Shivshankar Shivram Singh And Others v. Assistant Commissioner Of Income Tax, Circle 23(1) And Another

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (LODG.) NO.715 OF 2013 Shivshankar Shivram Singh and othersversusAssistant Commissioner of Income Tax,Circle 23(1) and another ..... Ms. A. Vissanji with Mr. S.J. Mehta for the Petitioners.Mr. Tejveer Singh for the Respondents. ..... ..Petitioners. ..Respondents. CORAM : DR.D.Y.CHANDRACHUD, ANDA.A. SAYED, JJ. 20 March 2013. P.C. : Rule, by consent made returnable forthwith. Counsel appearing on behalf of the Respondents waives service on behalf of the Respondents. By consent, the Petition is taken up for hearing and final disposal. 2.In these proceedings under Article 226 the Petitioner has sought to question the legality of a notice dated 28 March 2012 issued by the Assessing Officer under Section 148 of the Income Tax Act 1961 seeking to reopen the assessment for Assessment Year 2005-06. The reasons on the basis of which the Assessing Officer has sought to reopen the assessment is that after an order of assessment was passed under Section 143(3) on 28 December 2007, a survey action under Section 133A was conducted on 18 January 2011. The assessee's representative by a letter dated 24 January 2011 submitted details of the cost of construction and total sales for each Assessment Year from 2005-06 to 2009-10. Upon the perusal of the details, the Assessing Officer has taken the consolidated figure of the total sales (Rs.42,13,580/-) and deducted therefrom the cost of construction (Rs.27,36,117/-) to arrive at the profit of Rs.14,77,463/-. According to the Assessing Officer, the income for Assessment Year 2005-06 (Rs.14,77,463/-) is less than the income from business as shown in the return (Rs.4,70,190/-) showing a difference of Rs.10,07,273/-. On this ground, the Assessing Officer has held that he has reason to believe that income has escaped assessment. 3.The reopening has taken place beyond a period of four years of the end of the relevant Assessment Year. In view of the proviso to Section 147, the issue is as to whether there was any failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment for Assessment Year. During the course of the hearing counsel appearing on behalf of the assessee has relied upon Exhibit A-1 to the Petition which is the Construction and Profit and Loss Account for 2005-06. The total turnover is Rs.42.13 lacs which corresponds to the sales figure mentioned by the Assessing Officer. The cost of construction is shown as Rs.27.36 lacs which corresponds to the figure which has been adopted by the Assessing Officer. The Assessing Officer has, however, not considered the administrative and other expenses and depreciation in his reasons for reopening. As Exhibit A-1 would indicate the profits before taxation were Rs.4,52,685/-. The total income of the assessee after the addition of income from other sources is Rs.4,70,185/- (rounded off to Rs.4,70,190/-). The is exactly the figure which is reflected in the order of the Assessing Officer while recording reasons. We have referred to these facts because the admitted material on the record would indicate that there was absolutely no failure on the part of the assessee to disclose all the material facts necessary for the assessment. As a matter of fact, the figures on which the Assessing Officer places reliance in his order dated 10 January 2013 disclosing the reasons exactly correspond to what is disclosed by the assessee in the Profit and Loss Account and in the statement showing the computation of the total income. We therefore find merit in the contention of counsel appearing on behalf of the assessee that in the present case there was no failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment. As a matter of fact, figures as disclosed by the assessee correspond to what is reflected in the impugned order dated 10 January 2013. Since the jurisdictional condition for the reopening of an assessment under Section 147 beyond a period of four years has not been fulfilled, this Petition would have to be allowed. We accordingly allow the Petition and make the rule absolute by setting aside the impugned notice dated 28 March 2012. There shall be no order as to costs. (Dr. D.Y.Chandrachud, J.) (A.A. Sayed, J.)