Wp/1237/2022 Of Manan Trading Company Pvt. Ltd v. The Deputy Commissioner Of Income Tax-Central Circle 1(1) Mumbai And 2 Ors

GAURIAMITGAEKWAD Digitally signedby GAURI1/3AMITGAEKWADDate:2022.03.0910:43:07 +0530IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1237 OF 2022 Manan Trading Company Pvt. Ltd. ….Petitioner V/s. The Deputy Commissioner of Income TaxCentral Circle 1(1) and Ors. ….Respondents ---- Mr. Jignesh R. Shah for petitioner.Mr. Suresh Kumar for respondents. ---- CORAM : K.R. SHRIRAM &N.J. JAMADAR, JJ. DATED : 7[th] MARCH 2022 P.C.: 1Petitioner is impugning a notice dated 31[st] March 2021 issuedunder Section 148 of the Income Tax Act, 1961 (the Act) for AssessmentYear 2013-2014 and the order on objections dated 24[th] January 2022. 2Admittedly, the notice has been issued more than four yearsafter the expiry of the relevant assessment year and since the assessmenthas been completed under Section 143(3) of the Act, the proviso to Section147 of the Act shall apply and the onus is on respondent to show that there has been failure on the part of petitioner to truly and fully disclose materialfact for assessment. 3We have considered the reasons recorded for reopening withthe assistance of Mr. Shah and Mr. Suresh Kumar. We are satisfied that thereasons recorded for reopening are purely based on change of opinion andnot due to any failure on the part of petitioner to disclose any material fact. Paragraph 2.2 of the reasons read as under : 2.2. It is seen from the P&L account that the assessee hasshown a total turnover/gross receipt of Rs.1699.07 lakhs.However, the then AO in the assessment order u/s. 143(3) ofthe Act dated 26.03.2016 had added back 1% of the totalturnover/sales to the total income of the assessee. Asinformation received from a reliable source, as gross profitmay be higher than what the then AO has added in theassessment order at least 5% of the total turnover/sales haveto be added back to the total income in this case. Hence, theincome has escaped assessment to the extent ofRs.67,96,281/- within the meaning of Section 147 of theIncome Tax Act, 1961. The details of which is shown asunder : Total Turnover/sales : Rs.16,99,07,027/- 5% of Rs.16,99,07,027 (A) - 84953511% of Rs.16,99,07,027 (B) - 16,99,070Different (A-B) - 67,96,281 4Therefore, the Assessing Officer says that the Assessing Officer who did the original assessment proceedings under Section 143(3) of theAct added back only 1% of the total turnover/sales to the total income ofthe assessee instead of adding back 5%. This indicates clear change ofopinion. Moreover, there is nothing to indicate why it should be 5%. 5In the circumstances, we are satisfied that the notice dated31[st] March 2021 and the impugned order dated 24[th] January 2022 has to bequashed and set aside. 6Petition 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 under Article 226 of the Constitution of India, calling for the records of the Petitioner’s caseso far as they relate to the impugned notice dated31.3.2021 under section 148 (Exhibit K) and theimpugned order dated 24.1.2022 (Exhibit P) andafter going through and examining the question ofthe legality, validity and propriety thereof, bepleased to quash and set aside the said notice dated31.3.2021 under section 148 (Exhibit K) to reopenthe petitioner’s assessment for the assessment year2013-14 together with the order dated (Exhibit P)dealing with the petitioner’s objections. 7Petition disposed accordingly with no order as to costs. (N.J. JAMADAR, J.) (K.R. SHRIRAM, J.)