vodafone Idea Limited vs. Dy. Commissioner of Income Tax and Others in its reasoning.

The High Court held that the notice dated 31.03.2021 under Section 148 and the order dated 08.12.2021 rejecting the objections were set aside. The Court found that the AO's belief that income had escaped assessment for AY 2015-16 was misconceived and without foundation. The reasoning was that the transaction was a development agreement, and the transfer of property, for the purpose of capital gains tax, did not occur in the financial year corresponding to AY 2015-16. The Court relied on the principle that capital gains are chargeable in the year of transfer, even if consideration is received earlier or later. Since the development agreement itself did not constitute a transfer under Section 2(47)(v) of the Act in AY 2015-16, and the capital gains were offered in AY 2016-17, the basis for reopening was erroneous. The Court cited Supreme Court decisions in CIT vs. Shoorji Vallabhdas and Co. and Ganga Saran and Sons (P.) Ltd. v. ITO, emphasizing that the AO's belief must be based on relevant and material reasons, and not be arbitrary or irrational. The Court found no rational nexus between the reasons and the belief for reopening.

The High Court held that the petition was premature and chose not to entertain it at that stage. The court directed the Assessing Officer to dispose of the objections raised by the petitioner within two weeks from the date of receipt of a copy of the order, after providing the petitioner an opportunity of being heard in accordance with law. The court further directed that if any adverse order is passed, no effect shall be given to it by the Revenue for two weeks, during which period the petitioner would be at liberty to take legal recourse. The High Court explicitly stated that it had not expressed any view on the merits of the matter, and it shall be decided on its own strength.

The High Court disposed of the Special Civil Application. The Court noted that an order dated March 9, 2022, was received by the assessee, indicating that the total income was computed as nil, with no addition made to the income. The Court observed that the cause of the petition no longer survived because the assessment had been framed without any additions, thereby favouring the petitioner. Consequently, the interim relief granted earlier was vacated forthwith. The Court did not explicitly decide on the maintainability of the petition or the validity of the reopening notice on merits, as the petition was disposed of based on the subsequent development of the assessment order.

The High Court disposed of the petition, noting that the cause of the petition no longer survived. The Court was informed that an order dated 09.03.2022 was received by the assessee, wherein the total income was computed as nil for the assessment year 2017-18. The Court observed that the assessment had been framed with no addition to the income, which favored the petitioner. Consequently, the interim relief granted earlier was vacated forthwith. The Court did not explicitly decide on the maintainability of the petition or the prematurity argument, as the underlying issue leading to the petition was rendered moot by the subsequent assessment order.

The High Court held that the petition was premature and therefore, it chose not to entertain it at that stage. The Court directed the Assessing Officer to dispose of the objections raised by the petitioner within two weeks from the date of receipt of the order, providing the petitioner an opportunity in accordance with law. The Court further stipulated that if any adverse order was passed, it would not be given effect to by the Revenue for two weeks, during which the petitioner would be at liberty to take legal recourse. The Court explicitly stated that it had not expressed any view on the merits of the matter, and it would be decided on its own strength.

The High Court held that the petition was premature. The Court noted that it had disposed of similar matters from the same group, but emphasized that nothing could be presumed in advance and the stage of disposing of objections needed to be made available to the respondent authority. Therefore, the Court chose not to entertain the petition at that stage. The Court directed the Assessing Officer to dispose of the objections raised by the petitioner within two weeks from the receipt of the order, providing an opportunity for hearing in accordance with law. The Court further directed that if any adverse order was passed, no effect should be given to it by the Revenue for two weeks, during which the petitioner would be at liberty to take legal recourse. The Court explicitly stated that it had not expressed any view on the merits of the matter, which would be decided on its own strength.

The High Court held that the notice dated March 29, 2018, issued under Section 148 of the Income Tax Act, 1961, and the order dated October 16, 2018, rejecting the petitioner's objections, were invalid and therefore set aside. The Court reasoned that the Assessing Officer had already solicited and received all the relevant information concerning the premature surrender of the Bajaj Alliance pension policy, the source of funds, and crucially, the fact that the assessee had not claimed any deduction under Section 80CCC(1) of the Act. The Court emphasized that Section 80CCC(2) imposes taxability on the surrender value only if a deduction under Section 80CCC(1) was previously claimed. Since the assessee had not claimed such a deduction, the gain on premature surrender was not liable to be taxed. The Court concluded that the AO's attempt to reopen the assessment amounted to a "fishing inquiry" and reverification, which are impermissible uses of reassessment powers. The petition was allowed, and the rule was made absolute.

The High Court held that the notice issued under Section 148 and the subsequent order rejecting the petitioner's objections were unacceptable in law and liable to be set aside. The Court reasoned that the issue regarding the receipt of share application money from the four entities was the very issue considered by the AO during the regular assessment. The petitioner had supplied all relevant material, including accounting entries, resolutions, names, addresses, and PAN numbers of allottees, which had satisfied the AO at the time regarding the genuineness of the entities and transactions. The Court found no reason for the AO to doubt this at a subsequent juncture based on a 'changed opinion'. The Court relied on precedents like Garden Silk Mills Ltd. vs. CIT (No.2) and Orient News Prints Ltd. vs. Deputy Commissioner of Income Tax, emphasizing that powers to re-open assessment cannot be based on the same facts or a change of opinion, and a fishing inquiry into concluded issues is an abuse of power. The Court noted that unlike cases where willful false statements or non-existent companies were involved, no such material was present here. Therefore, the petition was allowed, and the impugned notice and order were set aside.

The Tribunal held that the notice under Section 148 and the order rejecting objections were liable to be set aside. The court found that the Assessing Officer's action was based on a clear change of opinion. The material that formed the basis for reopening – the royalty expenditure and the quantity of marble rubble mined – was the same material that was solicited and examined by the Assessing Officer during the regular assessment under Section 143(3). The court reiterated the principle from Commissioner of Income Tax Vs. Kelvinator of India Limited that reopening based on a mere change of opinion is impermissible, even after the substitution of Section 147. The Assessing Officer must have tangible material to form a belief of escapement, and the reasons recorded must have a link to this belief. The court noted that the Assessing Officer had misguided himself in law by seeking to reassess income on the ground of mined and produced material, which had already been examined. Therefore, the petition was allowed, setting aside the notice dated September 23, 2018, under Section 148 and the order dated September 28, 2018, rejecting objections.

The High Court condoned the delay of 474 days in filing the appeal. The Court emphasized that the cause for delay, not merely its length, is paramount. It noted that the Revenue was prosecuting its cause by filing a rectification application before the ITAT, which was a valid step. Furthermore, developments in a connected matter involving the assessee's son, where the High Court had directed the filing of a rectification application, influenced the Revenue's decision to file a similar application in the present case. The Court found that the time spent in these proceedings constituted a sufficient cause for the delay. The Court also addressed the calculation of delay, rejecting the assessee's contention of over 900 days and accepting the Registry's calculation of 474 days after accounting for lockdown extensions. The Court applied a liberal approach, as espoused by the Supreme Court in Collector Land Acquisition, Anantnag & Anr. v. Mst. Katiji and others, holding that technicalities should yield to substantial justice when a sufficient cause is shown. The Civil Application was allowed.

The High Court held that the substantial question of law formulated in the present appeal was identical to the one in Tax Appeal No. 188 of 2012, which had already been answered against the Revenue and in favour of the Assessee. The Court referred to its own observation in the connected appeal, stating that the finding of the CIT(A) and the Tribunal regarding foreign exchange fluctuation gains not being connected to business activity was a finding of fact, and no substantial question of law arose. Consequently, the present Tax Appeal was disposed of by answering the substantial question of law against the Revenue and in favour of the Assessee. The Civil Application No. 1 of 2022 was rejected as it did not survive.

The High Court addressed substantial questions of law (B), (C), (D), and (F). Question (E) was deemed academic. Regarding question (F), concerning the gratuity fund payment, the Court held that the assessee was aware of the requirement for specific approval for the deed of variation, as evidenced by its communications and reminders. The Court found that the scheme remained inoperative for a significant period without continued approval. Citing the principle of strict construction of taxing statutes and referencing a Supreme Court decision, the Court concluded that the authorities below did not err in disallowing the deduction. Therefore, substantial question of law (F) was answered in favor of the revenue. The judgment also refers to a Punjab & Haryana High Court decision in a similar situation supporting the revenue's stance on gratuity fund deductions. The reasoning for questions (B), (C), and (D) is not fully detailed in the provided excerpt, but the overall outcome suggests they were also decided against the assessee, leading to the appeal being dismissed.

The High Court held that the appeals filed by the Revenue did not raise any substantial question of law. The Tribunal's decision to delete the addition made under Section 2(22)(e) was found to be eminently just, proper, and legal. The Tribunal had observed that the assessee held 21.45% equity in KSPPL, and KSPPL held 40.83% in the assessee, indicating cross-shareholdings. Both companies were engaged in similar businesses and functioned for mutual benefit. The Tribunal noted that KSPPL had been advancing funds to the assessee even before the assessee became a shareholder, and these transactions were in the ordinary course of business. The Tribunal relied on the Gujarat High Court's decision in Pr. CIT v. Mohan Bhagwatprasad Agrawal and the Bombay High Court's decision in CIT Vs. Parle Plastics Ltd., which held that Section 2(22)(e) requires money lending to be a 'substantial part of business' and not 'principal business'. The Court found the facts of the present case comparable to Mohan Bhagwatprasad Agrawal, where loans taken on interest from companies where the assessee held shares were not treated as deemed dividend. Therefore, the appeals were dismissed.

The High Court held that the appeals filed by the Revenue did not raise any substantial question of law. The Tribunal's decision to delete the addition made under Section 2(22)(e) was found to be eminently just, proper, and legal. The Tribunal had observed that the assessee held 21.45% equity in KSPPL, and KSPPL held 40.83% in the assessee, indicating cross-shareholdings. Both companies were engaged in similar businesses and functioned for mutual benefit. The Tribunal noted that KSPPL had been advancing funds to the assessee even before the assessee became a shareholder, and these transactions were in the ordinary course of business. The Tribunal relied on the Gujarat High Court's decision in Pr. CIT v. Mohan Bhagwatprasad Agrawal and the Bombay High Court's decision in CIT Vs. Parle Plastics Ltd., which held that Section 2(22)(e) requires money lending to be a 'substantial part of business' and not 'principal business'. The Court found the facts of the present case comparable to Mohan Bhagwatprasad Agrawal, where loans taken on interest from companies where the assessee held shares were not treated as deemed dividend. Therefore, the appeals were dismissed.

The High Court held that no substantial question of law arises from the order of the ITAT. The Tribunal had rightly held in favour of the assessee that Section 2(22)(e) was not applicable. The Tribunal observed that the assessee held 21.45% equity in KSPPL, and KSPPL held 40.83% in the assessee, indicating cross-shareholdings. Both companies were engaged in similar businesses and functioned for mutual benefit. The Tribunal noted that KSPPL had been advancing funds to the assessee even before the assessee became a shareholder, and these transactions were in the ordinary course of business. The interest income earned by the assessee from money lending was offered as business income. The Tribunal relied on the Gujarat High Court's decision in Pr. CIT v. Mohan Bhagwatprasad Agrawal and the Bombay High Court's decision in CIT v. Parle Plastics Ltd., which held that loans and advances from companies engaged in money lending business, even with cross-shareholdings, are not covered by Section 2(22)(e) if they are part of the ordinary course of business and interest is charged. The High Court found the Tribunal's view to be just, proper, and legal.

The High Court held that the impugned orders dated 19.04.2022 were passed without extending the opportunity of personal hearing to the petitioner, thus violating the principles of natural justice. Although the petitioner's reply to the show-cause notice indicated that they did not opt for personal hearing, the Court acknowledged that this was stated to be a mistake and that the petitioner is entitled to exercise their right to a personal hearing. The Court noted that the learned Assistant Government Pleader could not dispute the legal proposition regarding the necessity of a personal hearing when an adverse decision is contemplated or requested. Consequently, based on the statement made by the learned AGP that the competent authority would grant a personal hearing, the Court set aside the three impugned orders. The competent authority was directed to provide a personal hearing to the petitioner within three weeks from the date of the order and thereafter pass fresh orders in accordance with the law within two weeks of affording such hearing. The Court explicitly stated that it had not expressed any opinion or gone into the merits of the case of either side.

The High Court held that the impugned notices under Section 148 of the Income Tax Act, 1961, were not tenable in law and were quashed and set aside. The Court found that the reopening was based on a 'bogus sauda chitthi' dated March 12, 2014, which was on plain paper, neither stamped nor registered nor notarized. The immovable properties in question had not been sold by the petitioners and co-owners to the buyer via a sale deed, and the properties remained registered in the names of the petitioners with possession retained by them. Therefore, no income had accrued on account of the transfer of a capital asset. The Court concluded that there was no escapement of income chargeable to tax, as all relevant records were produced, and the AO failed to demonstrate any such escapement. Consequently, the orders disposing of the objections were also quashed and set aside. The rule was made absolute.

The High Court held that the impugned notices under Section 148 of the Income Tax Act, 1961, were not tenable in law and were quashed and set aside. The Court found that the reopening was based on a 'bogus sauda chitthi' dated March 12, 2014, which was on plain paper, neither stamped nor registered nor notarized. The immovable properties in question had not been sold by the petitioners and co-owners to the buyer via a sale deed, and the properties remained registered in the names of the petitioners with possession retained by them. Therefore, no income had accrued on account of the transfer of a capital asset. The Court concluded that there was no escapement of income chargeable to tax, as all relevant records were produced, and the AO failed to demonstrate any such escapement. Consequently, the orders disposing of the objections were also quashed and set aside. The rule was made absolute.

The High Court held that the impugned notices under Section 148 of the Income Tax Act, 1961, were not tenable in law and were quashed and set aside. The Court found that the reopening was based on a 'bogus sauda chitthi' dated March 12, 2014, which was on plain paper, neither stamped nor registered nor notarized. The immovable properties in question had not been sold by the petitioners and co-owners to the buyer via a sale deed, and the properties remained registered in the names of the petitioners with possession retained by them. Therefore, no income had accrued on account of the transfer of a capital asset. The Court concluded that there was no escapement of income chargeable to tax, as all relevant records were produced, and the AO failed to demonstrate any such escapement. Consequently, the orders disposing of the objections were also quashed and set aside. The rule was made absolute.

The High Court held that the Assessing Officer (AO) could not assume jurisdiction to reopen the assessment under Section 147 of the Income Tax Act, 1961, for Assessment Year 2012-2013. The Court found that the reasons recorded for reopening did not disclose any new independent material available to the AO. The impugned notice was issued solely based on the analysis of materials made available by the petitioner during the course of the original assessment proceedings, which were processed under Section 143(1). The Court emphasized that the AO must form a belief based on tangible material and not on a mere repetition of an investigation report or a roving inquiry. Since the petitioner had disclosed all material facts relevant for the assessment in her return, and the AO's belief that income had escaped assessment was not substantiated by new, tangible material, the reopening was deemed illegal. Consequently, the notice dated March 25, 2019, under Section 148 and the subsequent order dated September 18, 2019, disposing of objections, were quashed and set aside. The petition was allowed.

The High Court allowed the Special Civil Application and quashed the notice dated 30.03.2021 issued under Section 148 and the order dated 11.11.2021 disposing of the objections. The Court found that the foundational facts for reopening the assessment were absent. The reasons for reopening were based on a search in the case of the M/s Dishman group, which indicated bogus loans and advances. However, the petitioner contended, and the Court agreed, that no such loan transaction with M/s Dishman existed for AY 2013-2014, and the original assessment order under Section 143(3) did not reflect any such loan. The Court held that without any foundational facts, the Assessing Officer's belief that income had escaped assessment was a myth and without foundation, leading to a lack of due application of mind in issuing the notice. The Court relied on the principles laid down in Amar Jewellers Ltd. vs. Deputy Commissioner of Income-tax and Giraben Atulbhai Shah vs. Office of the Assistant Commissioner of Income Tax.

The High Court held that assessment proceedings cannot be initiated against a dead person. The impugned notice dated 22.07.2022, issued under Section 148 of the Income Tax Act, 1961, in the name of the deceased Khimji Harji Patel, was therefore illegal and liable to be set aside. The Court relied on its previous decision in Urmilaben Anirudhhasinji Jadeja vs. Income Tax Officer, Ward 7(1)(3) and Chandreshbhai Jayantibhai Patel vs. Income Tax Officer, which held that assessment against a dead person is a nullity. The Court clarified that Section 292BB of the Act, which deems a notice valid if the assessee appears or cooperates, does not apply when the notice is issued to a dead person. The Court noted that the facts did not indicate any participation by the legal representative in the proceedings that would validate the notice. Consequently, the notice was set aside, and the rule was made absolute.

The High Court held that the impugned notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2013-2014 was illegal and liable to be quashed. The Court found that the notice was issued beyond the period of four years from the date of the regular assessment order under Section 143(3). Crucially, the Court observed that there was no new independent material available with the Assessing Officer to justify the reopening. The reasons recorded were based solely on the analysis of materials already provided by the assessee during the original assessment. The issue regarding annuity income and interest expenditure was considered and decided by the Assessing Officer during the initial assessment. Therefore, the reopening amounted to a 'change of opinion' on the part of the Assessing Officer, which is not a permissible ground for reopening an assessment beyond four years, especially when the assessee had disclosed all material facts truly and fully. The Court relied on the Supreme Court's decision in Commissioner of Income-tax v. Kelvinator of India Ltd. The order disposing of the petitioner's objections was also quashed. The petition was allowed.

The High Court held that a notice issued under Section 148 of the Income Tax Act, 1961, in the name of a deceased person is invalid and a nullity. The Court referred to its own decision in Urmilaben Anirudhhasinji Jadeja vs. Income Tax Officer, Ward 7(1)(3) and Chandreshbhai Jayantibhai Patel vs. Income Tax Officer, which held that assessment proceedings cannot be initiated against a dead person. The Court clarified that Section 292BB of the Act, which deems notices valid in certain circumstances of appearance or cooperation, does not apply when notices are issued to a dead assessee. The Court found no facts or circumstances in the present case to suggest that the legal representative had submitted to the jurisdiction or participated in the proceedings in a manner that would validate the notice. Consequently, the impugned notice dated 26.07.2022 was set aside as illegal. The rule was made absolute.

The High Court held that in the case of a block assessment framed under Section 158BC read with Section 143(3) of the Income Tax Act, 1961, a statutory notice under Section 143(2) is required to be issued within the statutory time frame prescribed under the Act. The Court referred to the Hon'ble Apex Court's decision in Assistant Commissioner of Income Tax v. Hotel Blue Moon, which held in the affirmative on a similar issue, favoring the assessee and against the revenue. Consequently, the High Court answered the questions of law in favor of the appellant-assessee. The operative direction was to allow the appeal, implying that the assessment framed without the requisite notice under Section 143(2) would be considered invalid. No issue was expressly left undecided.

The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2013-2014 was not tenable in law. The Court found that the Assessing Officer had a change of opinion regarding the valuation of shares, an issue that was already considered during the original assessment proceedings under Section 143(3). The Court emphasized that the Assessing Officer cannot have jurisdiction to issue a notice under Section 148 for reopening an assessment beyond a period of four years, especially when it is based on a mere change of opinion, citing the Supreme Court's decision in Commissioner of Income tax v. Kelvinator of India Ltd. The Court noted that the Assessing Officer's power to reopen is not arbitrary and requires tangible material, not just a shift in viewpoint. Consequently, the impugned notice under Section 148 was quashed and set aside, along with the order dated November 11, 2021, disposing of the petitioner's objections.

The High Court held that income tax authorities cannot subject a dead person to assessment proceedings. A notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person is a nullity and renders the subsequent assessment proceedings without authority of law. The Court relied on its earlier decision in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3) [(420) ITR 226]. The Court clarified that mere intimation of death by a legal representative does not amount to participation in the proceedings. Section 292BB of the Act, which deems notices valid if the assessee appears or cooperates, does not apply when a notice is issued to a dead person and the legal representative has not submitted to the jurisdiction. The ratio decidendi is that assessment proceedings against a dead person are a jurisdictional defect and cannot be sustained unless the legal representative has actively participated and submitted to the jurisdiction. The petition was allowed, setting aside the assessment order, demand notice, and the Section 264 order.

The Gujarat High Court held that the impugned notice dated March 27, 2021, issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for Assessment Year 2014-2015, was illegal and liable to be set aside. The Court found that the Assessing Officer had already considered the issue of allowability of expenditure under Section 14A during the original scrutiny assessment, which concluded with an order under Section 143(3). The reopening was based on the very same facts that were considered and decided upon, amounting to a mere change of opinion. The Court emphasized that a change of opinion, without anything more, cannot be a ground for reopening a concluded assessment, citing the Supreme Court's decision in Commissioner of Income Tax vs. Kelvinator of India Ltd. The Court also noted that the notice was issued after four years, and the prerequisite of failure to fully and truly disclose facts was not met. Consequently, the order dated November 11, 2021, rejecting the petitioner's objections was also set aside. The petition was allowed, and the rule was made absolute.

The Tribunal allowed the appeal of the assessee, quashing the order passed under Section 263. The Tribunal observed that the original assessment was a scrutiny assessment under Section 143(3) and that the AO had issued a notice under Section 142(1) along with a questionnaire, specifically asking for details regarding the claim of deduction under Section 80P. The assessee had provided detailed submissions on December 18, 2017, explaining that this was not the first instance of claiming such a deduction and that similar claims for deduction under Section 80P(2)(d) had been allowed by the revenue in earlier assessment years (2011-12 to 2013-14). The Tribunal accepted the assessee's submission that a cooperative bank is a cooperative society and that the deduction under Section 80P was available for interest earned on investments in such societies. The Tribunal concluded that the Assessing Officer had categorically made specific verification on the impugned issue, considered the assessee's submissions and documentary evidence, and therefore, the order passed under Section 263 was not sustainable in law. The High Court agreed with the Tribunal's reasoning, finding the recorded findings to be proper and tenable in law, and held that no substantial question of law arose.

The High Court of Gujarat, in this Tax Appeal, held that the substantial question of law framed in the appeal, concerning the invocation of Section 55A of the Income Tax Act, 1961, was covered by a judgment of the Apex Court in the case of Commissioner of Income Tax v. Gauranginiben S. Shodhan Indl., reported in 367 ITR 238. Consequently, the appeal was allowed, with the substantial question of law being answered in favour of the assessee. The reasoning is that the co-ordinate bench's decision in Gauranginiben's case, which addressed a similar substantial question of law regarding Section 55A, was binding. No costs were awarded. The pending civil application was consigned to record.

The High Court observed that the tax effect in the present appeal is less than the monetary limit fixed under the extant Circulars/Notifications issued by the CBDT, specifically mentioning Circular No. 17 of 2019 dated 08.08.2019. Consequently, the Court held that the appeal would not survive for consideration on merits due to the low tax effect. The appeal was therefore disposed of on this ground. However, the Court made it clear that if the appeal falls under any exception carved out in the said Circulars, either party is at liberty to seek revival of the appeal by filing an appropriate note in the Registry. The question of law raised in the appeal was kept open.

The High Court noted that a co-ordinate bench in the case of Commissioner of Income Tax v. Gauranginiben S. Shodhan Indl. had already answered the substantial question of law concerning the provisions of Section 55A of the Income Tax Act, 1961. The assessee's counsel stated that since the second substantial question of law was decided in favor of the assessee by this Court, they would not press the first substantial question of law. Consequently, the appeal was allowed by answering the substantial question of law in favor of the assessee. The operative direction was to allow the appeal. No orders as to costs were made. The pending application was consigned to record.

The High Court held that the appeal would not survive for consideration due to the low tax effect, which is below the monetary limit fixed by CBDT Circular No. 17 of 19 dated 08.08.2019. The Tribunal's order is therefore disposed of on this ground. The Court clarified that the question of law raised in the appeal remains open. The judgment explicitly states that if the appeal falls under any exception carved out in the said circulars, either party can seek revival of the appeal by filing an appropriate note. The ratio is that appeals with a tax effect below the prescribed monetary limits are not maintainable unless they fall under specific exceptions, and such appeals can be disposed of without deciding the merits, with liberty to seek revival.