Wp/2523/2010 Of Shree Siddhivinayak Ganapati Temple Trust v. Deputy Director Of Income Tax (Exemptions) I-2, Mumbai And 2 Ors

* 1 * IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2523 OF 2010ALONGWITHWRIT PETITION NO. 46 OF 2011 Shree Siddhivinayak Ganapati Temple, ........PetitionerTrust, MumbaiV/S.Asst. Director of Income Tax (Exemptions)I-2, Mumbai and 2 Ors........Respondents * * * * Mr. S.Y. Inamdar, Advocate for the petitioner. Mr. Suresh Kumar, Advocate for the respondents. * * * * CORAM :- J.P. DEVADHAR, & SMT. R.P. SONDURBALDOTA, JJ. 13 June, 2011. P.C. :- 1. Rule. Returnable forthwith. By consent, the petitions are taken up for final hearing. 2. These two petitions are filed to challenge the two notices * 2 *W.P. 2523.2010 & W.P. 46.2011 13.6.2011 both dated 24[th] March, 2010 issued under Section 148 of the Income Tax Act, 1961 seeking to reopen the assessment for Assessment Years 2003-04 and 2004-05 respectively. The petitioners Assessment Years 2003-04 and 2004-05 respectively. The petitioners have also challenged the orders rejecting the objections raised by the petitioner for reopening of the assessment. the petitioner for reopening of the assessment. 3. The petitioner is a trust reconstituted and managed under the Shree Siddhi Vinayak Ganpati Temple Trust (Prabhadevi) Act, 1980.1980. 4. In the Assessment Years in question, assessment orders were passed without the benefits under Section 10(23C)(v) of the Income Tax Act, 1961 as the application seeking exemption under Section 10(23C)(v) of the Income Tax Act, 1961 filed by the petitioner Trust was pending and not disposed off. 10(23C)(v) of the Income Tax Act, 1961 filed by the petitioner Trust was pending and not disposed off. 5. The application filed by the petitioner was subsequently disposed off by the CCIT, in view of the powers conferred upon it pursuant to the amendment to Section 10(23C)(v) by Finance Act, it pursuant to the amendment to Section 10(23C)(v) by Finance Act, 2007 with effect from 2004. To give effect to the order of CCIT, the assessment was rectified by the Assessing Officer on 11[th] April, the assessment was rectified by the Assessing Officer on 11[th] April, 2008 by invoking the powers under Section 154 of the Income Tax * 3 *W.P. 2523.2010& W.P. 46.2011 13.6.2011 Act, 1961. 6. By the impugned notices dated 24[th] March, 2010 the assessments for A.Y. 2003-04 and 2004-05 are sought to be reopened on the ground that Section 154 cannot be applied in the instant case as it is not a mistake which is apparent from the record, which is a mandatory clause for considering any application under Section 154 of the Income Tax Act, 1961.assessments for A.Y. 2003-04 and 2004-05 are sought to be reopened on the ground that Section 154 cannot be applied in the instant case as it is not a mistake which is apparent from the record, which is a mandatory clause for considering any application under Section 154 of the Income Tax Act, 1961. * 3 *W.P. 2523.2010& W.P. 46.2011 13.6.2011 Act, 1961. 6. By the impugned notices dated 24[th] March, 2010 the assessments for A.Y. 2003-04 and 2004-05 are sought to be reopened on the ground that Section 154 cannot be applied in the instant case as it is not a mistake which is apparent from the record, which is a mandatory clause for considering any application under Section 154 of the Income Tax Act, 1961.assessments for A.Y. 2003-04 and 2004-05 are sought to be reopened on the ground that Section 154 cannot be applied in the instant case as it is not a mistake which is apparent from the record, which is a mandatory clause for considering any application under Section 154 of the Income Tax Act, 1961. 7. In the present case, the assessments are being reopened beyond four years from the end of the relevant assessment years and therefore the reopening of the assessments can be upheld only if there was failure on the part of the Assessee to disclose, fully and wholly, all material facts necessary for the assessments. In the present case, the reasons recorded for reopening the assessments do not disclose any failure on the part of the Assessee to disclose, fully and wholly, all material facts necessary for the purpose of assessments. Admittedly, the application made by the petitioner seeking exemption under Section 10(23C) of the Act was pending on the date of passing of the original assessment orders. Failure on the part of the respondents to dispose off the beyond four years from the end of the relevant assessment years and therefore the reopening of the assessments can be upheld only if there was failure on the part of the Assessee to disclose, fully and wholly, all material facts necessary for the assessments. In the present case, the reasons recorded for reopening the assessments do not disclose any failure on the part of the Assessee to disclose, fully and wholly, all material facts necessary for the purpose of assessments. Admittedly, the application made by the petitioner seeking exemption under Section 10(23C) of the Act was pending on the date of passing of the original assessment orders. Failure on the part of the respondents to dispose off the * 4 *W.P. 2523.2010& W.P. 46.201113.6.2011 said application cannot be attributed to the petitioner. In these circumstances, in the absence of any failure on the part of the petitioner to disclose fully and wholly all material facts necessary for the purpose of assessment, the reopening of the assessment beyond four years from the end of the relevant assessment years cannot be sustained. In the result, the notices both dated 24[th ]March, 2010 are quashed and set aside. Rule is made absolute in the above terms with no order as to costs. [SMT. R.P. SONDURBALDOTA, J] [J.P. DEVADHAR, J]