Wp/212/2012 Of Smt. Manju Gupta v. Assistant Commissionr Of Income Tax Circle16(1) And 3 Ors

sas 1 wp212-12 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.212 OF 2012 Smt. Manju Gupta ..Petitioner. V/s. Assistant Commissioner of Income Tax, Circle 16(1), Mumbai & Ors...Respondent. Mr. Jitendra Jain with Deepak Rai i/b. Negandhi, Shah & Himayatullah for the petitioner. Mr. Suresh Kumar for the respondents. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATED : 3RD APRIL, 2012 P.C. :- 1.This writ petition is filed to challenge the notice dated 29/3/2011 issued under Section 148 of the Income Tax Act, 1961 (‘the Act’ for short) to reopen the assessment for AY 2005-06 and also to challenge the order dated 2[nd] December, 2011 whereby the objections raised by the assessee for reopening of the assessment has been rejected. 2 wp212-12 2.In the present case, the impugned notice dated 29[th ]March,2011 is issued by the assessing officer to reopen the assessment for the year 2005-06 by recording the following reasons:- “ It has to the notice that Ms. Manju Gupta, the assessee, assessed in this circle has done sale of shares worth Rs.5,84,285/- through M/s. Alliance Finvest Securities Private Limited and sale of shares worth Rs.7,20,270/- through M/s. Goldstar Finvest Securities Pvt. Ltd. The sale has been shown to claim long term capital gain and which is claimed as exempt. Therefore, to the extent of Rs.13,04,555/- the income has escaped assessment for tax. Accordingly, the assessment for 2005-06 is reopened under Section 147 of the IT Act. “ 3.As per the proviso to Section 147 of the Act, reassessment proceedings beyond four years from the end of the relevant assessment year cannot be initiated unless the income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. 4.In the objections raised on 1[st] December, 2011, the assessee specifically contended that the reasons recorded do not allege any failure on the part of the assessee to disclose material facts relevant for the assessment and, therefore, the reopening of the assessment beyond four years from the end of the relevant assessment year is invalid. 5.In the order dated 2[nd] December, 2011 rejecting the objections raised by the assessee, the assessing officer has not dealt with the above objections raised by the assessee. Hence the impugned order dated 2[nd] December, 2011 is quashed and set aside and the matter is restored to the file of the assessing officer for passing fresh order on the objections raised by the assessee. 6.It is relevant to note that the assessing officer in his affidavit in reply to the Writ Petition has stated that from the letter dated 7[th] March, 2011 issued by the Deputy Director of Income Tax (Investigation), Unit-1(4), Mumbai he came to know that the alleged sale of shares by the assessee through M/s. Alliance Intermediaries & Network (P) Ltd. and M/s.Goldstar Finvest Securities Pvt. Ltd. did not actually take place and that these companies had only provided the accommodation entries to the assessee. If these material facts, which go to the root of the matter were available with the assessing officer on the date of issuance of the impugned notice dated 29[th] March, 2011, why the same were not reflected in the reasons recorded for reopening of the assessment, is the question. Whether it is a case of dereliction of duty or sheer negligence or callousness on the part of the assessing officer is a matter which needs consideration. 4 wp212-12 4 wp212-12 7.In these circumstances, while directing the assessing officer to pass fresh order within a period of two weeks from today on the objections raised by the assessee, we direct the Chief Commissioner, Circle 16(1), Mumbai to investigate as to whether the reassessment proceedings have been handled by the assessing officer efficiently so as to protect the interests of the revenue and submit a report to that effect to this Court within a period of 3 weeks from today. 8.It is made clear that if the fresh order to be passed by the assessing officer on the objections raised is adverse to the assessee, then the same shall not be given effect for a period of four weeks from the date of communication of the order disposing of the objections raised by the assessee and till then, the reassessment proceeding shall remain stayed. 8.Writ Petition is disposed off in the above terms with no order as to costs. (M.S. SANKLECHA I, J.) (J.P. DEVADHAR, J.)