Wp/1066/2019 Of John Sebastian Zezito Lobo v. Assistant Commissioner Of Income Tax, Circle-2(1) Panaji And 2 Ors

Maria S. IN THE HIGH COURT OF BOMBAY AT GOAWRIT PETITION NO.1066 OF 2019 John Sebastian Zezito Lobo ..Petitioner VersusAssistant Commissioner of Income Tax, Circle-2(1), Panaji And 2 Ors...Respondents Mr. Kapil D. Kerkar, with Mr. T. Sequeira, Advocate forthe Petitioner. Ms. Amira A. Razaq, Standing Counsel for theRespondents. CORAM:DIPANKAR DATTA, CJ &M. S. SONAK, J. DATED:17[th ]August 2021 P. C. 1.A notice dated 26.03.2019 issued under Section 148 of theIncome Tax Act, 1961 (hereafter “the Act”, for short) is underchallenge in this writ petition on the ground that thejurisdictional fact for issuance of such notice is absent. 2.We have noted that after receipt of the impugned notice thepetitioner sought for the reasons for issuance thereof by his letterdated 04.06.2019; in pursuance thereof, the AssistantCommissioner of Income Tax by a communication dated 11.06.2019 furnished to the petitioner the reasons for reopening of assessment proceedings for the Assessment Year 2016-2017. Paragraphs 6 to 8 of the communication dated 11.06.2019 read as follows: '6. Basis of forming reason to believe and details of:escapement of income As per the submission, the assessee sold a property vide sale deed on 24.07.2015 for sale consideration of Rs.9,75,00,000 and offered only Rs.4,38,33,261 to tax as capital gain and hence there is Low capital gain with respect to sale consideration and Large deduction of Rs.84,30,421/- claimed is u/s 54F, high expenses of Rs.2,30,00,000 are claimed as cost of settlement of tenants. All of which needs to be verified. As verified from AST and ITS data, the assessee did not register the sale deed and thus escaped scrutiny for AY 2016-17 despite of high capital gains. Therefore, I am of opinion that the income has escaped assessment during the FY 2015-16 relevant to AY 2016-17. 7. Escapement of income chargeable to tax in relationto any assets (including financial interest in any entity)located outside India: 8. Applicability of the provisions of Section 147/151to the facts of the case: In this case, return of income has been filed by the assessee but the case was not selected for scrutiny for AY 2016-17. Accordingly, no assessment was made. In view ofthe facts mentioned in para-6 above, I have reason tobelieve that income to the extent of Rs.5,36,66,784/-, hasescaped assessment within the meaning of provisions of Section 147 of the I.T. Act in the hands of the above assessee for the asst. year 2016-17.' 3. Having received the aforesaid communication, thepetitioner lodged an objection by his representation dated04.12.2019 before the Assistant Commissioner of Income Taxurging several grounds. On the very same day, i.e., 04.12.2019,the petitioner presented this writ petition before this Courtwhereupon an interim order was passed on 17.12.2019 in termsof prayer clause (D). As a result thereof, no steps could be takenby the respondents pursuant to the impugned notice. 4.The writ petition has been listed today after exchange ofpleadings. 5.We have heard Mr. Kapil Kerkar, learned advocate for thepetitioner and Ms. Amira Razaq, learned Standing Counsel forthe respondents at some length. 6.We do not appreciate the attempt of the petitioner to havethe notice under Section 148 of the Act interdicted by presentingthis writ petition on the same day of lodging of objection to the 4.The writ petition has been listed today after exchange ofpleadings. 5.We have heard Mr. Kapil Kerkar, learned advocate for thepetitioner and Ms. Amira Razaq, learned Standing Counsel forthe respondents at some length. 6.We do not appreciate the attempt of the petitioner to havethe notice under Section 148 of the Act interdicted by presentingthis writ petition on the same day of lodging of objection to the notice by submitting a detailed reply. Obviously, the objectionwas intended to persuade the Assistant Commissioner to revokethe impugned notice. On the contrary, if indeed the petitionerperceived that there was no justification for the AssistantCommissioner to issue the impugned notice since thejurisdictional fact was absent, the petitioner could have raised thesaid point at the first instance before this Court prior tosubmitting to the jurisdiction of the Assistant Commissioner. Anerror of jurisdictional fact is a point on which an action forjudicial review could be maintained without relegating thenoticee to the notice issuing authority. In such event, the Courtcould have examined the point raised by the petitioner. However,the petitioner appears to have pursued the writ remedy as aparallel remedy, which is impermissible in law. Now, with thepleadings on record, it does appear to us, at least, prima facie, thatthe contention of the petitioner of an error of jurisdictional facthaving vitiated the proceedings initiated by the AssistantCommissioner is not tenable. 7.Mr. Kapil Kerkar contended that the finding of incomeassessable to tax having escaped the notice is baseless, since theAssistant Commissioner has proceeded on assumptions andpresumptions. 8.In course of hearing, we have been referred to the decisionsof the Hon'ble Supreme Court in GKN Driveshafts (India)Ltd. v/s. Income Tax Officer1and the decision in AssistantCommissioner of Income Tax v/s. Rajesh Jhaveri StockBrokers (P.) Ltd.2by Ms. Razaq.In GKN Driveshafts (India)Ltd. (supra), the Supreme Court upheld the order of the DelhiHigh Court dismissing a writ petition in which a similar noticeunder Section 148 of the Act was under challenge by observingthat the noticee ought to lodge objection to issuance of notice,after receiving the reasons for reopening of assessment, and thatthe Assessing Officer would be bound to dispose of the same bypassing a speaking order before proceeding with the assessment.In Rajesh Jhaveri Stock Brokers (P.) Ltd (supra), the SupremeCourt analysed the provisions of Section 147 of the Act andobserved that if the condition precedent for invocation of powersunder Section 147 read with Section 148 to 152 of the Act ispresent, i.e., there is prima facie finding that income assessable totax has escaped notice, it would be open to the assessing officer toproceed for reopening of the assessment proceedings. We also findfrom such decision that if the assessing officer has cause orjustification to know or suppose that income has escapedassessment, it can be said that he has reason to believe that an 1(2002) 125 Taxman 963 (SC) 2 (2007) 161 Taxman 316 (SC) income has escaped assessment. In such a case, the High Courtwould not be clothed with the jurisdiction to examine the reasonswhich weighed in the mind of the assessing officer to issue thenotice. As has correctly been contended by Ms. Razaq, this is notthe appropriate stage for the purpose of examining the reasonsassigned by the Assistant Commissioner. 9.In such view of the matter, we decline interference andrelegate the petitioner to the forum before the AssistantCommissioner. The impugned notice shall be taken to its logicalconclusion in accordance with law. If any adverse finding isrendered against the petitioner, obviously the same must have thesupport of reasons. Thereafter, the petitioner shall be at liberty toexplore his remedy in accordance with law. 10.The writ petition is disposed of on the aforesaid terms,without costs. Interim order, if any, stands vacated. 9.In such view of the matter, we decline interference andrelegate the petitioner to the forum before the AssistantCommissioner. The impugned notice shall be taken to its logicalconclusion in accordance with law. If any adverse finding isrendered against the petitioner, obviously the same must have thesupport of reasons. Thereafter, the petitioner shall be at liberty toexplore his remedy in accordance with law. 10.The writ petition is disposed of on the aforesaid terms,without costs. Interim order, if any, stands vacated. 11.All contentions on the notice as well as the proceedings areleft open. We make it clear that the observations made by us areonly for the purpose of deciding this writ petition. M. S. SONAK, J. CHIEF JUSTICE