Jitendrakumar Shantilal Sheth v. Oral Order

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 19285 of 2021 ==========================================================JITENDRAKUMAR SHANTILAL SHETH VersusINCOME TAX OFFICER, WARD-1 , PALANPUR ==========================================================Appearance:MR JIMI S PATEL(10578) for the Petitioner(s) No. 1MR MR BHATT FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 11/01/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.By this writ application under Article 226 of the Constitutionof India, the writ applicant – an assessee has prayed for thefollowing reliefs: “14. In the premises aforesaid, the petitioner prays that: (A)this Hon’ble Court may be pleased to call for therecords of the proceedings, look into them and bepleased to issue a writ of certiorari or any otherappropriate writ, order or direction quashing theimpugned 148 notice at Annexure B and the orderdisposing the objections at Annexure-G.records of the proceedings, look into them and bepleased to issue a writ of certiorari or any otherappropriate writ, order or direction quashing theimpugned 148 notice at Annexure B and the orderdisposing the objections at Annexure-G. (B)this Hon’ble Court may be pleased to issue a writ ofmandamus or any other appropriate writ, order ordirection asking the respondent not to proceedfurther in pursuance of Section 148 notice atAnnexure-B and the order rejecting the objectionsat Annexure-G.mandamus or any other appropriate writ, order ordirection asking the respondent not to proceedfurther in pursuance of Section 148 notice atAnnexure-B and the order rejecting the objectionsat Annexure-G. (C)Pending the hearing and final disposal of thisapplication, this Hon’ble Court may be pleased tostay further proceedings in pursuance of sectionapplication, this Hon’ble Court may be pleased tostay further proceedings in pursuance of section 148 notice at Annexure-B. (D)This Hon’ble Court be pleased to grant any furtheror other relief of this Hon’ble Court deems just andproper in the interest of justice, andor other relief of this Hon’ble Court deems just andproper in the interest of justice, and (E)This Hon’ble Court be pleased to allow thisapplication with costs against the respondent.” 2.We need not delve much into the facts of this case as ourtwo orders dated 04.01.2022 and 10.01.2022 respectively wouldmake the picture abundantly clear. The order passed by this Courtdated 04.01.2022 reads thus: “1. We have heard Mr. Jimi Patel, the learned counselappearing for the writ applicant. 148 notice at Annexure-B. (D)This Hon’ble Court be pleased to grant any furtheror other relief of this Hon’ble Court deems just andproper in the interest of justice, andor other relief of this Hon’ble Court deems just andproper in the interest of justice, and (E)This Hon’ble Court be pleased to allow thisapplication with costs against the respondent.” 2.We need not delve much into the facts of this case as ourtwo orders dated 04.01.2022 and 10.01.2022 respectively wouldmake the picture abundantly clear. The order passed by this Courtdated 04.01.2022 reads thus: “1. We have heard Mr. Jimi Patel, the learned counselappearing for the writ applicant. 2 The writ applicant seeks to challenge the notice ofreopening issued under Section 148 of the Income Tax Act,1961 for the A. Y. 2017-18. The assessment is sought to bere-opened on the ground that the assessee filed his return ofincome on 13th September 2017 declaring total income ofRs.42,65,501/-. The return was processed under Section143(1) of the Act. The Assessing Officer received informationduring the course of the assessment proceedings of oneanother assessee namely Tapas Elegance (a partnership firmin which the writ applicant himself is one of the partners) thatthe writ applicant herein had deposited cash of Rs.26,50,000/-during the demonetization in the current accountNo.1070006437127 of the partnership firm maintained withthe Ahmedabad District Cooperative Limited. It is the case ofthe writ applicant that the ground on which the assessment issought to be reopened is incorrect. It has been very stronglyasserted that no such amount referred to above wasdeposited by the writ applicant at any point of time in thecurrent account maintained by the partnership firm. Whilepassing an order overruling the objections raised by the writapplicant – assessee, the Assessing Officer observed asunder: “(A) Re-opening of assessment on wrong facts:- Atthe outset, in para 3, it is stated in your objection that the re-opening is factually incorrect as theassessee did not deposit cash of Rs.26,50,000/- inthe bank account. In your objection, it is stated that the cash ofRs.26,50,000/- was not deposited into the bankaccount during the F.Y. 2016-17. In this regard, it maybe noted the information on which the notice u/s. 148of the Act is issued is obtained from the jurisdictionalAO of Tapas Elegance LLP, having PAN: - . During the assessment proceedings ofthe said firm, that AO found that the assessee, being apartner in the above firm introduced capital in the saidfirm during the F.Y. 2016-17. Further, it was also foundthat cash of Rs.26,50,000/- was deposited during thedemonitization period relevant to A.Y. 2017- 18. It hasbecome clear that the assessee entered into certainfinancial transactions during the period with TapasElegance LLP. Thus, if we combine all the facts, it canbe alleged that there has been some nexus betweenthe assessee and Tapas Elegance LLP and not merelynexus, there occurred certain financial transactionsbetween these two person. Therefore, in view of theabove fact, the AO has rightly issued notice u/ s 148 ofthe Act which is correct, legal and valid. In view of the above facts, the question raised bythe assessee is not acceptable as neither the notice isfactually incorrect nor it is bad in law. As far as thegravity of the case will be viewed during theassessment proceedings.” 3. Let Notice be issued to the respondent, returnable on10th January 2022. Mr. Jimi Patel, the learned counselappearing for the writ applicant, at the earliest, shall furnishone set of his entire paper book to Mr. Karan Sanghani, thelearned counsel who would be assisting Mr. M. R. Bhatt, thelearned Senior Counsel appearing for the Revenue. In view of the above facts, the question raised bythe assessee is not acceptable as neither the notice isfactually incorrect nor it is bad in law. As far as thegravity of the case will be viewed during theassessment proceedings.” 3. Let Notice be issued to the respondent, returnable on10th January 2022. Mr. Jimi Patel, the learned counselappearing for the writ applicant, at the earliest, shall furnishone set of his entire paper book to Mr. Karan Sanghani, thelearned counsel who would be assisting Mr. M. R. Bhatt, thelearned Senior Counsel appearing for the Revenue. 4.We request Mr. Sanghani to call for the necessaryinformation as regards the assertion on the part of the writapplicant that the entire premise on which the assessment issought to be reopened is incorrect. 5. On the returnable date, notify this matter on top of theBoard.” The order dated 10.01.2022 passed by this Court reads thus: “1. We have heard Mr. Jimi Patel, the learned counselappearing for the writ applicant and Mr. M.R. Bhatt, thelearned Senior Counsel appearing for the Revenue. 2. Mr. Bhatt, brought to our notice that the writ applicant herein has a savings account in his individual name maintained withthe Adarsh Co-operative Bank Limited. The bank statement ofthe Adarsh Co-operative Bank Limited, which has beenproduced before us, would indicate that the cash to the tune ofRs.26,50,000/- during the F.Y. 2016-17 relevant to the A.Y.2017-18 was deposited by the writ applicant herein in hissavings account maintained with the Adarsh Cooperative BankLimited. 3. In view of the aforesaid, prima facie, the reasons assignedby the AO in the Notice dated 19.05.2021, Annexure - D, atPage 44 does not seem to be correct. In the Notice, it hasbeen stated that the writ applicant in his capacity as one of thepartners of a partnership firm deposited amount ofRs.26,50,000/- in cash in the current account of thepartnership firm, maintained with the Ahmedabad DistrictCooperative Bank Limited. It is further clarified that the currentaccount referred to in the order assigning reasons is alsoinfact the personal account of the writ applicant and not that ofthe partnership firm. 4. Mr. Bhatt, made a request to keep this matter tomorrow toenable him to take appropriate further instructions. 5. Post this matter on 11.01.2022 on top of the Board.” 4.Today, when the matter was taken up for further hearing, Mr.M.R. Bhatt, learned senior counsel appearing for the Revenuefairly submitted that a mistake has been committed in issuing theimpugned notice under Section 148 of the Income Tact Act for reopening of the assessment. 5.In view of the aforesaid, the impugned notice dated31.03.2021, Annexure B is hereby quashed and set aside. Thiswrit application stands disposed of accordingly. (J. B. PARDIWALA, J) Y.N. VYAS (NISHA M. THAKORE,J)