Rajasthan High Court Judgments — 2024

The High Court allowed the writ petition. The decision was based on the agreement between the parties that the issue involved in the present petition was covered by a previous decision of the same Court in D.B.Civil Writ Petition No.18363/2019 (Shyam Sunder Khandelwal Vs. Assistant Commissioner of Income Tax), decided on March 19, 2024. Consequently, the writ petition was allowed in the same terms as the cited precedent. The operative direction was to quash the impugned notice. No issues were left undecided.

The Tribunal held that the respondents (revenue authorities) are directed to proceed in accordance with the law laid down by the Hon'ble Supreme Court in the case of G.K. And Driveshafts (India) Ltd. This means the Assessing Officer must decide the objections filed by the petitioner by passing a speaking order before proceeding further with the notice issued under Section 148 of the Income Tax Act. The Tribunal did not decide on the merits of the reassessment proceedings themselves but focused on the procedural requirement of addressing the assessee's objections. The ratio decidendi is that the statutory requirement to furnish reasons for reassessment necessitates a corresponding obligation on the Assessing Officer to dispose of the assessee's objections thereto by a speaking order before continuing with the assessment.

The High Court decided that the petitioner's request to withdraw the Civil Writ Petition and seek liberty to file a fresh petition if the occasion arises is granted. The Court accordingly dismissed the petition as withdrawn with the liberty as prayed for. The stay application was also disposed of. The reasoning is based on the petitioner's counsel not pressing the petition. No specific findings on the merits of the case were made as the petition was withdrawn. No issues were left undecided as the matter was disposed of on the petitioner's request.

The High Court set aside the impugned orders dated 26.04.2012 and 27.03.2014 without commenting on the merits of the case. The Court acknowledged that the petitioner could not avail the opportunity of hearing due to the sickness and death of the father of the authorized representative. Consequently, the matter was remitted back to the concerned official to decide the application filed under Section 10(23C) of the Income Tax Act, 1961, in accordance with the law. The petition was allowed, and the operative direction was to reconsider the application.

The High Court held that the findings recorded by the Income Tax Officer in paragraph 3.5 of his order, which stated that the AO had not considered the sale consideration declared by the assessee in his ITR and that the proceeding was void, could not be sustained in light of the admitted fact that the petitioner had filed his Income Tax Return for AY 2011-12. The Court noted that while the revenue admitted the filing of the return, they contested the attachment of the computation. However, the ITO's own order acknowledged the non-consideration of the sale consideration declared in the ITR. Consequently, the impugned order dated October 4, 2018, rejecting the objections was set aside. The matter was remitted back to the Income Tax Officer for deciding the objections afresh, with a clear direction that the officer should not be influenced by the observations made in the impugned order and should decide it in accordance with law. The petitioner was directed to appear before the respondent No.1 on May 3, 2024.

The Tribunal quashed the reassessment proceedings initiated against the respondent. The High Court noted that the substantial question of law regarding the Education Cess has become academic due to a retrospective amendment and the respondent's decision not to contest the issue.

The Tribunal allowed the petition, setting aside the notice dated March 24, 2020, and all consequential orders, including the assessment order dated September 23, 2021. The Tribunal relied on the decision of a Coordinate Bench in Shyam Sunder Khandelwal vs. Assistant Commissioner of Income Tax, which held that proceedings initiated under Section 148, when based on material collected during a search of a third party, are not permissible, and the AO must proceed under Section 153C. The reasoning is that Section 153C specifically deals with the assessment of income of any other person based on seized material, whereas Section 148 is a general provision for reopening assessments. The ratio decidendi is that the AO cannot circumvent the specific procedure laid down in Section 153C for cases involving seized material from third parties by resorting to the general provisions of Section 147/148. The operative direction was to set aside the notice and consequential orders and for the petitioner to submit this order before the Appellate Authority for closure of the appeal.

The High Court held that the respondents have ample powers to condone the delay of an assessee if sufficient reasons are found, as per Section 119(2)(b) of the Income Tax Act, 1961. The Court referred to Circular 9/2015, which outlines conditions for condonation, including ensuring the income/loss declared and refund claimed are correct and genuine, and that the case involves genuine hardship on merits. The Court found that the petitioner, being a widow running a small business, had adequately explained the delay. Therefore, the writ petition was allowed, the impugned order dated 07.11.2023 was quashed, and the respondents were directed to treat the return filed by the petitioner for AY 2021-22 as filed within time. The respondents were granted liberty to question the assessment on law but not on limitation.

The Tribunal held that the impugned notice dated 09.01.2024 issued under Section 263 of the Income Tax Act, 1961, along with all consequential proceedings, is quashed and set aside on the grounds of being barred by limitation. The Tribunal relied on the Supreme Court's decision in CIT vs. Industrial Development Bank of India Ltd. and a Division Bench ruling of the same court in Chambal Fertilisers and Chemicals Limited. It was observed that the reassessment order dated 25.03.2022, concerning the job charges shortfall of Rs. 2,32,330/-, was strictly within a limited ambit and distinct from the original assessment order. Following the precedent, when the subject matter of reassessment is distinct and different, the period of limitation for exercising powers under Section 263 of the Act would be reckoned from the date of the original assessment order. Since the notice under Section 263 was issued on 09.01.2024, which is beyond two years from the original assessment order dated 08.01.2016, it is held to be ex facie illegal on the count of limitation. The writ petition is allowed in these terms.

The High Court noted that an assessment order had been passed during the pendency of the writ petition. It was stated by the petitioner that they had availed the statutory appeal remedy against this assessment order. Considering that the petitioner had chosen to pursue the available appellate remedy, the High Court disposed of the writ petition, keeping all issues open for consideration before the appellate authority. The court did not decide on the merits of the assessment order or the grounds raised in the writ petition.

The Tribunal held that notices and proceedings initiated against a dead person are a nullity. This legal position was declared to be no longer res integra, citing two previous Division Bench orders of the Rajasthan High Court: Shri Radha Mohan Khandelwal Vs. Assistant Commissioner of Income Tax and Legal Heirs of Smt. Sneh Lata Bhandari Vs. Income tax Officers & Ors. In the latter case, liberty was granted to the Department to re-initiate proceedings under Section 148A(b) and Section 159 of the Act, with a specific direction to exclude the period between the filing of the writ petition and its disposal from the computation of the limitation period. The Court noted that if the Department decides to proceed against the legal representatives, they will have the opportunity to raise the ground of limitation. The writ petition was allowed to the extent stated.

The Tribunal (High Court) held that the petitioner's request to withdraw the writ petition with liberty to file it before the Principal Seat of the Court at Jodhpur was granted. Consequently, the writ petition was dismissed as withdrawn with the liberty as prayed for. The court did not decide any substantive issues related to the Income Tax Act. The operative direction was to dismiss the petition as withdrawn and grant liberty to refile it at the appropriate bench.

The High Court dismissed the appeal, upholding the acquittal of the respondent. The Court noted that for a conviction under Section 276 CC, the prosecution must prove a wilful attempt to evade tax, penalty, or interest, which requires 'mens rea' as a necessary ingredient. The respondent had explained the delay in filing the returns and deposited the entire tax amount with penalty. The Court found that the complainant/appellant failed to prove that the respondent had the 'mens rea' to evade tax payment beyond reasonable doubt. The Court also observed that no notice was given to the respondent prior to the filing of the complaint. Applying the principle that in an appeal against acquittal, if two views are plausible, the one favouring the accused's innocence should be taken, the Court found no perversity in the trial court's findings. Therefore, the acquittal was upheld.

The Tribunal held that the issue raised in the writ petition is squarely covered by the decision of this Court in Shri Radha Mohan Khandelwal, Legal Heir of Late Smt. Anguri Devi Khandelwal Vs. Assistant Commissioner of Income Tax. In that case, the Court, after considering the Supreme Court's judgment in Union of India & Others Vs. Ashish Agarwal, disposed of the writ petition by granting liberty to proceed against the legal representatives of the deceased assessee. Therefore, following this precedent, the present writ petition was also disposed of with a similar liberty granted to the respondent (Income Tax Officer) to proceed against the legal representatives of Late Ashok Kumar Jain in accordance with law. No specific amount in dispute was mentioned. The core reasoning is that while the initial notice might be procedurally flawed if issued directly to a deceased, the law permits continuation of proceedings against the legal heirs, as established by higher judicial pronouncements.

The High Court held that the transfer of assessment proceedings under Section 127(1) of the Income Tax Act, 1961, must adhere to the principle of natural justice, requiring an opportunity of hearing to be provided to the assessee. This principle can only be circumvented if the competent authority records reasons in writing for why a hearing is not possible. The Court found that the revenue had neither established that providing a hearing was impossible nor recorded any reasons for not doing so. The Court also noted that even in faceless assessment proceedings, the right to engage counsel cannot be evaded. Consequently, the impugned transfer orders and the notices issued in furtherance thereof were declared invalid and set aside. The assessment orders passed in some cases were also quashed. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still proposed, and to conclude proceedings within three months.

The High Court disposed of the writ petition without deciding the substantive issues. Instead, it directed the Principal Chief Commissioner of Income Tax, Jaipur, to decide the petitioner's pending representation within 30 days from the date of receipt of a copy of the order. The court's decision was based on the statement made by the respondents' counsel regarding the endeavor to decide the representation. No specific finding was made on the entitlement to interim relief or the merits of the substantive appeal, as the petition was disposed of procedurally. The operative direction was to decide the representation.

The High Court held that the transfer of assessment proceedings without providing the assessee an opportunity of being heard is a violation of the principles of natural justice, as enshrined in Section 127(1) of the Income Tax Act, 1961. The Court relied on its previous decision in Murliwala Agrotech Private Limited, which emphasized that adherence to natural justice is essential in adversarial proceedings like assessment/reassessment. The Court found that the respondents failed to demonstrate any circumstances that prevented them from providing a hearing or to record reasons for not doing so. Consequently, the impugned transfer orders and all consequential notices and assessment orders were declared invalid and set aside. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still contemplated, and to conclude proceedings within three months.

The High Court held that the transfer of assessment proceedings without providing the assessee an opportunity of being heard is a violation of the principles of natural justice, as enshrined in Section 127(1) of the Income Tax Act, 1961. The Court relied on its previous decision in Murliwala Agrotech Private Limited, which emphasized that adherence to natural justice is essential in adversarial proceedings like assessment/reassessment. The Court found that the respondents failed to demonstrate any circumstances that prevented them from providing a hearing or to record reasons for not doing so. Consequently, the impugned transfer orders and all consequential notices and assessment orders were declared invalid and set aside. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still contemplated, and to conclude proceedings within three months.

The High Court held that the transfer of assessment proceedings without providing the assessee an opportunity of being heard is a violation of the principles of natural justice, as enshrined in Section 127(1) of the Income Tax Act, 1961. The Court relied on its previous decision in Murliwala Agrotech Private Limited, which emphasized that adherence to natural justice is essential in adversarial proceedings like assessment/reassessment. The Court found that the respondents failed to demonstrate any circumstances that prevented them from providing a hearing or to record reasons for not doing so. Consequently, the impugned transfer orders and all consequential notices and assessment orders were declared invalid and set aside. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still contemplated, and to conclude proceedings within three months.

The High Court held that the transfer of assessment proceedings under Section 127(1) of the Income Tax Act, 1961, must adhere to the principle of natural justice, requiring an opportunity of hearing to be provided to the assessee. This principle can only be circumvented if the competent authority records reasons in writing for why a hearing is not possible. The Court found that the revenue had neither established that providing a hearing was impossible nor recorded any reasons for not doing so. The Court also noted that even in faceless assessment proceedings, the right to engage counsel cannot be evaded. Consequently, the impugned transfer orders and the notices issued in furtherance thereof were declared invalid and set aside. The assessment orders passed in some cases were also quashed. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still proposed, and to conclude proceedings within three months.

The High Court held that the transfer of assessment proceedings under Section 127(1) of the Income Tax Act, 1961, must adhere to the principle of natural justice, requiring an opportunity of hearing to be provided to the assessee. This principle can only be circumvented if the competent authority records reasons in writing for why a hearing is not possible. The Court found that the revenue had neither established that providing a hearing was impossible nor recorded any reasons for not doing so. The Court also noted that even in faceless assessment proceedings, the right to engage counsel cannot be evaded. Consequently, the impugned transfer orders and the notices issued in furtherance thereof were declared invalid and set aside. The assessment orders passed in some cases were also quashed. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still proposed, and to conclude proceedings within three months.

The High Court held that the ITAT's decision to delete the additions was not based on patent illegality or perversity. The Tribunal's findings were based on a reappreciation of the evidence on record, and the issue of whether transactions were bogus or genuine is essentially a finding of fact. The ITAT had noted that the AO failed to furnish details of the alleged fictitious entries, was unsure if they were profits or losses, and did not confront the assessee with these entries. The Tribunal also found that the assessee was not afforded an opportunity to cross-examine parties and that all transactions were made through the recognized stock exchange, with only STT charged. The ITAT concluded there was no evidence of commission/brokerage payment. The High Court found no perversity, patent illegality, or violation of statutory provisions by the ITAT, and therefore, the appeal did not involve any substantial question of law.

The High Court held that the transfer of assessment proceedings without providing the assessee an opportunity of being heard is violative of the principles of natural justice, as enshrined in Section 127(1) of the Income Tax Act, 1961. The Court referred to its own previous decision in Murliwala Agrotech Private Limited, which emphasized that adherence to natural justice is a sine qua non for such transfers. The Court noted that the revenue had neither demonstrated the impossibility of providing a hearing nor recorded any reasons for its omission. Consequently, the impugned transfer orders and any consequential notices or assessment orders were declared invalid and set aside. The respondents were permitted to resume proceedings from the stage prior to the impugned transfer orders, with a mandate to provide an opportunity of hearing if a transfer was still proposed, and to conclude proceedings within three months. The ratio is that a transfer of assessment proceedings under Section 127(1) must be preceded by an opportunity of hearing to the assessee, unless exceptional circumstances, duly recorded, prevent it.

The High Court held that notices and proceedings initiated against a dead person are a nullity. This legal position is no longer res integra, as confirmed by previous Division Bench orders of the Court. In a similar case, liberty was granted to the Department to re-initiate proceedings under Section 148A(b) and Section 159 of the IT Act, with a specific direction to exclude the period between the filing of the writ petition and its disposal from the computation of the limitation period for initiating such proceedings. The Court found no reason why the Department should not be given similar liberty to proceed against the legal representatives, provided the initial notices were within the period of limitation. Therefore, the petition was allowed, granting liberty to the Department to proceed in accordance with law by re-initiating proceedings.

The Tribunal held that the entire basis for reopening the assessment was indeed the material and information collected during the search conducted in the premises of another assessee. The collection of details relating to the search does not constitute new incriminating material independent of the original search findings. The Tribunal noted that the search was conducted in 2016, and the respondents had the authority to reopen the assessment under Section 153C read with Section 153A. However, this was not done within the limitation period prescribed by Section 153B. The recourse to Sections 148 and 148A was an attempt to overcome this statutory bar, which is not permissible. The revenue conceded that if the basis for reassessment is incriminating material collected during a search, the only legally permissible course is Section 153C, not Section 148. Therefore, the impugned orders passed under Section 148A(d) were quashed and set aside as they could not be sustained in law. No issue was expressly left undecided.

The Tribunal decided to dismiss the writ petition for non-prosecution. The reasoning was based on the submission by the petitioner's counsel that no instructions were received from the petitioner to pursue the case. The Tribunal granted liberty to the petitioner to file an application for recalling the order if the cause of action still survives. The ratio decidendi is that a writ petition can be dismissed for want of prosecution if the petitioner or their counsel is unable to proceed with the case due to lack of instructions or non-appearance, subject to the possibility of seeking recall of the order.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when incriminating material found during a search on a third party relates to the assessee, the provisions of Section 153C are specifically designed to govern such situations. The Court found the reliance on Section 148 to be misplaced in these circumstances. The Court distinguished the cited cases, noting that the Supreme Court's decision in Abhisar Buildwell P. Ltd. dealt with the absence of incriminating material from a search and the possibility of reassessment under Section 148 based on other sources, which is not the scenario here. The Court agreed with the assessees' reliance on the Karnataka High Court's Sri Dinakara Suvarna and Bombay High Court's M/s. Aditi Constructions, which held that Section 153C would prevail over Section 147/148 when search is on a third party. The Court explicitly stated that the first ground of challenge to the initiation of proceedings under Section 148 was accepted, and there was no need to address other grounds. The respondents were granted liberty to proceed against the petitioners in accordance with law. No issue was expressly left undecided.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.

The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, and the impugned orders are quashed. The Court reasoned that when seized material relates to or belongs to a person other than the one on whom the search is conducted or requisition is made, Section 153C is the appropriate provision to be invoked. The Court found that the revenue authorities had not demonstrated the satisfaction of the twin conditions for proceeding under Section 153C, which would then necessitate proceeding under Section 153A. The Court distinguished the reliance placed by the revenue on the Supreme Court's decision in M/s. M.R. Shah Logistics Pvt. Limited, stating that the specific issue of the interplay between Section 147/148 and Section 153C in cases of third-party seized material was not before the Supreme Court. Similarly, the decision in Abhisar Buildwell P. Ltd. was interpreted to mean that Section 148 can be used when there is an absence of incriminating material, not when Section 153C is the more specific and applicable provision. The Court also noted that the Single Bench decision in Vijay Kumar Mehta was rendered infructuous and did not have the benefit of the Abhisar Buildwell decision. The Court found the Madras High Court's decision in Saloni Prakash Kumar to be unhelpful as the field of applicability of the two sections was not the issue. The Court accepted the first ground of challenge regarding the initiation of proceedings under Section 148 and found no need to elaborate on other grounds. The revenue was granted liberty to proceed against the petitioners in accordance with law. The writ petitions were allowed.