Mr. Dharan v. Amit B. Borkar, Jj

Digitally signedby GAURIGAURIAMITAMITGAEKWADGAEKWADDate:2021.12.0114:16:26 +0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.3398 OF 2019 Bhagwanji Manji Patel ….Petitioner V/s. The Assistant Commissioner of Income Tax Central Circle 7 (3) and Ors. ….Respondents ---- Mr. Dharan V. Gandhi for petitioner.Mr. Sham V. Walve for respondents-Revenue. ---- CORAM : K.R. SHRIRAM & AMIT B. BORKAR, JJ. DATED : 29[th] NOVEMBER 2021 P.C. : 1Mr. Gandhi tenders affidavit in rejoinder of petitioner affirmedon 27[th] November 2021. The same is taken on record. Mr. Walve states thathe has received a copy thereof. 2 Petitioner is impugning a notice dated 27[th] March 2019 issued under Section 148 of the Income Tax Act, 1961 (the said Act) forAssessment Year 2012-2013 whereby Revenue has informed petitioner that it has reasons to believe that petitioner’s income chargeable to tax forAssessment year 2012-2013 has escaped assessment within the meaning ofSection 147 of the said Act. 3Petitioner filed objections and subsequently, an order dated14[th] November 2019 rejecting the objections have been passed and thisorder also has been impugned in this petition. 4Respondent has sought to reopen petitioner’s assessment afterexpiry of more than four years from the relevant assessment year andtherefore, the proviso to Section 147 of the Act shall apply. Respondent hasto make out a case while reopening, in the reasons for reopening, thatpetitioner had failed to fully and truly disclose material facts. We haveconsidered the reasons annexed to the petition and we are satisfied that it isnothing but a change of opinion which is not permissible in law. 5The entire basis of reopening is based on a search action thatwas carried out under Section 132 of the said Act on 9[th] October 2014 at theKamdhenu Group offices, their associates and residences of their Directors.Petitioner is one of the Director. Mr. Walve strongly opposed the petitionsaying that it is open to petitioner to take all steps available in law whilerespondent will be passing the assessment order after rejection ofobjections. 6Having heard both the counsels, in our view, the matter goes tothe root in as much as the exercise of jurisdiction by respondent is per seillegal. We say this because there is no tangible material which has beenplaced in the reasons for reopening the assessment. The basis is the searchaction carried out on 9[th] October 2014. Even the original assessment orderdated 23[rd] December 2016 in paragraph 2 provides for same search actionand based on the search action various amounts were added. Mr. Gandhistates that against that assessment order, an appeal was filed and the matter subsequently being settled and relies on a copy of the order dated20[th] March 2019 passed by CIT (A). 7Moreover, in the reasons for reopening, there is not even anattempt made to mention what material facts have not been disclosed. Thereopening is based on the records which petitioner had filed. In paragraph 3it is stated “The above information has been examined and finds that theassessee has claimed excessive expenses on account of sale/purchases/loansadvance from the above circular transaction and therefore, resulting intounder-assessment and therefore …………”. Respondent states that assesseehas claimed excessive expenses which resulted into under assessment.Therefore, there is no tangible material which has been mentioned in thereasons that has come to light after the last assessment order was passed. 8In the circumstances, petition is allowed in terms of prayer clause – (a) which reads as under : (a) that this Hon’ble Court may be pleased to issuea Writ of Certiorari or a Writ in the nature ofCertiorari or any other appropriate Writ, Order ordirection, calling for the records of the petitioner’scase and after going into the legality and propertythereof, to quash and set aside the said notice dated27[th] March 2019 (Exhibit “D”) and the subsequentorder dated 14[th] November 2019 (Exhibit “I”). 8In the circumstances, petition is allowed in terms of prayer clause – (a) which reads as under : (a) that this Hon’ble Court may be pleased to issuea Writ of Certiorari or a Writ in the nature ofCertiorari or any other appropriate Writ, Order ordirection, calling for the records of the petitioner’scase and after going into the legality and propertythereof, to quash and set aside the said notice dated27[th] March 2019 (Exhibit “D”) and the subsequentorder dated 14[th] November 2019 (Exhibit “I”). 9Petition disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.)