Mumbai City-Ix v. Jhaveri Investments

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 423 OF 2001 The Commissioner of Income Tax Mumbai City-IX ..Appellant vs. Jhaveri Investments & Finance Consultants ..Respondents Mr.P.S.Sahadevan for appellant. Ms.Usha Dalal i/b Mr.P.R.Toprani for respondents. CORAM: Dr.S.RADHAKRISHNAN & S.J.KATHAWALLA JJ.21stJuly 2008 CORAM: Dr.S.RADHAKRISHNAN & S.J.KATHAWALLA JJ. S.J.KATHAWALLA JJ. S.J.KATHAWALLA JJ. 21st P.C. P.C. 1. Heard the learned Counsel appearing for the parties. 2. The present appeal has been admitted on the following substantial questions of law on 20th April, 2004. i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Assessing Officer did not have the jurisdiction to reopen the assessment overlooking the fact that the assessing officer had recorded reasons as to the escapement of income chargeable to tax and made specific reference to letter dated 30.5.1996 received from the Assistant Commissioner of Income Tax Central Circle 57. ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in allowing the income to raise the additional ground against levy of interest under Sections 234A, 234B and 234C and allowing the same by holding the levy as invalid?" 3. We have perused the judgment of Tribunal dated 19th February, 2001. As far as the first question of law is concerned, on perusal of the reasoning in paragraphs 10 to 12 it is explicitly clear that the Assessing Officer had not recorded proper reasons which were mandatorily required before issuing notice for reopening under sec.147 of the Income Tax Act and the Tribunal has rightly observed that at the most reasons indicated therein are of the nature of conjectures and suspicion. In view thereof the Tribunal has rightly taken a view that the order of reopening of assessment under sec.147 is without jurisdiction. 4. As far as the second question of law is concerned, in para 14 of the aforesaid judgment, the Tribunal has taken a view that levy of interest under sections 234A to 234C is clearly answered against the revenue and in favour of the Assessee by the Hon’ble Supreme Court in the case of Ranchi Club Ltd. Vs. C.I.T. reported in 247 ITR 209. In view thereof there is no substance in the above appeal and the same stands dismissed. KATHAWALLA J.) (Dr.S.RADHAKRISHNAN J.) (S.J.KATHAWALLA J.) (Dr.S.RADHAKRISHNAN J.) (S.J KATHAWALLA J.) (Dr.S.RADHAKRISHNAN J.) (S.J