Wp/861/2015 Of Slum Rehabilitation Authority v. The Dy. Director Of Income Tax-I(2) And 2 Ors

PURTIPRASADPARAB Digitally signed byPURTI PRASADPARABDate: 2022.03.1711:46:02 +0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 861 OF 2015 Slum Rehabilitation Authority V/s. The Deputy Director of Income Tax(Exemption – I(2), Mumbai And Ors. ….Petitioner …Respondents ---- Mr. Bharat Raichandani a/w Mr. Mahesh Raichandani and Mr. Rishabh Jain i/b UBR Legal Advocates for Petitioner.Mr. Suresh Kumar for Respondents. ---- CORAM : K.R. SHRIRAM & N. J. JAMADAR, JJ. DATED : 11[th] MARCH, 2022 P.C. : 1.Mr. Suresh Kumar tenders affidavit in reply of one Mr. AswiniPrasad, JCIT (OSD), Mumbai affirmed on 9[th] March, 2022 which is taken onrecord. 2.Petitioner is impugning a notice dated 29[th] March, 2014 issuedunder Section 148 of the Income Tax Act, 1961 (the Act) and order dated16[th] February, 2015 passed by respondent rejecting petitioner’s objections tore-opening. 3.Petitioner filed return for assessment year 2008-09 andassessment under Section 143(3) of the Act was completed on 27[th]December, 2010 assessing petitioner’s total income at Rs.82,53,57,000/-. Petitioner was disallowed deduction under Section 11 of the Act in theassessment order. Petitioner challenged disallowance from denial ofdeduction before the Commissioner of Income Tax (Appeals) (CIT (A)) whoallowed the appeal. Aggrieved by the order of CIT (A) respondent filedappeal before the Income Tax Appellate Tribunal (ITAT). The ITAT dismissRevenue’s appeal and Revenue carried the matter to this court. Thiscourt upheld the order of the ITAT and consequently petitioner was granteddeduction under Section 11 of the Act. 4.Thereafter, petitioner received a notice dated 29[th] March, 2014under Section 148 of the Act which is impugned in this petition. Petitionerwas provided the reasons to re-open the assessment under Section 147 ofthe Act. The reasons for re-opening is on the basis that the DIT (E),Mumbai passed order dated 27[th] March, 2014 cancelling petitioner’sregistration under Section 12AA of the Act with effect from 1[st] April, 2002and in view thereof petitioner did not become eligible for any exemptionunder Section 11 of the Act and therefore the claim of petitioner in respectof exemption under Section 11 of the Act amounting to Rs.138,90,74,595/-has to be rejected and income to that extent has to be assessed accordingly. 5.In this case, indisputably the notice to re-open has been issuedafter the expiry of four years from the end of the relevant assessment yearand assessment proceedings under Section 143(3) of the Act has also been completed. Therefore, the proviso to Section 147 of the Act shall applywhich bars re-opening of assessment unless there has been failure on thepart of assessee to disclose truly and fully all material facts required forassessment. The onus is on the Revenue to show that there has been suchfailure to truly and fully disclose. 6.Having considered the reasons recorded for re-opening theassessment, we are not satisfied that the Revenue has been able to showthat there was failure on the part of petitioner to disclose truly and fully anymaterial fact. Usage of the expression in the reasons that assessee has failedto disclose fully and truly material facts is only to escape the restrictionsprovided under Section 147 of the Act. In effect there has been no failure todisclose. We say this because the reasons for re-opening expressly providesthat income to the extent of Rs.138,90,74,595/- has to be assessed becausepetitioner by virtue of an order dated 27[th] March, 2014 has becomeineligible for exemption under Section 11 of the Act with effect from 1[st]April, 2002. It is not alleged that petitioner had actually failed to discloseany material fact. 7.Mr. Suresh Kumar made an attempt to justify re-opening butsubmitted that on the basis of new and additional facts like cancellation ofregistration under Section 12A and 12AA of the Act belief can be formedthat some income has escaped assessment and the same can be provided to 7.Mr. Suresh Kumar made an attempt to justify re-opening butsubmitted that on the basis of new and additional facts like cancellation ofregistration under Section 12A and 12AA of the Act belief can be formedthat some income has escaped assessment and the same can be provided to taxation making disallowance under Section 11 of the Act during the courseof re-assessment proceedings under Section 147 of the Act. Mr. SureshKumar also submitted that this order dated 27[th] March, 2014 cancelling theregistration under Section 12AA of the Act was not available to theAssessing Officer at the time of completing the assessment under Section143(3) of the Act and therefore this court should not interfere with thenotice issued for re-opening. 8.We are afraid we cannot agree with the submissions of theRevenuein as much as proviso to Section 147 of the Act expressly makes it clear thatthere is bar in re-opening the assessment after expiry of four years from theend of the relevant assessment year. The proviso states “……… no actionshall be taken under this section after expiry of four years from the end ofthe relevant assessment year, unless any income chargeable to tax hasescaped assessment for such assessment year by reason of the failure on thepart of the assessee to disclose fully and truly all material facts necessary forhis assessment, for that assessment year”. 9.In the circumstances as Revenue has failed to make out a caseof failure to disclose on the part of petitioner the material facts, theimpugned notice dated 29[th] March, 2014 is not sustainable. Consequently,the order rejecting objections also have to be set aside. 10. In the circumstances, petition is allowed in terms of prayer clause – (a) which read as under : (a)that this Hon’ble Court be pleased to issue a writ ofCertiorari or a writ in the nature of Certiorari or any otherappropriate writ, order or direction under Article 226 and/orArticle 227 of the Constitution of India calling for the recordsof the Petitioner’s case and after examining the legality andvalidity thereof quash and set aside the Impugned Noticedated 29 March 2014 issued by Respondent No.1 underSection 148 of the Act (Exhibit A), the Impugned Order dated16 February 2015 (Exhibit B) issued by Respondent No.2 andthe Impugned Assessment Notices. 11.Petition disposed. (N. J. JAMADAR, J.) (K.R. SHRIRAM, J.)