Wtax/564/2022 Of Pushpa Yadav v. Income Tax Officer And 2 Others

A.F.R. Court No. - 3 Case :- WRIT TAX No. - 564 of 2022Petitioner :- Pushpa YadavRespondent :- Income Tax Officer And 2 OthersCounsel for Petitioner :- Mahendra Pratap,Anurag Yadav,Sr. Advocate Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan,Gopal Verma Hon'ble Surya Prakash Kesarwani,J.Hon'ble Jayant Banerji,J. 1.Heard Shri R.R. Agarwal, learned Senior Advocate assisted byShri Mahendra Pratap and Shri Anurag Yadav, learned counsel forthe petitioner, Shri Krishna Agarwal, learned counsel for therespondent nos.1 and 2/Income Tax Department and Shri GopalVerma, learned counsel for the respondent no.3. 2.This writ petition has been filed praying for the followingreliefs:- "(i) Issue a writ, order or direction in the nature of certiorariquashing the order dated 03.02.2022 passed by the NationalFaceless Assessment Centre Delhi respondent no.2 rejecting theobjection of the petitioner to the reasons recorded for re-openingof the assessment for A.Y. 2016-17 (Annexure-5 to the writpetition). (ii) Issue a writ, order or direction in the nature of certiorariquashing the notice issued under section 148 of the Income TaxAct for A.Y. 2016-17 dated 32.03.2021 issued by the Income TaxOfficer (1), Ward 2(2)(1) Ghaziabad, respondent no.1 (Annexure-2 to the writ petition)." 3.Learned Senior Advocate for the petitioner submits that theimpugned notice dated 30.03.2021 under Section 148 of the IncomeTax Act, 1961 (hereinafter referred to as the 'Act, 1961') has beenissued to the petitioner by the respondent no.1 on the basis of certaininformation received on account of the search conducted in thepremises of M/s Celebrations City Projects (P) Ltd. Therefore, at best,the proceedings against the petitioner-assessee may be initiated in accordance with the provisions of Section 153C of the Act, 1961which starts with non-obstante clause. He, therefore, submits that theimpugned notice under Section 148 of the Act, 1961 and theimpugned order dated 03.02.2022 rejecting the objection of thepetitioner, are wholly unsustainable and deserve to be quashed andthe entire proceeding under Section 148 is without jurisdiction. 4.Learned counsel for the respondents have supported theimpugned notice and the order. 5.We have carefully considered the submissions of learnedcounsels for the parties and perused the records of the writ petition. 6.Reason supplied by the assessing authority to the petitioner forinitiating proceedings under Section 147/148 of the Act, 1961, isreproduced below:- “It was informed by DDIT (Inv.)-1(3), Ghaziabad videletter dated 26.03.2021 dated during the enquiry proceedings, itwas found that that assessee has made cash amount of Rs.1,18,84,000/- for purchase of units/shops/space etc. in Red Mall,Ghaziabad to M/s Celebration City Projects Pvt Ltd. during theF.Y. 2015-16. On perusal of the record it is seen that the assessee hasfiled ITR for A.Y. 2016-17 on 28.07.2016 declaring income ofRs.7,32,670/-. As per record the case has not been assessed u/s143(3) of the Income Tax Act, 1961. 6.Reason supplied by the assessing authority to the petitioner forinitiating proceedings under Section 147/148 of the Act, 1961, isreproduced below:- “It was informed by DDIT (Inv.)-1(3), Ghaziabad videletter dated 26.03.2021 dated during the enquiry proceedings, itwas found that that assessee has made cash amount of Rs.1,18,84,000/- for purchase of units/shops/space etc. in Red Mall,Ghaziabad to M/s Celebration City Projects Pvt Ltd. during theF.Y. 2015-16. On perusal of the record it is seen that the assessee hasfiled ITR for A.Y. 2016-17 on 28.07.2016 declaring income ofRs.7,32,670/-. As per record the case has not been assessed u/s143(3) of the Income Tax Act, 1961. I have perused the record in light of the aboveinformation and throughindependent verification of return ofthe assessee with the perusal of the statement recorded on oathcame to independent conclusion that the assessee has madehuge cash of Rs.1,18,84,000/- for purchase of units/shop etc, inRed Mall to M/s Celebration City Projects Pvt Ltd. during theF.Y. 2015-16 1.e. A.Y. 2016-17. Hence, there is reason to believethat there is escapement of income from the returned income ofthe assessee. I have reason to believe that there is escapement ofmore than Rs. 1,18,84,000/- and further additional income and anyother income which can come in the the knowledge subsequentlyin the course of proceedings u/s 147(b), therefore the issue ofnotice u/s 148 of the income tax act, 1961 is necessary in this case.Hence, the case of Smit Pushpa Yadav is being proposed forapproval under the provision of section 151(1) of the I.T. Act,1961.” (emphasis supplied) 7.While rejecting the objection of the petitioner by the impugnedorder dated 03.02.2022, the respondent no.1 has observed inparagraphs 2, 5.2.2 and 5.3.2. as under:- “2.In the case of the assessee, information has been receivedfrom the DDIT (Inv)-(1)(3) by letter dated 26/3/2021 that duringthe course of enquiry, it was found that the assessee has madepayment by cash of an amount of Rs.1,18,84,000/-, forpurchase of units/shops/space in the Red Mall, Ghaziabad tothe seller M/s Celebration City Projects P Ltd. during the F.Y2015-16. The A.O has stated that as per details available, theassessee has filed ITR for A.Y 2016-17 on 28/07/2016 declaringincome of Rs.7,32,670/-, which was processed u/s 143(1) of theAct. The A.O has perused the available records of the assesseein the light of the information received from the InvestigationWing and through independent verification of the return ofthe assessee with the perusal of the statement recorded onoath, came to the conclusion that the assessee has made thecash payment of Rs.1,18,84,000/- for purchase of units/shops inRed Mall to the seller M/s Celebration City Projects P Ltd.during the FY 2015-16. The A.O has therefore, analysed the information with thereturn of income filed by the assessee for the relevant period, thesource of cash deposits was not disclosed in the return of incomefiled, which is chargeable to tax as discussed in paragraph aboveand the assessee was assessable under the Act. In view of theabove facts, the A.O had reason to believe that the assessee hasnot disclosed fully and truly all material facts for the year underconsideration and the said cash deposits of Rs 22,85,000/- is theincome of the assessee that has escaped assessment within themeaning of sec. 147 of the Income Tax Act, 1961. Accordingly, the assessment was re-opened by issue ofnotice u/s.148 of the I.T. Act dated 30/3/2021, after takingrequired approval from the competent authority in the Departmentas per the provisions of section 151 of the Income Tax Act, 1961. …........ Accordingly, the assessment was re-opened by issue ofnotice u/s.148 of the I.T. Act dated 30/3/2021, after takingrequired approval from the competent authority in the Departmentas per the provisions of section 151 of the Income Tax Act, 1961. …........ 5.2.2. The arguments of the assessee are unfounded. In thereasons recorded by the A.O, the A.O has clearly specified thathe has analysed the information with the return of incomefiled by the assessee for the relevant period and found that thesource of cash deposits was not disclosed in the return ofincome filed. In view of the above facts, the A.O had reason tobelieve that the assessee has not disclosed fully and truly allmaterial facts for the year under consideration and the said cashpayment of Rs.1,18,84,000/- made by the assessee is the incomeof the assessee that has escaped assessment within the meaning ofsec. 147 of the Income Tax Act, 1961. …...... 5.3.2 5.The assessees's contention is entirely incorrect. In theassessee's case, there is reliable information from theInvestigation Wing gathered during the course of search andsurvey operations in the case of M/s Celebration City Projects PLtd. that payment in cash has been received from the assessee forsale of units/shop rooms from M/s Celebration City Projects P Ltd.The enquiry report received from the Investigation Wing fromthe DDIT (Inv). (1)(3) by letter dated 26/3/2021 giving thedetails of the transaction was analysed with the return ofincome filed by the assessee. The A.O then arrived at anindependent opinion of income having escaped assessmentwithin the meaning of section 147 of the I.T. Act in the case ofthe assessee. There are broadly two limitations on the power of the revenue toreopen assessments - (i) there must be some tangible materialbased on which the reopening is being undertaken which leads to areason to believe that there has been escapement of income and(ii) the reopening should not be a "mere change of opinion.Furthermsore, information from the Investigation Wing, can bebasis for issue of notice u/s.148, as held in the following judicialrulings - 1. AGR Investment Ltd. Vs. Addl.CIT&Anr. (Delhi) 333 ITR 146.2. Shalimar Buildcon (P) Ltd. V/s. ITO ITAT (Jaipur), 136 TTJ 701. (emphasis supplied) 8.Section 153C(1) of the Act, 1961 reads as under :- "153C. (1) Notwithstanding anything contained in section 139,section 147, section 148, section 149, section 151 and section 153,where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable articleor thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized orrequisitioned, pertains or pertain to, or any informationcontained therein, relates to, a person other than the person referred to in section 153A, then,the books of account or documents or assets, seized orrequisitioned shall be handed over to the Assessing Officer havingjurisdiction over such other person and that Assessing Officershall proceed against each such other person and issue notice andassess or reassess the income of the other person in accordancewith the provisions of section 153A, if, that Assessing Officer issatisfied that the books of account or documents or assets seized orrequisitioned have a bearing on the determination of the totalincome of such other person for six assessment years immediatelypreceding the assessment year relevant to the previous year inwhich search is conducted or requisition is made and for therelevant assessment year or years referred to in sub-section (1) ofsection 153A: Provided that in case of such other person, the reference tothe date of initiation of the search under section 132 or making ofrequisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to thedate of receiving the books of account or documents or assetsseized or requisitioned by the Assessing Officer havingjurisdiction over such other person : Provided that in case of such other person, the reference tothe date of initiation of the search under section 132 or making ofrequisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to thedate of receiving the books of account or documents or assetsseized or requisitioned by the Assessing Officer havingjurisdiction over such other person : Provided further that the Central Government may byrules made by it and published in the Official Gazette, specify theclass or classes of cases in respect of such other person, in whichthe Assessing Officer shall not be required to issue notice forassessing or reassessing the total income for six assessment yearsimmediately preceding the assessment year relevant to theprevious year in which search is conducted or requisition is madeand for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in case where any assessmentor reassessment has abated.” 9.From the reason recorded by the assessing authority, it isevident that the assessing authority was having some informationfrom the DDT (Inv.)-1(3), Ghaziabad vide letter dated 26.03.2021. Heindependently verified the information received from the return ofincome of the assessee and also perused the statement recorded onoath and then he came to an independent conclusion that the assesseehad made huge cash of Rs.1,18,84,000/- for purchase of units/shopetc. in Red Mall to M/s Celebrations City Projects (P) Ltd. during theFinancial Year 2015-16. The reason to believe recorded by theassessing authority is not on the basis of any books of account ordocument seized by Income Tax Authorities in the search conductedon M/s Celebrations City Projects (P) Ltd. 10.Even if it is presumed that copies of certain statements on oathrecorded during the course of search by the Investigating Wing, wereforwarded to the respondent no.1 alongwith the report, it cannot besaid to be either the books of account or document seized so as to fallit within the ambit of clause (b) of sub-section (1) of Section 153C ofthe Act, 1961. 11.Perusal of the reason recorded by the assessing authority asaforequoted reveals that the assessing authority has proceeded on thebasis of certain information received from the Investigating Wing and after independent verification, he came to the conclusion that theassessee had made huge cash of Rs.1,18,84,000/-, which caused himto issue notice to the petitioner under Section 148 of the Act, 1961. Itis also admitted case of the petitioner that no assessment was made bythe assessing authority for the Assessment Year 2016-17. As perExplanation 2(b) appended to Section 147 of the Act, 1961, if a returnof income has been furnished by the assessee but no assessment hasbeen made and it is noticed by the assessing officer that the assesseehas understated the income or has claimed excessive loss,deduction, allowance or relief in the return; then it shall be deemed tobe a case where income chargeable to tax has escaped assessment. 12.In view of the above discussions, we find that neither theimpugned notice issued by the respondent no.1 under Section 148 ofthe Act, 1961 suffers from any illegality nor the impugned orderrejecting the objection of the petitioner suffers from any infirmity,which, under the circumstances, cannot be interfered with. 13.For all the reasons aforestated, we find that the writ petition hasno substance and is, therefore, dismissed. 14.It shall be open for the assessing authority to proceed with thereassessment proceedings in accordance with law, without beinginfluenced by any of the observations made in the body of thisjudgment. Order Date :- 12.4.2022SK