Wp/3267/2019 Of Novelty Properties And Investment Pvt. Ltd v. Assistant Commissioner Of Income Tax Circle 2 (2)(2), Mumbai And 2 Ors

Digitally signed1/5by GAURIGAURIAMITAMITGAEKWADGAEKWADDate:by GAURIGAURIAMITAMITGAEKWADGAEKWADDate:2021.11.15IN THE HIGH COURT OF JUDICATURE AT BOMBAY10:37:29 +0530ORDINARY ORIGINAL CIVIL JURISDICTION10:37:29 +0530ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.3267 OF 2019 Novelty Properties & Investment Pvt. Ltd. ….Petitioner V/s. Assistant Commissioner of Income Tax, Circle – 2 (2) (2), Mumbai & Ors. ….Respondents ---- Mr. Madhur Agrawal i/b. Mr. Atul K. Jasani for petitioner.Mr. P.C. Chhotaray for respondents – Revenue. ---- CORAM : K.R. SHRIRAM &AMIT B. BORKAR, JJ. DATED : 29[th] OCTOBER 2021 AMIT B. BORKAR, JJ. P.C. : 1Petitioner is impugning notice dated 31[st] March 2019 and orderdated 30[th] October 2019 on various grounds and one of the primary groundbeing that there is no reason to believe that income chargeable to tax hasescaped assessment. Since the header in the annexure to the approval under Section151 of the said Act annexed to the petition is not legible, Mr. Agrawaltenders a fresh print out of the same, which is taken on record and marked“X” for identification. Petitioner to annex this document alongwith thedocument annexed to the petition during the course of today. Re-verificationdispensed with. 2According to petitioner, the notice issued is bad in law andinvalid because the requirements under Section 147 of the Income Tax Act,1961 (the said Act), have not been satisfied before issuing the impugned notice. According to petitioner, the reasons, which were given alongwith theimpugned notice clearly pertains to some other assessee and not petitioner.Mr. Agrawal submitted that subsequently also two further reasons have beengiven to petitioner, one being signed by officer who has issued the originalnotice and the second being signed by succeeding officer but the approval,which has been issued under Section 151 of the said Act, is based onreasons pertaining to some other assessee and not petitioner. There is nofresh approval for two further reasons which have been given to petitioner.Mr. Agrawal submitted that on this ground alone, the petition should beallowed. 3No reply has been filed by respondents. On 6[th] December 2019,almost two years ago, Mr. Chhotaray appearing for respondents had soughttime to take instructions and file affidavit in reply and at his instance, thepetition was stood over to 7[th] February 2020. Mr. Chhotaray stated thatreply could not be filed earlier due to COVID pandemic. The COVIDpandemic and lock down was declared on or about 25[th] March 2020whereas time was granted to file reply on 6[th] December 2019 and the replywas to be filed by 7[th] February 2020. Therefore, the excuse of COVIDpandemic is not acceptable and cannot be correct. There are so many othermatters where respondents have filed reply and in many matters they arecontinuing to file reply. Therefore, this is not a valid excuse and request forfurther time was rejected. Almost two years according to us is sufficient timefor respondents to file an affidavit in reply. We have also to note with regret that respondents in almost every matter are giving not more than one tothree working days for assessee to respond to their notices and in somecases, the assessee is directed to, within two or three days file documentsrunning into thousand of pages or many third party documents which has tobe collected from third parties. Such unreasonable notices have been issuedeven during lock down period, assessment orders are passed rejecting therequest for adjournment without considering the submissions made ordocuments filed and without even granting personal hearing. Since we didnot grant further time, Mr. Chhotaray agreed to argue on the basis ofdocuments filed with the petition. that respondents in almost every matter are giving not more than one tothree working days for assessee to respond to their notices and in somecases, the assessee is directed to, within two or three days file documentsrunning into thousand of pages or many third party documents which has tobe collected from third parties. Such unreasonable notices have been issuedeven during lock down period, assessment orders are passed rejecting therequest for adjournment without considering the submissions made ordocuments filed and without even granting personal hearing. Since we didnot grant further time, Mr. Chhotaray agreed to argue on the basis ofdocuments filed with the petition. 4We have heard the counsels and perused the petition and thedocuments annexed thereto. Petitioner has been served an approval dated30[th] March 2019 issued under Section 151 of the said Act on whichdocument number is given as ITBA/AST/S/118/2018-19/1015577887(1).The approval, as it appears from the document, has been given by oneDinesh Chander Patwari, Principal Commissioner of Income Tax – 2,Mumbai on 30[th] March 2019. The proposal was submitted by one AbhaySiddharth Deware. The proposal was recommended by Ashutosh Rajhans,who has noted “Yes, I am satisfied that this is a fit case to issue notice underSection 148” and Dinesh Chander Patwari has endorsed a remark “afterconsidering the reason recorded by AO the approval is granted”. Thereasons annexed to the said approval pertains to another assessee beingM/s. Glance Investment (I) Pvt. Ltd. Mr. Chhotaray submitted that inadvertently wrong annexure was sent alongwith the approval underSection 151. We do not find that statement even in the impugned orderrejecting the objections. Infact on the annexure, there is a printed header, which reads as under : AAACN2635D – NOVELTY PROPERTIES AND INVESTMENTPRIVATE LTD.A.Y. 2012-13 ITBA/AST/S/118/2018-19/1015577887(1) In our view, there has been total non application of mind whilegranting the approval. 5Therefore, certainly it cannot be a case where a wrongannexure has been stapled with the approval under Section 151 of the saidAct. Mr. Chhotaray thereafter, submitted that reasons for reopening weregiven second time on 20[th] August 2019 and 12[th] September 2019. We do notfind any fresh approval based on second or third reasons. The only approvalis dated 30[th] March 2019 which has been granted relying upon the reasonsannexed thereto. Section 151 of the said Act in force at the relevant time, insub-section (1) provides that no notice shall be issued under Section 148 byan Assessing Officer, after the expiry of a period of four years from the endof the relevant assessment year, unless Principal Chief Commissioner orChief Commissioner or Principal Commissioner or Commissioner is satisfied,on the reasons recorded by the Assessing Officer, that it is a fit case for theissue of such notice. The only approval on file is one dated 30[th] March 2019to which the reasons pertaining to another assessee is relied upon. For the subsequent reasons dated 20[th] August 2019 and 12[th] September 2019, nosatisfaction has been recorded by a Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner or Commissioner on those reasonsrecorded by the Assessing Officer that it is a fit case for the issue of suchnotice. 6In the circumstances, we have to lean in favour of petitioner,which we hereby do and the impugned notice dated 31[st] March 2019 andimpugned order dated 30[th] October 2019 are quashed and set aside. 7Since the petition has been allowed on this ground alone, wehave not expressed our views on the other grounds raised by petitioner. 8Petition disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.)