Wp/3232/2019 Of Kismati Ghanshyam Yadav v. The Income Tax Officer - 16 (2) (4) And 2 Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.3232 OF 2019 Kismati Ghanshyam Yadav ….Petitioner V/s. The Income Tax Officer – 16 (2) (4) & Ors. ….Respondents ---- Mr. Mandar Vaidya for petitioner.Mr. Suresh Kumar for respondents. ---- CORAM : K.R. SHRIRAM & AMIT B. BORKAR, JJ. DATED : 20[th] DECEMBER 2021 P.C. : 1This petition is impugning a notice dated 30[th] March 2019issued under Section 148 of the Income Tax Act, 1961 (the said Act) for Assessment Year 2012-2013 and the order rejecting petitioner's objectionspassed on 28[th] October 2019. 2Since the reopening is proposed after the expiry of four yearsfrom the end of relevant assessment year and the original assessment orderhas been passed under Section 143(3) read with Section 147 of the said Act,the proviso to Section 147 of the said Act shall apply in as much asrespondents have to show that there was a failure on the part of assessee todisclose truly and fully all material facts necessary for assessment. 3The reasons recorded read as under : Reasons recorded for reopening the assessment u/s. 147 ofthe Income Tax Act, 1961 :- “On verification of the case records it was found that duringthe F.Y. 2011-12 relevant to the A.Y. 2012-13 the assessee hasshown agricultural income of Rs.15,25,850/- in its return ofincome. The cash from the agricultural income has beendeposited by the assessee in its bank account. The assesseehas shown an opening cash balance of Rs.10,60,062/- forA.Y. 2012-13. However, on verification of the records it isfound that the assessee has not filed its return of income forA.Y. 2011-12 u/s 139(1) of the I.T. Act. The assessment forA.Y. 2011-12 was reopened u/s 148 of the I.T. Act and theopening cash balance and the agricultural income shown bythe assessee along with other cash deposits was added backto the total income. The assessee could not furnish a valid explanation for theagricultural income and the opening cash balance for A.Y.2012-13 was uncertain in view of the assessment proceedingin the assessee’s case for A.Y. 2011-12, the entire agriculturalincome shown by the assessee of Rs.15,25,850/- and theopening cash balance of Rs.10,60,062/- for A.Y. 2012-13remains unexplained. Therefore, I have reason to believe that the income arisingout of the income shown as agricultural income ofRs.15,25,850/- and the opening cash balance ofRs.10,60,062/-, totalling to the extent of Rs.25,85,912/- hasescaped assessment for the A.Y. 2012-13. ………..” 4From the reasons, it is obvious that respondent has come to a conclusion that there has been escapement of income chargeable to tax onthe basis that entire agricultural income shown by the assessee ofRs.15,25,850/- and the opening cash balance of Rs.10,60,062/- remainsunexplained. 5First of all, one cannot cull out from the reasons that there hasbeen really any failure to fully and truly disclose. Moreover, the agriculturalincome of Rs.15,25,850/- has been considered in the assessment orderdated 27[th] March 2015 by the Assessing Officer while computing the totalGauri Gaekwad income of the assessee. Therefore, it cannot be alleged that there was anynon disclosure by assessee. As regards the opening cash balance of Rs.10,60,062/- forAssessment Year 2012-2013, for Assessment Year 2011-2012 the AssessingOfficer has already added Rs.10,19,238/- as unexplained cash credit underSection 68 of the said Act. Moreover, the opening balance cannot be theincome for that particular year. At the most it can be considered as incomefor the previous year. On these two grounds itself we will hold that thenotice dated 30[th] March 2019 issued under Section 148 of the said Act is notvalid and is without jurisdiction. 6Petition is allowed in terms of prayer clause - (a), which reads as under : income of the assessee. Therefore, it cannot be alleged that there was anynon disclosure by assessee. As regards the opening cash balance of Rs.10,60,062/- forAssessment Year 2012-2013, for Assessment Year 2011-2012 the AssessingOfficer has already added Rs.10,19,238/- as unexplained cash credit underSection 68 of the said Act. Moreover, the opening balance cannot be theincome for that particular year. At the most it can be considered as incomefor the previous year. On these two grounds itself we will hold that thenotice dated 30[th] March 2019 issued under Section 148 of the said Act is notvalid and is without jurisdiction. 6Petition is allowed in terms of prayer clause - (a), which reads as under : (a) that this Hon’ble Court may be pleased to issue a writ ofcertiorari or writ in the nature of certiorari or any otherappropriate writ, direction or order under Article 226 of theConstitution of India calling for the records of the caseleading to the issuance of the notice under Section 148 of theIncome Tax Act, 1961 dated 30[th] March 2019, being Ex-Khereto and after going through the same and examining thequestion of legality thereof to quash, cancel and set aside theimpugned notice dated 30[th] March 2019 being Ex-K heretoand the order rejecting the petitioner’s objections dated28[th] October 2019, being Ex-O hereto. 7Petition disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.)