High Court of Gujarat Examines Whether Reopening of Assessments Under Section 148 Based on Search Material is Permissible Without Invoking Section 153C. Core Legal Question Involves Overriding Effect of Search-Related Special Provisions Over General Reassessment Provisions Under the Income-tax Act, 1961.

Writ petitions challenging notices issued under Section 148 of the Income-tax Act, 1961 for reopening assessments based on material obtained from search proceedings, alleging that the Assessing Officer ought to have proceeded under Section 153C instead.

Petitioners sought quashing of the impugned notices under Section 148 and direction to follow the procedure under Section 153C.

The Assessing Officer issued notices under Section 148 based on material obtained during search without recording satisfaction and following the procedure under Section 153C, which the petitioners contend is mandatory.

Whether, upon receipt of material from search proceedings, the Assessing Officer is mandatorily required to proceed under Section 153C of the Income-tax Act, 1961, or can resort to the general provisions of Sections 147/148 for reassessment. Whether the non-obstante clause in Section 153C overrides Sections 147/148, making it a special provision that excludes the general reassessment provisions.

Petitioners argued that Section 153C of the Income-tax Act casts a mandatory obligation to transmit material to the Assessing Officer of the other person, and upon transmission, proceedings under Section 153C are triggered, and the Assessing Officer cannot choose Sections 147/148; Sections 153A and 153C are special provisions with non-obstante clauses overriding general reassessment provisions; the legislative intent is to exclusively apply Section 153C for search-based assessments; CBDT Circular No. 24/2015 mandates recording satisfaction. Revenue argued that it is not mandatory to invoke Section 153C in all cases where information originates from search; the non-obstante clause does not bar assumption of jurisdiction under Sections 147/148.

The core issue raised in the present petitions is the legality of directly invoking the provisions of Sections 147/148 of the Act based on material obtained during a search conducted under Sections 132/132A of the Act, without resorting to proceedings under Section 153A or 153C of the Act. (Para 4) Section 153C of the Act casts a mandatory obligation upon the Assessing Officer of the searched person to hand over books of account, documents or assets seized or requisitioned during the search, which belong to or pertain to a person other than the searched person, to the Assessing Officer having jurisdiction over such other person. (Para 8) It is a settled principle of statutory interpretation that where a special provision governs a particular subject matter, the applicability of a general provision to that subject matter stands impliedly excluded. (Para 11) the core issue arising for consideration in the present group of petitions is whether, where documents or information relating to a person other than the searched person have originated from or are gathered during a search under Section 132 ... it is mandatory for the Assessing Officer to invoke and assume jurisdiction under Section 153C for assessment of such other person or not, and whether the non-obstante clause in Section 153C bars the assumption of jurisdiction under Sections 147/148 in such cases or not. (Para 19)

The petitions were filed challenging the notices issued under Section 148 of the Income-tax Act, 1961, which were based on material obtained from search proceedings under Section 132/132A. The Assessing Officers had issued these notices without initiating proceedings under Section 153C, prompting the petitioners to contend that the mandatory procedure under Section 153C was bypassed. The High Court heard the group of petitions.

• Income-tax Act, 1961: 147, 148, 153A, 153C, 132, 132A, 153D, 153B(1)(ii)