Mr. Dharan v. Gauri Gaekwad

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONWRIT PETITION NO.3023 OF 2019 Dilip Bhagirathmal Jiwrajka ….Petitioner V/s. The Deputy Commissioner of Income TaxCentral Circle 6(2) and Ors. ….Respondent WITHWRIT PETITION NO.3181 OF 2019Ashok Bhagirathmal Jiwrajka ….Petitioner V/s. The Deputy Commissioner of Income TaxCentral Circle 6(2) and Ors. ….Respondent WITHWRIT PETITION NO.3615 OF 2019Surendra Bhagirathmal Jiwrajka ….Petitioner V/s. The Deputy Commissioner of Income TaxCentral Circle 6(2) and Ors. ….Respondent ---- Mr. Dharan V. Gandhi for petitioner in all petitions.Mr. Suresh Kumar for respondents in all petitions. ---- CORAM : K.R. SHRIRAM &N.R. BORKAR, JJ. DATED : 15[th] MARCH 2022 P.C.: WRIT PETITION NO.3023 OF 2019 1Petitioner is impugning a notice dated 31[st] March 2019 forAssessment Year 2012-2013 issued under Section 148 of the Income TaxAct, 1961 (the Act) and also an order on objections dated 3[rd] October 2019filed by petitioner for reopening the assessment. 1 On 27[th] January 2022 the following order came to be passed : 1. Mr. Suresh Kumar filed an affidavit of one Mr. SaurabhYadav, Deputy Commissioner of Income Tax, Central Circle6(2), Mumbai affirmed on 24[th] January, 2022. Mr. SaurabhYadav admits in his affidavit that there are errors in ColumnNo.8 and 9 of the Form for re-opening but according to himthese are bonafide mistakes. Mr. Yadav has no personalknowledge. Mr. Yadav is not the person who either filled upthe Form for re-opening or the Additional CIT whorecommended or the Principal CIT who granted the approval.Hence, we are not inclined to and do not accept theexplanation of Mr. Yadav. The three persons, i.e., one Mr.Trilochan Singh Khalsa who was DCIT at that time or Mr.Ashok Pophare, Additional CIT who recommended theissuance of approval and Ms. Irina Garg who was thePrincipal CIT who granted the approval should have filed theaffidavit and not some third party who was not at allinvolved at the relevant time. 2. Since it is the issue of revenue of the State (the question ofincome alleged to have escaped assessment is Rs.60,79,604/-), we direct the then DCIT, CC-6(2), MumbaiMr. Trilochan Singh Khalsa, Mr. Ashok Pophare AdditionalCIT, CR-6, Mumbai and Ms. Irina Garg, Principal CIT, Central-3, Mumbai who are the officers who have signed on the Formfor re-opening under Section 151 of the Act, to explain thebasis on which re-opening was approved when the form haderrors. If these three officers or any of them is not in service,such person need not file the affidavit but the others in thatcase will mention when this person retired in their respectiveaffidavit. 3. The affidavits in compliance with the order dated21[st] December, 2021, to be filed within three weeks fromtoday. 4. In the order dated 21 st December, 2021 in Paragraph No.1the words "Schedule 8 and Schedule 9" be corrected to readas "Column 8 and Column 9". Rest of the order remainsunaltered. 5. Stand over to 28[th] February, 2022. 6. Ad-interim relief, if any, to continue till the next date. 3In compliance with the order, three officers mentioned therein, viz., Mr. Trilochan Singh Khalsa, Mr. Ashish V. Pophare and Ms. Irina Garg have also filed affidavits. In all the affidavits, they admit that form forapproval under Section 151 of the Act submitted by the Assessing OfficerMr. Trilochan Singh Khalsa had mistakes. In the affidavit filed by Mr. Trilochan Singh Khalsa, paragraphs 5 and 6 read as under : 4. In the order dated 21 st December, 2021 in Paragraph No.1the words "Schedule 8 and Schedule 9" be corrected to readas "Column 8 and Column 9". Rest of the order remainsunaltered. 5. Stand over to 28[th] February, 2022. 6. Ad-interim relief, if any, to continue till the next date. 3In compliance with the order, three officers mentioned therein, viz., Mr. Trilochan Singh Khalsa, Mr. Ashish V. Pophare and Ms. Irina Garg have also filed affidavits. In all the affidavits, they admit that form forapproval under Section 151 of the Act submitted by the Assessing OfficerMr. Trilochan Singh Khalsa had mistakes. In the affidavit filed by Mr. Trilochan Singh Khalsa, paragraphs 5 and 6 read as under : 5. Notwithstanding the above, it is submitted that the repliesto queries in Cols.8 and 9 are inadvertent and bonafidemistakes. The bonafide nature of the mistake is apparentfrom the fact that the query in Col.7 “Whether the assessmentis proposed to be made for the first time” has been answeredas “No” and in the first paragraph itself of the reasonsrecorded details of return filed have been correctlymentioned. This shows that the undersigned and thecompetent authority were well aware that a return of incomewas filed earlier. 6. It is submitted that the answer to Col.8(a) should havebeen “Yes” and no information was required to be filled inCol.9. Barring this inadvertent mistake, all other informationin the Form and reasons is correct. It is, therefore, requestedthat the aforesaid inadvertent and bonafide mistakes maykindly be condoned as approval was granted on the basis ofreasons recorded alone. In the affidavit filed by Mr. Ashish V. Pophare, paragraphs 5 and 6 read as under : 5. Notwithstanding the above, it is submitted that asmentioned by the undersigned and the Principal CIT, approvalwas granted on the basis of reasons recorded. It is furthersubmitted that the replies to queries in Cols.8 and 9 areinadvertent and bonafide mistakes. The bonafide nature ofthe mistake is apparent from the fact that the query in Col.7“Whether the assessment is proposed to be made for the firsttime” has been answered as “No” and in the first paragraphitself of the reasons recorded details of return filed have beencorrectly mentioned. This shows that the undersigned and thePrincipal CIT were aware that a return of income was filedearlier and scrutiny assessment was also completed in thiscase. 6. It is further submitted that the aforesaid inadvertent andbonafide mistakes may be condoned as the proposal forreopening was recommended for approval on the basis ofreasons recorded alone wherein the facts are correctlymentioned. In the affidavit filed by Ms. Irina Garg, paragraphs 5 and 6 read as under : 5. Notwithstanding the above, it is submitted that asmentioned by the undersigned, approval was granted on thebasis of reasons recorded. As per section 151(1), the approval for reopening was givenon the basis of reasons recorded by the AO, wherein therewas application of mind. However, if there is any procedural error/mistake in filling ofthe Form by the AO, the same may kindly be treated asinadvertent because no such lapse occurred on the electronicfiling of the proposal. 6. I tender unconditional apology to this Hon’ble High Courtfor inadvertent bonafide mistake.” 4 Therefore, respondents admit that the sanction granted under In the affidavit filed by Ms. Irina Garg, paragraphs 5 and 6 read as under : 5. Notwithstanding the above, it is submitted that asmentioned by the undersigned, approval was granted on thebasis of reasons recorded. As per section 151(1), the approval for reopening was givenon the basis of reasons recorded by the AO, wherein therewas application of mind. However, if there is any procedural error/mistake in filling ofthe Form by the AO, the same may kindly be treated asinadvertent because no such lapse occurred on the electronicfiling of the proposal. 6. I tender unconditional apology to this Hon’ble High Courtfor inadvertent bonafide mistake.” 4 Therefore, respondents admit that the sanction granted under Section 151 of the Act was on the basis of incorrect information provided tothem. At the same time, if Mr. Ashish Pophare and Ms. Irina Garg had readthe reasons submitted alongwith the form, they would have certainly foundout the error. We have to also note that in the reasons for reopening, there isno mention about the assessment of petitioner having been completedunder Section 153A read with Section 143(3) of the Act. In form 151, theamount mentioned as income originally assessed is Rs.6,01,66,964/-,whereas income originally assessed was Rs.11,11,34,621/-. We are also ofthe opinion that the Additional CIT and Principal CIT, viz., Mr. Ashish V.Pophare and Ms. Irina Garg, have mechanically accorded permission. We areof the opinion that even if only these two officials had read the reportcarefully alongwith the reasons recorded, this admitted error would nothave crept in. The important safeguards provided in Sections 147 and 151 were lightly treated by the Officers. They appear to have taken the dutyimposed on them under these provisions as of little importance. We findsupport for this view in Chhugamal Rajpal V/s. S. P. Chaliha & Ors.[1] 5This Court in German Remedies Limited V/s. DeputyCommissioner of Income Tax[2] has held that while granting approval it wasobligatory on the part of the Commissioner to verify whether there was anyfailure on the part of the assessee to disclose full and true relevant facts inthe return of income filed for the assessment of income of that assessmentyear. It was also obligatory on the part of the Commissioner to considerwhether or not power to reopen is being invoked properly. In our view, theapproval granted suffers from non application of mind. 6In the circumstances, the notice dated 31[st] March 2019 issuedunder Section 148 of the Act is required to be quashed and set aside and ishereby quashed and set aside. 7Petition accordingly disposed. WRIT PETITION NO.3181 OF 2019WITHWRIT PETITION NO.3615 OF 2019 8Mr. Gandhi states that in these two petitions also the facts arealmost identical to Writ Petition No.3023 of 2019 and we say almostidentical because the figures ofcourse vary. Since we have allowed WritPetition No.3023 of 2019, these two petitions are also allowed. 1. 1971 (79) ITR 603 SC 9Both petitions disposed accordingly. 10Mr. Suresh Kumar states that liberty be given to issue fresh notice under Section 148 of the Act. 11If permissible in law, nothing can come in the way of theRevenue to issue fresh notice. We are not making any comments thereon. (N.R. BORKAR, J.) (K.R. SHRIRAM, J.)