Wp/24214/2021 Of Ms Kavitha Jain v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 16[TH|]DAY OF FEBRUARY 202)BEFORE THE HON BLE MR.JUSTICE S. SUNIL DUTT YADAV| #WRIT PETITION No.24214/2021 (TIT) BETWEEN: MS. KAVITHA JAINWIFE OF SRI PUSHPARAJ JAIN.AGED ABOUT 39 YEARS,NO.6-6/22,NEAR EDEN SPORTS CLUB, EDEN GARDEN, NANTHOOR,MANGALURU - 575 OOS._ PETITIONER (BY SRI VIKRAM HUILGOL, SENIOR ADVOCATE A/W_ SRI BALRAM R. RAO, ADVOCATE) 1.DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, MANGALORE - 575 OO1. 2.INCOME TAX OFFICER, WARD 2(1),| MANGALORE - 575 OO1..RESPONDENTS (BY SRI K.V. ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 2276 &22/7 OF CONSTITUTION OF INDIA, PRAYING TO QUASH THENOTICE PASSED U/S 148 OF THE ACT DATED 31.03.2021 FOR|THE ASSESSMENT YEAR 2017-18 IN DIN AND LETTER VIDE)ANNEXURE-E AND ETC.. THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY,THE COURT MADE THE FOLLOWING: ORDER The petitioner has sought for issuance of writ of.certiorari to quash the notice passed under Section 148 ofthe Income Tax Act,1961 (‘the Act’, for short) dated31.03.2021 for the assessment year 2017-18 issued by thesecond respondent. 2. The petitioner nas sought for issuance of writ of|certiorari to quash the order rejecting the objections. Tnepetitioner has also challenged the invocation of Section 147.of the Act. 3. The learned Senior Counsel appearing for the.petitioner submits that the notice under Section 148 cameto pe issued seeking to re-assess the income of tnepetitioner and that the petitioner has sought for necessaryreasons for initiating Section 148 proceedings after havingfiied tne return. 4. It is pointed out that objections were filed as|regards to the reasons for re-opening the proceedings andthe said objections Nave been rejected at Annexure-'N.. | 5. It is pointed out that the statement of the nusband_of the petitioner on 02.02.2017 has been relied upon by theDepartment wnhicn its the basis for their 148 notice. In thestatement of 02.02.2017, the nNusband of the petitioner isstated to have declared suppression of income of thepetitioner of Rs.20 Lakns for the financial year 2016-17. | 6. It is further submitted tnat tne said statement nas|been retracted by the husband of the petitioner on08.08.2018, copy of which is enclosed at Annexure-C.Accordingly, it is submitted that there are no justifiable|reasons for re-opening the assessment by resort toSection 148. 7. Reliance is placed on the judgment of this court in)tneCaSCOT CommissionerofIncome|TaxV, Dr.N.Thippa Setty reported tn (2010) 230 CTR 265(Karnataka). | 8. The learned counsel for revenue nas produced the|records. 9. Perused the materials relating to the reason for ©re-opening the assessment in the case of the petitioner atPara 6 under the caption“Basis of forming reasons tobelieve and details of escapement of income”which would|reveal that the sole reason for initiating the proceedings isthe statement made by tne husband of the petitioner andthere is no other reason that comes out from the record. 10. The observation at Para 6 of the said report isextracted below: ~Sri.PusnparajJain,Husband|OT tneAssessee in the course of statement u/s131.recorded during Survey u/s 133A, Nas in his.Capacity as Managing Director of the Company.deciared an additional income of Rs.20,00,000/-|in the hands of Smt.Kavitha Jain, the Assessee,| for tne A.Y.201/7-18. Tne Assessee nad not!declared the additional income of Rs.20,00,000/-_attributed to the above declaration in her Returnof Income filed for the AY 2017-18. Hence,there is escapement of income to the extent of.Rs.20,00,000/- for the AY 2017-18. Hence, I have reason to believe thatincome of the Assessee of Rs.20,00,000/-|cChargeabie to tax nas escaped assessmentwithin the meaning of explanation of Section (Db)of Section 147 of the Income Tax Act, 1961.’ 11. It is to be noticed that for the purpose of | ~Sri.PusnparajJain,Husband|OT tneAssessee in the course of statement u/s131.recorded during Survey u/s 133A, Nas in his.Capacity as Managing Director of the Company.deciared an additional income of Rs.20,00,000/-|in the hands of Smt.Kavitha Jain, the Assessee,| for tne A.Y.201/7-18. Tne Assessee nad not!declared the additional income of Rs.20,00,000/-_attributed to the above declaration in her Returnof Income filed for the AY 2017-18. Hence,there is escapement of income to the extent of.Rs.20,00,000/- for the AY 2017-18. Hence, I have reason to believe thatincome of the Assessee of Rs.20,00,000/-|cChargeabie to tax nas escaped assessmentwithin the meaning of explanation of Section (Db)of Section 147 of the Income Tax Act, 1961.’ 11. It is to be noticed that for the purpose of | re-opening the assessment in terms of Section 148, the —Only reason its the statement of the husband of thepetitioner which admittedly has been retracted. | 12. This court wnile dealing with similar question nas|observed under similar circumstances tnat retraction of tne.statement had resulted in absence of any material towarrant re-opening of the case against the assessee. 13. As there is no material available on record for.initiating the proceedings under Section 148, the impugnedorder at Annexure-'N’ is set aside and consequently thenotice at Annexure- E Is set aside. Sd/-. JUDGE Np/-|