Gujarat High Court
Kailashchandra Suryakant Huf vs Income Tax Officer, Ward 1(2)(1), … on 23 December, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/5616/2022 JUDGMENT DATED: 23/12/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5616 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE D.N. RAY
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Approved for Reporting Yes No
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KAILASHCHANDRA SURYAKANT HUF
Versus
INCOME TAX OFFICER, WARD 1(2)(1), AHMEDABAD
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Appearance:
MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1
MR. DEV D. PATEL FOR MR VARUN K. PATEL(3802) for the Respondent(s)
No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 23/12/2024
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Rule. Learned counsel Mr. Dev Patel waives service of
notice of rule on behalf of the respondent.
2. Heard learned advocate Mr. Hardik Vora for the
petitioner and learned advocate Mr. Dev Patel for the
respondent.
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NEUTRAL CITATION
C/SCA/5616/2022 JUDGMENT DATED: 23/12/2024
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3. This petition is filed under Article 226 of the Constitution
of India to challenge the legality and validity of the Notice
dated 30.03.2021 issued under section 148 of the Income Tax
Act, 1961 (for short, “the Act”) for the Assessment Year 2013-
14.
4. The brief facts of the case are that the petitioner Firm is
engaged in the business of textile trading and had filed its
original return of income for the A.Y. 2013-14 on 01.10.2013
declaring total income of Rs. NIL.
4.1 The case of the petitioner was selected under CASS for
limited scrutiny. During the course of regular assessment
proceedings, inquiries were made and reply was filed by the
petitioner on various grounds furnishing all the relevant
details. On 10.03.2016 the Assessing Officer passed the
assessment order u/s. 143(3) of the Act whereby, the return of
income filed by the petitioner was accepted.
4.2 It appears that on 28.03.2018 the respondent Assessing
Officer issued Notice u/s. 148 of the Act after obtaining
approval of the Principal CIT-1, Ahmedabad. In response to the
said Notice, the petitioner provided all the details as sought
for. Thereafter, the respondent Assessing Officer passed the
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NEUTRAL CITATION
C/SCA/5616/2022 JUDGMENT DATED: 23/12/2024
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order dated 27.12.2018 u/s. 143(3) r/w. section 147 of the Act
assessing the total income of the petitioner at Rs. NIL and
accepted the return of income.
4.3 It appears that thereafter, the respondent again issued the
impugned Notice u/s. 148 of the Act and in response to the
same, the petitioner filed return of income declaring total loss
of Rs.15,11,195/-.
5. Learned advocate Mr. Hardik Vora for the petitioner
submitted that once the re-assessment proceedings have been
concluded, then on the same set of facts, the impugned Notice
could not have been issued, as there is no question of
escapement of assessment on account of failure on the part of
the petitioner to disclose fully and truly all material facts
necessary for the assessment of the year under consideration.
5.1 It was submitted that the reasons recorded are based on
incorrect factual details received from the Investigating Wing
wherein, it is alleged that the petitioner has entered into bogus
transactions. It was submitted that no details were furnished to
the petitioner in connection with such allegations.
5.2 Learned advocate Mr. Vora invited the attention of the
Court to the affidavit-in-reply filed on behalf of the respondent
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NEUTRAL CITATION
C/SCA/5616/2022 JUDGMENT DATED: 23/12/2024
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to point out that it is admitted by the respondent that at the
time of re-opening the case, the physical case record of the
assessee was not readily traceable and therefore, it could not
be ascertained as to on what information / basis the case was
re-opened earlier and the assessment order u/s. 143(3) r/w.
section 147 of the Act was finalized on 27.12.2018 and as the
matter was getting time barred, the impugned Notice was
issued. It was, therefore, submitted that the impugned Notice
is issued without jurisdiction as the entire basis of assumption
that there is escapement of income is non-existent.
6. Learned advocate Mr. Dev Patel for the respondent could
not controvert the facts stated in the affidavit-in-reply, which
are reproduced hereunder;
“2. It is submitted that the present petition is filed
challenging the notice u/s.148 of the I.T. Act dated
30.03.2021 for A.Y. 2013-14 on several grounds. It was
contended that there is no failure on the part of the
assessee in disclosing truly and fully material information
and the case of the assessee was already scrutinized u/s.
143(3) and thereafter re-assessed u/s. 147 r.w.s. 143(3).
In this regard, it is submitted that the answering
respondent based on comments / notes prepared by the
then A.O. states and submits as under:
(i) In the present case, the Petitioner had filed its
return for the A.Y. 2013-14 on 01.10.2013 declaring
total income at Rs. NIL. Subsequently, the case was
selected for scrutiny under CASS (Computer AssistedPage 4 of 6
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NEUTRAL CITATIONC/SCA/5616/2022 JUDGMENT DATED: 23/12/2024
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Scrutiny Selection) and the assessment was finalized
on 10.03.2016 determining total income at Rs. NIL.
It is submitted that thereafter, in this case,
information was received from the DDIT (Inv.) Unit
– 1(1) Ahmedabad on 20.03.2018 by the erstwhile
ITO, Ward – 1(2)(2), Ahmedabad. It is submitted
that on the basis of the information the case was
reopened after recording reasons and getting
necessary approval from the competent authority
and notice u/s. 148 of the Income Tax Act, 1961
(hereinafter referred to as “Act”) was issued on
28.03.2018 and the assessment order u/s. 143(3)
r.w. Section 147 of the Act was passed on
27.12.2018.
(ii) Afterwards, once again the same information
was received by the erstwhile ITO, Ward-1(2)(2),
Ahmedabad from DDIT (Inv.) Unit-1(1), Ahmedabad
on 15.03.2019. It is submitted that by
implementation of Faceless Assessment Scheme two
wards, i.e. Ward-1(2)(2) and Ward1(3)(5) were
merged with Ward-1(2)(1), Ahmedabad. The then
Assessing Officer had joined the office on
15.10.2020 as ITO Ward1(2)(1), Ahmedabad (post
merger) and the said information in this case was
handed over to the then AO. Hence, on the basis of
this information, the case was reopened after
recording reasons and getting necessary approval
from the competent authority and notice u/s. 148 of
the Act was issued on 30.03.2021.
(iii) It is submitted that at the time of reopening
of this case, the physical case record of the assessee
was not readily traceable due to which it could not
be ascertained while reopening the case as to on
what information / basis the case was reopened
earlier and assessment order u/s. 143(3) r.w.s. 147
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NEUTRAL CITATION
C/SCA/5616/2022 JUDGMENT DATED: 23/12/2024
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was finalized on 27.12.2018. Since, the matter was
getting time barred by 31.03.2021, to safeguard the
interest of revenue, the case of the assessee for the
AY 2013-14 was again reopened by virtue of notice
u/s. 148 dated 30.03.2021 after recording reasons
and getting necessary approval from the competent
authority on the basis of information available with
the office of the then A.O. At present the
assessment proceedings are pending with NaFAC,
New Delhi.”
7. Having heard learned advocates for the respective parties,
it is not in dispute that the impugned Notice u/s. 148 of the
Act has been issued on the same set of facts, which was the
basis of the Notice for re-opening issued in the year 2018.
Therefore, the impugned Notice is without jurisdiction and
deserves to be quashed and set aside.
8. For the foregoing reasons, the petition is allowed. The
impugned Notice dated 30.03.2021 issued u/s. 148 of the Act
is hereby quashed and set aside. Rule is made absolute. No
order as to costs.
(BHARGAV D. KARIA, J)
(D.N.RAY, J)
PRAVIN KARUNAN
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