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Rajasthan High Court – Jaipur
M/S Samay Irrigation Private Limited vs Union Of India on 17 April, 2025
[2025:RJ-JP:14884-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil Writ Petition No.21086/2019
M/s Samay Irrigation Private Limited, F-790/A, Road No. 13,
V.K.I. Area, Jaipur, Rajasthan-302013, Through Its Authorised
Signatory Shri Ashish Bachawat R/o Flat No. 109, Galaxy Plaza,
Vidhyadhar Nagar, Jaipur.
----Petitioner
Versus
1. Union Of India, Through Secretary, Ministry Of Finance
(Department Of Revenue), North Block, New Delhi-
110001
2. Principal Commissioner Of Income Tax, Jaipur-II, NCR
Building, Statue Circle, C-Scheme, Jaipur-302005
3. Additional Commissioner Of Income Tax, Range-4, Jaipur,
NCR Building, Statue Circle, C-Scheme, Jaipur 302005
4. Shailesh Kotiyal, Income Tax Officer, Ward 4(2), Jaipur,
NCR Building, Statue Circle, C-Scheme, Jaipur 302005
5. Income Tax Officer, Ward 4(2), Jaipur, NCR Building,
Statue Circle, C-Scheme, Jaipur 302005
----Respondents
Connected With
D.B. Civil Writ Petition No. 20943/2019
M/s Samay Irrigation Private Limited, F-790/a, Road No.13,
V.K.I. Area, Jaipur, Rajasthan- 302013, Through Its Authorised
Signatory Shri Ashish Bachawat R/o Flat No. 109, Galaxy Plaza,
Vidhyadhar Nagar, Jaipur.
—-Petitioner
Versus
1. Union Of India, Through Secretary, Ministry Of Finance
(Department Of Revenue), North Block, New Delhi –
110001
2. Principal Commissioner Of Income Tax, Jaipur-Ii, Ncr
Building, Statue Circle, C-Scheme, Jaipur- 302005
3. Additional Commissioner Of Income Tax, Range-4, Jaipur,
Ncr Building, Statue Circle, C-Scheme, Jaipur- 302005.
4. Shailesh Kotiyal, Income Tax Officer, Ward 4(2), Jaipur,
Ncr Building, Statue Circle, C-Scheme, Jaipur- 302005.
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[2025:RJ-JP:14884-DB] (2 of 11) [CW-21086/2019]
5. Income Tax Officer, Ward 4(2), Jaipur, Ncr Building,
Statue Circle, C-Scheme, Jaipur- 302005.
—-Respondents
For Petitioner(s) : Mr.Anil Mehta, Sr. Adv. with
Mr.Ranvijay Singh, Adv.
For Respondent(s) : Mr.Sandeep Pathak (through V.C.)
with Mr.Arnav Singh, Adv.
HON’BLE MR. JUSTICE AVNEESH JHINGAN
HON’BLE MR. JUSTICE MANEESH SHARMA
JUDGMENT
RESERVED ON :: :: :: 28/03/2025
PRONOUNCED ON :: :: :: 17/04/2025
PER:- HON’BLE AVNEESH JHINGAN, J:-
1. Civil Writ Petition No.20943/2019 is filed assailing the order
dated 19.10.2019 dismissing the objections filed against the re-
opening of assessment under Section 148 of the Income Tax Act,
1961 (hereinafter ‘the Act’) and show cause notice dated
24.10.2019 (hereinafter ‘SCN’) issued under Section 148 of the
Act. Civil Writ Petition No.21086/2019 is filed seeking quashing of
the reassessment order dated 11.11.2019.
2. The petitioner for assessment year 2012-13 filed return
declaring ‘nil’ income. The assessment under Section 143(3) of
the Act was finalized on 30.03.2014. Subsequent proceedings for
assessment initiated on basis of revised return filed for correcting
error in claiming depreciation were dropped on 19.03.2015
considering that the assessment has already been completed. On
29.03.2019 notice under Section 148 of the Act was issued. The
reasons that the information received from Director General of
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Income Tax (Investigation) Mumbai (for brevity ‘DGIT’) form basis
that there is escaped assessment were supplied on 05.08.2019.
The petitioner filed objection dated 10.10.2019. On dismissal of
objection CWP No.20943/2019 was filed. While issuing notice, the
order if passed in pursuance to SCN was made subject to outcome
of writ. CWP No.21086/2019 was filed challenging the
reassessment order dated 11.11.2019.
3. Learned counsel for the petitioner submits that the
proceedings were initiated in absence of tangible material and
solely relying upon the third party information. The argument is
that the assessment was finalized under Section 143(3) of the Act
and impugned SCN could not have been issued after completion of
four years from the relevant assessment year. Contention is that
assessee had fully and truly disclosed the necessary material
facts and SCN is time barred. The submission is that the
reassessment order is not sustainable on merits, the addition
made is without any basis. Reliance is placed upon the decision of
Supreme Court in Commissioner of Income Tax, Gujarat Vs.
A. Raman & Co. reported in [(1967) 68 ITR 11], decision of
this Court in Micro Marbles Private Limited Vs. Office of the
Income Tax Officer reported in [(2023) 457 ITR 569] and
decision of High Court of Andhra Pradesh in Kohinoor Hatcheries
Pvt. Ltd. Vs. Deputy Commissioner of Income Tax & Anr.
reported in [(2016)389 ITR 493].
4. Learned counsel for the revenue submits that the petitioner
has challenged the reassessment order by filing appeal and all the
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issues can be gone into by the appellate authorities. The
contention is that on the basis of information received from DGIT
there was material available with the department to have reasons
to believe that income chargeable to tax has escaped assessment.
The order dated 19.10.2019 is defended by stating that the
objections were decided in accordance with law.
5. The Supreme Court in GKN Driveshafts (India) Limited
Vs. Income Tax Officer & Ors reported in [(2003) 259 ITR
19] held that the reasons for reopening are to be supplied to
assessee and the objections filed against reopening are to be dealt
with by passing a speaking order.
6. There is no statutory remedy provided against the order
dealing with the objections. The writ court can prima facie satisfy
the existence of basis to reopen the assessment. The sufficiency
or correctness of the material is not to be considered at this stage.
The Supreme Court in Assistant Commissioner of Income Tax
Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. reported in
[(2007) 72 ITR 500] held:
“16. Section 147 authorises and permits the
Assessing Officer to assess or reassess income
chargeable to tax if he has reason to believe
that income for any assessment year has
escaped assessment. The word ‘reason’ in the
phrase ‘reason to believe’ would mean cause
or justification. If the Assessing Officer has
cause or justification to know or suppose that
income had escaped assessment, it can be
said to have reason to believe that an income
had escaped assessment. The expression
cannot be read to mean that the Assessing
Officer should have finally ascertained the fact
by legal evidence or conclusion. The function
of the Assessing Officer is to administer the(Downloaded on 21/04/2025 at 09:53:02 PM)
[2025:RJ-JP:14884-DB] (5 of 11) [CW-21086/2019]statute with solicitude for the public exchequer
with an inbuilt idea of fairness to taxpayers.”
In Raymond Woolen Mills Limited vs. Income Tax
Officer, Centre XI, Range Bombay and others reported in
[(1999) 236 ITR 34 (SC)] law laid is:-
“3. In this case, we do not have to give a final
decision as to whether there is suppression of
material facts by the assessee or not. We have
only to see whether there was prima facie
some material on the basis of which the
Department could reopen the case. The
sufficiency or correctness of the material is not
a thing to be considered at this stage. We are
of the view that the court cannot strike down
the reopening of the case in the facts of this
case. It will be open to the assessee to prove
that the assumption of facts made in the
notice was erroneous. The assessee may also
prove that no new facts came to the
knowledge of the Income-tax Officer after
completion of the assessment proceeding. We
are not expressing any opinion on the merits
of the case. The questions of fact and law are
left open to be investigated and decided by
the assessing authority. The appellant will be
entitled to take all the points before the
assessing authority.”
7. The procedure laid down by the Supreme Court in GKN
Driveshafts (supra) was later made part of the Act by insertion of
Section 148-A. It is a safeguard provided to check arbitrary
exercise of power of reopening and to ensure that the proceedings
are being initiated on existence of prima facie basis.
8. Albeit, there is no statutory remedy against the order
rejecting the objections, at same time it cannot be lost sight that
it is a stage where the proceedings have not concluded. The
petitioner gets ample opportunity during the proceedings before
the different statutory forum to agitate that the findings arrived at
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are erroneous. Delhi High Court in the case of Gulmuhar Silk
Pvt. Ltd. Vs. Income Tax Officer reported in [(2022) 326 CTR
244] held:
“6. Though it is the petitioner’s case
that the impugned order is erroneous on
facts, yet this Court is of the opinion
that the petitioner would have ample
opportunity during the course of
proceedings before different statutory
forums to show that the finding of fact
arrived at was erroneous. Moreover, at
this stage, no assessment order has
been passed and it has only been
observed that it is a fit case for issuance
of notice under Section 148 of the Act.
In fact, the Supreme Court in
Commissioner of Income Tax and Ors.
Vs. Chhabil Das Agarwal, (2014) 1 SCC
603 has held that as the Income Tax
Act, 1961 provides complete machinery
for assessment/reassessment of tax,
assessee is not permitted to abandon
that machinery and invoke jurisdiction
of High Court under Article 226.
Consequently, the present case does not
fall under the exceptional grounds on
which a writ petition is maintainable at
the interim stage in tax matters.”
9. The Punjab and Haryana High Court in case of Sumit Passi
Vs. Assistant Commissioner of Income-tax (2016) 386 ITR
46 held:-
“29.xxxxxxxxxxxxx The reasons
assigned by the Assessing Officer to
tentatively believe that taxable income
has escaped assessment cannot be
brushed aside at the threshold without
a fact-finding procedure, more so when
the petitioners are not remediless and
have got equally efficacious recourses
under the Act.”
Punjab and Haryana High Court in Anshul Jain Vs.
Principal Commissioner of Income Tax and Ors. reported in
[(2022)449 ITR 251], the Court held :-
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“11. Thus, the consistent view is that where the
proceedings have not even been concluded by
the statutory authority, the writ court should not
interfere at such a premature stage. Moreover it
is not a case where from bare reading of notice
it can be axiomatically held that the authority
has clutched upon the jurisdiction not vested in
it. The correctness of the order under section
148A(d) is being challenged on the factual
premise contending that jurisdiction though
vested has been wrongly exercised. By now it is
well settled that there is vexed distinction
between jurisdictional error and error of law/fact
within jurisdiction. For rectification of errors
statutory remedy has been provided.”
The SLP filed against this decision was dismissed on
02.09.2022 and following order was passed:-
“1. What is challenged before the High
Court was the reopening notice under
section 148A(d) of the Income-tax Act,
1961. The notices have been issued, after
considering the objections raised by the
petitioner. If the petitioner has any
grievance on merits thereafter, the same
has to be agitated before the Assessing
Officer in the reassessment proceedings.
2. Under the circumstances, the High Court
has rightly dismissed the writ petition.
3. No interference of this court is called for.
4. The present special leave petition stands
dismissed.
5. Pending applications stand disposed of.”
10. The facts of the present case are that the department
received an information from the DGIT vide letter dated
03.07.2014. The information was that the petitioner had taken
accommodation entries to the tune of Rs.95,00,000/- from the
shell company managed by Mr.Praveen Kumar Jain and other entry
operators. After preliminary enquiry of the information received,
notice under Section 148 was issued.
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10.1 The petitioner raised objections:-
(i) that during the course of assessment u/s 143(3) the details
of addition to the share capital and confirmation from the person
subscribing share capital was furnished and there cannot be
reopening on this issue;
(ii) that notice could not have been issued after four years from
the end of the relevant assessment year when the petitioner had
fully and truly disclosed the necessary material and the
assessment was framed u/s 143(3);
(iii) that the information received by the department was not
taken cognizance by the AO in the assessment proceedings
initiated after filing of the revised return and completed on
19.03.2015; and lastly
(iv) the notice was issued at the end of limitation without
application of mind.
11. The objections were dealt in detail. The AO held that
confirmation from the shareholders subscribing the capital was not
produced by the petitioner and is not available on record. Rather it
is recorded that the petitioner had not furnished confirmation from
the shareholders in the ongoing assessment.
Neither from the assessment order nor from record it is
forthcoming that veracity and financial capacity of entities making
payment to the petitioner was gone into during the assessment
proceedings. The proceedings of reopening cannot be stalled at
the threshold as the challenge to reopening is of factual issues
which need a deeper probe in proceedings under Section 148 of
the Act.
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12. The challenge to notice being time barred will depend upon
answer to a mixed question of law and fact as to whether there
was true and full disclosure of the material facts by the petitioner.
13. The assessment of the petitioner was finalized under Section
143(3). Thereafter the petitioner filed revised return correcting
the clerical error in claiming the depreciation. On the basis of the
revised return the assessment proceedings were initiated but
dropped on 19.03.2015, considering that there cannot be two
assessment for an assessment year and the issues on merit were
not gone into.
14. The objection that while dropping the assessment
proceedings vide order dated 19.03.2015 the AO had not taken
cognizance of the information given by DGIT was rightly rejected.
There was no occasion for AO to go into any other issue after
holding that the proceedings cannot continue in view of
assessment having already been completed.
15. The contention that the proceedings were initiated merely on
receipt of information from the investigation wing and without
application of mind, lacks merit.
16. On receipt of material from the investigation wing a
preliminary enquiry was held by the AO. Issuance of notice under
Section 133(6) revealed that the transaction pertained to
Assessment Year 2012-13 and not to 2013-14. There is a tangible
material available with the AO to make basis for having reasons to
believe that there is escaped assessment. The AO is not required
to finally concluded on the relevancy of the material and to hold
that it is sufficient and ultimately would result in making an
addition.
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17. In all fairness we deal with the authorities relied upon by
learned senior counsel for the petitioner. Reliance on decision of
A. Raman & Co. (supra) does not enhance the case of the
petitioner. In the facts of that case it was held that reasons to
believe for escaped assessment were not existing. Whereas in the
present case consequent to information received from
investigation wing Mumbai a prima facie basis exists to proceed
under section148.
18. In case of Micro Marbles Private Limited (supra) the
notice under Section 148 and the proceedings consequent thereto
were quashed for failure of the department to supply the
information received from the investigation wing and documents
being relied upon.
19. In case of Kohinoor Hatcheries Pvt. Ltd. (supra) from the
questionnaire issued during the assessment proceedings it was
evident that there was full and true disclosure of the material facts
by the assessee. In the case in hand the claim of the petitioner
that during assessment the confirmation from the shareholder and
subscribers was produced and considered has been factually found
wrong.
20. No case is made out for interference in the impugned order.
In CWP No.21086/2019:-
21. The petitioner has challenged the reassessment order and
contention is that the re-assessment order was subject to
outcome of the writ petition No.20943/2019 and the order should
be tested on merits.
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22. The revenue has taken an objection that the petitioner after
filing the writ petition has availed remedy of appeal against the
reassessment order and this fact is not disclosed.
23. Learned senior counsel for the petitioner submits that
availability of an alternative remedy is not absolute bar for
entertaining the writ petition.
The proposition put forth need not be gone into and dilated
upon as the case in hand is not of availability of remedy of appeal
but here the petitioner has availed it. The petitioner cannot be
allowed to avail two parallel remedies simultaneously.
24. Moreover, after we have decided not to interfere in the order
rejecting the objections to reopening and petitioner has availed
remedy of appeal against reassessment order, no case is made out
bringing the petition within ambit of the exceptions carved out by
supreme court for entertaining the writ inspite of availability of
alternative remedy.
25. The writ petitions are dismissed. The petitioner shall be at
liberty to pursue the appeal and raise all issues before the
appellate authority.
(MANEESH SHARMA), J (AVNEESH JHINGAN), J
Himanshu Soni/reserved
Reportable:- Yes
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