Dr. Pradeep Sihare v. Income Tax Officer, Ward -1(1), Mahima Complex, Vyapar Vihar, Bilaspur

2025:CGHC:7230 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 7129 of 2008 1 - Dr. Pradeep Sihare, Aged About 53 Years, S/o Shri G.P Sihare, R/o NiralaNagar, Bus Stand, Bilaspur (CG) ... Petitioner(s) versus 1 - Income Tax Officer, Ward -1(1), Mahima Complex, Vyapar Vihar, Bilaspur (CG) 2-Additional Commissioner of Income Tax, Range-1, Mahima Complex,Vyapar Vihar, Bilaspur (CG) ... Respondent(s) For Petitioner(s) :Mr. Neelabh Dubey, Advocate For Respondent(s):Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Choudhary, Advocate Digitallysigned bySHYNASHYNA AJAYDate:AJAY2025.02.1312:53:57+0530 SB.: Hon'ble Mr. Justice Deepak Kumar Tiwari Order On Board 10/02/2025 1. The petitioner would assail the legality and validity of the Notice(s)issued under Section 148 of the Income Tax Act, 1961 (for short “theAct”) and subsequent notices issued under Section 143(2) and 142(1) ofthe Act as the same are issued without jurisdiction and also barred bylimitation.issued under Section 148 of the Income Tax Act, 1961 (for short “theAct”) and subsequent notices issued under Section 143(2) and 142(1) ofthe Act as the same are issued without jurisdiction and also barred bylimitation. 2. At the outset, learned counsel for the petitioner would submit that hewould not press the ground of limitation. The only submission of learnedcounsel for the petitioner is that as no proceeding was pending relating tothe Assessment Years 2001-2002, 2002-2003 and 2003-2004, theAssessing Officer had no jurisdiction to issue commission under Section131 of the Act to the District Valuation Officer. He would further submitthat a proper satisfaction was not recorded for reopening of the caseunder Section 147 of the Act in respect of the said Assessment Years.Therefore, on this score, the aforesaid notices are per se illegal as thesame has been issued without proper application of mind by theAssessing Officer. For the above submisssion, learned counsel wouldplace reliance on the matter of Commissioner of Income Tax Vs.Nevendram Ahuja, reported in MANU/MP/0162/2005. Learnedcounsel for the petitioner would submit that the powers have been usedin an arbitrary manneras the Assessing Officer has only referred to theopinion of the DEO, which is per se not sufficient. For this proposition,learned counsel for the petitioner would place reliance on the matter ofwould not press the ground of limitation. The only submission of learnedcounsel for the petitioner is that as no proceeding was pending relating tothe Assessment Years 2001-2002, 2002-2003 and 2003-2004, theAssessing Officer had no jurisdiction to issue commission under Section131 of the Act to the District Valuation Officer. He would further submitthat a proper satisfaction was not recorded for reopening of the caseunder Section 147 of the Act in respect of the said Assessment Years.Therefore, on this score, the aforesaid notices are per se illegal as thesame has been issued without proper application of mind by theAssessing Officer. For the above submisssion, learned counsel wouldplace reliance on the matter of Commissioner of Income Tax Vs.Nevendram Ahuja, reported in MANU/MP/0162/2005. Learnedcounsel for the petitioner would submit that the powers have been usedin an arbitrary manneras the Assessing Officer has only referred to theopinion of the DEO, which is per se not sufficient. For this proposition,learned counsel for the petitioner would place reliance on the matter of the Assistant Commissioner of Income Tax Vs. Dhariya ConstructionCo., (2010) 328 ITR 515 (SC). He would further submit that forreopening of the case, while exercising powers under Section 147 of theAct, only change of opinion is not sufficient as there is no power ofreview of the income already assessed. However, the Assessing Officerhas the power under the said Section to reopen assessment providedthere is tangible material to come to the conclusion that there isescapement of income from assessment. Hence, the order passed by theAssessing Officer for reopening of the case is non-speaking andperfunctory in natureand further, the jurisdiction has also not beenexercised in a proper manner. In view of the above submission, learnedcounsel would place reliance on the matter of Income Tax Officer, Ward No.16(2) Vs. Techspan India Private Limited and another,(2018) 6 SCC 685, in which, the following was held in para 14 to 17 : “14. The language of Section 147 makes it clear thatthe assessing officer certainly has the power toreassess any income which escaped assessment forany assessment year subject to the provisions ofSections 148 to 153. However, the use of this poweris conditional upon the fact that the assessing officerhas some reason to believe that the income hasescaped assessment. The use of the words “reason tobelieve” in Section 147 has to be interpretedschematically as the liberal interpretation of the wordwould have the consequence of conferring arbitrarypowers on the assessing officer who may even initiatesuch reassessment proceedings merely on his changeof opinion on the basis of same facts andcircumstances which has already been considered byhim during the original assessment proceedings. Suchcould not be the intention of the legislature. The saidprovision was incorporated in the scheme of the IT Act so as to empower the assessing authorities toreassess any income on the ground which was notbrought on record during the original proceedings andescaped his knowledge; and the said fact would havematerial bearing on the outcome of the relevantassessment order.” “15. Section 147 of the IT Act does not allow thereassessment of an income merely because of the factthat the assessing officer has a change of opinion withregard to the interpretation of law differently on thefacts that were well within his knowledge even at thetime of assessment. Doing so would have the effect ofgiving the assessing officer the power of review andSection 147 confers the power to reassess and not thepower to review.” “16. To check whether it is a case of change ofopinion or not one has to see its meaning in literal aswell as legal terms. The words “change of opinion”imply formulation of opinion and then a changethereof. In terms of assessment proceedings, it meansformulation of belief by an assessing officer resultingfrom what he thinks on a particular question. It is aresult of understanding, experience and reflection.” “17. It is well settled and held by this Court in acatena of judgments and it would be sufficient torefer to CIT v. Kelvinator of India Ltd. (2010) 2 SCC723, (2010) 320 ITR 561, wherein this Court has heldas under: “5...… where the assessing officer has reasonto believe that income has escaped assessment,confers jurisdiction to reopen the assessment.Therefore, post-1-4-1989, power to reopen is muchwider. However, one needs to give a schematicinterpretation to the words “reason to believe”….Section 147 would give arbitrary powers to theassessing officer to reopen assessments on the basisof “mere change of opinion”, which cannot be per sereason to reopen.” 6. We must also keep in mind the conceptualdifference between power to review and power toreassess. The assessing officer has no power to “5...… where the assessing officer has reasonto believe that income has escaped assessment,confers jurisdiction to reopen the assessment.Therefore, post-1-4-1989, power to reopen is muchwider. However, one needs to give a schematicinterpretation to the words “reason to believe”….Section 147 would give arbitrary powers to theassessing officer to reopen assessments on the basisof “mere change of opinion”, which cannot be per sereason to reopen.” 6. We must also keep in mind the conceptualdifference between power to review and power toreassess. The assessing officer has no power to review; he has the power to reassess. Butreassessment has to be based on fulfilment of certainprecondition and if the concept of “change ofopinion” is removed, as contended on behalf of theDepartment, then, in the garb of reopening theassessment, review would take place.” 7. One must treat the concept of “change ofopinion” as an in-built test to check abuse of powerby the assessing officer. Hence, after 1-4-1989,assessing officer has power to reopen, provided thereis “tangible material” to come to the conclusion thatthere is escapement of income from assessment.Reasons must have a live link with the formation ofthe belief.” 3. Per contra, learned counsel for the respondents would oppose thesubmissions of learned counsel for the petitioner and would submit thatthe concerned Officer was having jurisdiction under Sections 147 and148 of the Act to initiate reassessment proceeding whenever the incomehas escaped assessment. He would submit that when a notice underSection 148 of the Act is issued, the assessee has the right only to seek acopy of the notice, which would explain the reasons behind issuing suchnotice. In the present case, on 29.8.2008, all the reasons have beendisclosed to the assessee with regard to all the three relevant AssessmentYears i.e. 2001-2002, 2002-2003 and 2003-2004 through a writtencommunication. He submits that a Survey under Section 133A of theAct was conducted on 8.7.2003 in the professional premises of theassessee. During the course of survey, the assessee declared Rs.5 lakhsunder the head construction of his nursing home as well as his residentialunit. However, when the valuation was done through District ValuationOfficer, a huge difference of income emerged and it was found that the assessee has escaped the income and therefore, the notices have beenissued. He would further submit that the assessee has raised objectionfor reopening of the aforesaid cases, however, the same has beendecided by a speaking order dated 12.12.2008. He would lastly submitthat a proper procedure has been followed by the Revenue and theproceeding is at the notice stage and moreover, the final order would beappealable under Section 246A of the Act. Hence, learned counsel forthe respondents prays to dismiss the petition. 4. Heard learned counsel for the parties and also perused the documentsannexed with the petition.annexed with the petition. 5. Admittedly, a Survey was conducted under Section 133 of the Act on8.7.2003. During the said Survey, a report has been sought from theDEO with regard to construction of the Nursing Home as well asresidential unit made by the assessee. From the report of the DEO, it hasbeen revealed that certain unexplained amount of investment has beenmade. It was further revealed that the expenditure incurred shown by theassessee was much below the assessed cost of the construction. Soconsidering this clear difference in the cost of construction, a reason tobelieve has been recorded by the Assessing Officer in respect of thesubject Assessment Years and the case was reopened by exercising thepowers vested in him under Section 147 of the Act. Even though theAssessee had raised objections for reopening, however, the same wasturned down by a speaking order dated 12.12.2008. Thus, it is explicitthat the Assessing Officer has recorded the reasons in view of the report of the District Valuation Officer. Moreover, the Survey conductedreveals that the assessee has not truly disclosed his income chargeable totax which has escaped assessment for the relevant Financial Years. 6. The case law (Nevendram Ahuja {supra}) which has been relied uponby learned counsel for the petitioner is distinguishable on facts. In thesaid case, there was no assessment proceeding pending with regard tothe Assessment Year 1990-91 and the commission was issued prior to thecommencement of the Assessment Year i.e. on 29.11.1989 and in suchpremise, it has been observed in para 15 therein that the AssessingOfficer can issue a commission only if a proceeding is pending beforehim. 7. So far as the judgment in the matter of Techspan India Private Limitedand another (supra) relied upon by learned counsel for the petitioner isconcerned, in my view, the same is also of no help to the petitioner,inasmuch as, in the present case, a Survey was conducted, in which, theAssessing Officer has found sufficient tangible material for reopening ofthe case. In such circumstances, when the assessee has undervalued anyincome, the Assessing Officer has jurisdiction to take appropriate actionby issuing commission. 8. For the foregoing reasons, this Court is of the opinion that the AssessingOfficer has recorded his own valid and proper satisfaction for existenceof reason to believe that the income of the relevant assessment years hasescaped assessment. Thus, the notice cannot be treated to have beenpassed without jurisdiction. Even otherwise, the petitioner would getOfficer has recorded his own valid and proper satisfaction for existenceof reason to believe that the income of the relevant assessment years hasescaped assessment. Thus, the notice cannot be treated to have beenpassed without jurisdiction. Even otherwise, the petitioner would get full opportunity to raise his defence in the appellate proceedings. 9. Accordingly, the Petition being bereft of any merit is liable to be and ishereby dismissed.hereby dismissed. 10.It is made clear that any of the observations made in this order shall notcome in the way of deciding the statutory appeal as in this petition, thisCourt, in its writ jurisdiction, has only examined the scope ofinterference.come in the way of deciding the statutory appeal as in this petition, thisCourt, in its writ jurisdiction, has only examined the scope ofinterference. Sd/- (Deepak Kumar Tiwari) Judge Shyna