D.b. Special Appeal Writ v. Asst Commissioner Of Income Tax, Circle-2, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Special Appeal Writ No. 1993/2017 Faraday Electricals Pvt Ltd. having registered office at 36-GopalBari, Ajmer Road through Abhinav Saboo S/o Mr. S. K. Sabooaged about 46 years R/o 36-Gopal Bari, Ajmer Road ----Appellant Versus 1. Asst Commissioner Of Income Tax, Circle-2, Jaipur. 2. Dy. Commissioner of Income Tax, Circle-2, Jaipur. ----Respondents For Appellant(s) : Mr. Sanjay Jhanwar with Mr. Prakhul KhuranaFor Respondent(s): Mr. Anuroop Singhi HON'BLE MR. JUSTICE KALPESH SATYENDRA JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Order 24/07/2018 1.By way of this appeal, the appellant has challenged thejudgment and order of the learned Single Judge whereby thelearned Single Judge has dismissed the writ petition filed by thepetitioner-appellant herein. 2.Counsel for the appellant has relied upon the decision ofDelhi High Courtin Sabh Infrastructure Ltd vs. AssistantCommissioner of Income Tax, WP(C) No. 1357/2016decided on 25.09.2017 wherein it has been held as under:- “In the facts of this case, the primary facts havenot been shown to be false. The five companiesdo exist. They did subscribe to the share capital ofthe Petitioner. They did pay the money to thePetitioner. All the five companies are assessed totax. These are the primary facts. The reasons tobelieve rely upon a letter received from thenot been shown to be false. The five companiesdo exist. They did subscribe to the share capital ofthe Petitioner. They did pay the money to thePetitioner. All the five companies are assessed totax. These are the primary facts. The reasons tobelieve rely upon a letter received from the Investigation Wing and Mr. Chaudhary submitsthat this letter was in fact an investigation report.The report does not form part of the reasons andneither was it annexed to the reasons.Interestingly, even the counter affidavit is silentas to the material which has not been disclosedby the Petitioner. The counter affidavit merelystates that the information was specific and theinformation would be provided to the Petitionerduring the assessment proceedings. Thus, if theRevenue had any basis to show that the primaryfacts were incorrect, the same ought to have beenset out in the reasons to believe. That has notbeen done in the present case. 19. Before parting with the case, the Court wouldlike to observe that on a routine basis, a largenumber of writ petitions are filed challenging thereopening of assessments by the Revenue underSections 147 and 148 of theAct and despitenumerous judgments on this issue, the sameerrors are repeated by the concerned Revenueauthorities. In this background, the Court wouldlike the Revenue to adhere to the followingguidelines in matters of reopening ofassessments: (i) while communicating the reasons forreopening the assessment, the copy of thestandard form used by the AO for obtainingthe approval of the Superior Officer shoulditself be provided to the Assessee. Thiswouldcontainthecommentorendorsement of the Superior Officer withhis name, designation and date. In otherwords, merely stating the reasons in aletter addressed by the AO to the Assesseeis to be avoided; (ii) the reasons to believe ought to spellout all the reasons and grounds availablewith the AO for re-opening the assessment- especially in those cases where the firstproviso to Section 147 is attracted. Thereasons to believe ought to alsoparaphrase any investigation report whichmay form the basis of the reasons and anyenquiry conducted by the AO on the sameand if so, the conclusions thereof; (iii)where the reasons make a reference toanother document, whether as a letter orreport, such document and/ or relevantportions of such report should be enclosedalong with the reasons; (ii) the reasons to believe ought to spellout all the reasons and grounds availablewith the AO for re-opening the assessment- especially in those cases where the firstproviso to Section 147 is attracted. Thereasons to believe ought to alsoparaphrase any investigation report whichmay form the basis of the reasons and anyenquiry conducted by the AO on the sameand if so, the conclusions thereof; (iii)where the reasons make a reference toanother document, whether as a letter orreport, such document and/ or relevantportions of such report should be enclosedalong with the reasons; (iv) the exercise of considering theAssessee’s objections to the reopening ofassessment is not a mechanical ritual. It is a quasi- judicial function. The orderdisposing of the objections should deal witheach objection and give proper reasons forthe conclusion. No attempt should be madeto add to the reasons for reopening of theassessment beyond what has already beendisclosed.” 3.He has also relied upon a circular which has been issued bythe Central Board of Direct Taxes dated 10.01.2018 andcontended that taking into consideration the observations madeby the Delhi High Court and guidelines issued as per the circular,the order of the Tribunal is liable to be quashed and set aside. 5.At this stage, counsel for the respondent contended thatguidelines are subsequent to the reopening of the issue which issubject matter of petition filed on 14[th] December, 2017. 6.In our considered opinion, in the fitness of the things, it willbe open for the appellant to raise all objections previous andadditional within a period of one week i.e. on or before 1[st]August, 2018 before the AO and the same will be considered anddecided taking into consideration, the law prevailing as on today.We hope that reasonable time will be granted to the appellantby AO to challenge the order, if the same is decided against theappellant. 6. The appeal is allowed to the aforesaid extent. (VIJAY KUMAR VYAS),J (K. S. JHAVERI),J B.M.G/Gourav/56