NISHARAHEMAD VAJIRKHAN PATHAN
Versus
THE INCOME TAX OFFICER
|
JUDGEMENT
SUMMERY
|
|
Court
|
Gujarat High Court
|
|
Related Act
|
Income Tax Act, 1961
|
|
Section(s)
|
Section 139, 143, 147, 148, 149, 150 of Income Tax Act,
1961
|
|
Year of Order
|
18/01/2021
|
|
Summery
|
Just because partnership firm failed to file its return
of income for relevant Financial Year, by itself, will not confer
jurisdiction upon authority concerned to issue notice against individual
partners of the firm with respect to their individual return of income for
relevant year in consideration.
|
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 16304 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA Sd/-
and
HONOURABLE MR. JUSTICE ILESH J. VORA Sd/-
==========================================================
1 Whether Reporters of
Local Papers may be allowed to see the judgment ? Yes
2 To be referred to the
Reporter or not ? Yes
3 Whether their Lordships
wish to see the fair copy of the judgment ? No
4 Whether this case
involves a substantial question of law as to the interpretation
of the Constitution of India or any order made thereunder ? No
==========================================================
NISHARAHEMAD VAJIRKHAN PATHAN
Versus
THE INCOME TAX OFFICER
==========================================================
Appearance:
MR. TUSHAR HEMANI, LD. SR. COUNSEL WITH MS VAIBHAVI K
PARIKH(3238) for the Petitioner(s) No. 1
MRS MAUNA M BHATT(174) for the Respondent(s) No. 1
==========================================================
CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE ILESH J. VORA
Date : 18/01/2021
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. By this writ application under Article 226 of the
Constitution of India, the writ applicant has prayed for the
following reliefs;
“(A) quash and set aside the impugned notice at
Annexure-A to this petition;
(B) pending the admission, hearing and final disposal of
this petition, to stay the implementation and operation of
the notice at Annexure-A to this petition and stay the
further proceedings for the Assessment Year 2012-13;
(C ) any other and further relief deemed just and proper
be granted in the interest of justice;
(D) to provide for the cost of this petition.”
2. For the sake of convenience, the following details may be
stated as under;
Assessment Year 2012-13
Assessment History 143(1)
Date of notice under section 148 Beyond four years
3. It appears from the materials on record that the writ
applicant is one of the partners in a partnership firm running in
the name and style of “M/s. Shree Khodiyar Developers”. The
said partnership firm purchased two immovable properties
(Block Nos.533 and 534 respectively, situated at Moje
Palaswada, Dabhoi, District: Baroda) vide the sale deeds dated
30th May, 2011 for the total sale consideration of
Rs.30,01,548/- and Rs.53,25,452/- respectively. The writ
applicant herein is a signatory to the said conveyance deed in
his capacity as a partner of the firm.
4. It is not in dispute that the sale consideration for the
purchase of the two immovable properties, referred to above,
was paid from the account of the partnership firm.
5. It appears that the partnership firm had not filed its
return of income for the A.Y.2012-13.
6. The Income Tax Department thought fit to issue notice
under Section 148 of the Act, 1961 to the writ applicant in his
individual capacity proposing to reopen the assessment for the
A.Y.2012-13 on the ground that the income chargeable to tax
for the relevant year had escaped assessment within the
meaning of Section 147 of the Act, 1961. The following reasons
came to be assigned for the reopening of the assessment.
“1. Brief details of the Assessee:
Assessee is an individual and he has filed the return for
the year under consideration declaring total income at
Rs.3,64,000/- on 19.03.2013 vide acknowledgment
no.580507250190313.
2. Brief details of information collected/received
by the AO:
In this case the information was received from the ITO
Ward-1(2)(4), Vadodara vide letter No. BRD/ITO/Wd.1(2)
(4) Inf./2018-19 dated 18.02.2019 that assessee along
with five others, has purchased two immovable property
situated at Block No.533 and 534, Moje Palaswada,
Dabhoi, Dist. Baroda for a consideration of Rs.30,01,548/-
and Rs.53,25,452/- respectively.
3. Analysis of information collected/received.
It is seen that assessee has purchased two properties
valuing Rs.88,13,060/- including registration and stamp
charges in which his share is 1/6th (Rs.14,68,843).
4. Enquiries made by the AO as sequel to
information collected/received:
The ITO, Ward-1(2)(4), Vadodara vide above mentioned
letter forwarded the information and the addition made
by the AO in case of one of the co-owner of the property
is confirmed by the CIT (A) with a direction to ensure that
assessment of unexplained investment in the hands of
the other partners of the firm. Under these
circumstances, there is no need to conduct separate
enquiry for satisfaction of reason of escapement of
income.
5. Findings of AO:
From the above facts available, it appears that assessee
has made investment in the property to the tune of
Rs.14,68,843/- as unexplained investment.
6. Basis of forming reason to believe and details
of escapement of income:
Therefore, from the above facts I have reason to believe
that entries to the extent of Rs.14,68,843/- has escaped
assessment and I am satisfied that this is a fit case for
reopening the assessment u/s.147 for A.Y.2012-13.
7. No information about any asset outside India.
8. Applicability of the provision of section 147/151 to
the facts of the case.
In this case return of income was filed for the year under
consideration but no assessment was made and the only
requirement to initiate proceeding u/s.147 is reason to
believe which has been recorded above.
(refer paragraph 6).
It is pertinent to mention here that in this case the
assessee has filed return of income for the year under
consideration but no assessment at stipulated u/s.2(40)
of the Act was made and the return of income was only
processed u/s.143(1) of the Act. In view of the above, the
provisions of clause (b) of Explanation 2 to section 147
are applicable to facts of this case and the assessment
year under consideration is deemed to be a case where
income chargeable to tax has escaped assessment.
This case is within four years from the end of the
assessment year under consideration. Hence, necessary
sanction to issue the notice u/s. 148 has been obtained
separately from joint commissioner of income tax as per
the provisions of section 151 of the Act.
Or
In this case more than four years have lapsed from the
end of assessment year under consideration. Hence,
necessary sanction to issue notice u/s. 148 has been
obtained separately from Principle Commissioner of
Income Tax as per the provisions of section 151 of the
Act.”
7. The writ applicant responded to the above referred notice
by filing his objections as under:-
“A. I have received letter dated 19.06.2019 stating
reasons for reopening of the assessment for A.Y.2012-13
as under:
“Reason for reopening of assessment in case of Shri
Nishar Ahemad Vazirkhan Pathan for A.Y.2012-13 u/s.147
of the Act.
1. Brief details of the assessee:
Assessee is an individual and he has filed the return for
the year under consideration declaring total income of
Rs.3,64,000/- on 19.03.2013 vide acknowledgment
no.580507250190313.
2. Brief details of information collected/received by
the AO:
In this case the information was received from the ITO
Ward-1(2)(4), Vadodara vide letter no.BRD/ITO/Wd. 1(2)
(4) Inf./2018-19 dated 18.02.2019 that assessee along
with five others, has purchased two immovable
properties situated at Block No.533 and 534, Moje
Palaswada, Dabhoi, Dist. Baroda for a consideration of
Rs.30,01,548/- and Rs.53,25,452/- respectively.
4. Analysis of information collected/received.
It is seen that assessee has purchased two properties
valuing Rs.88,13,060/- including registration and stamp
charges in which his share is 1/6th (Rs.14,68,843).
5. Enquiries made by the AO as sequel to
information collected/received:
The ITO, Ward-1(2)(4), Vadodara vide above mentioned
letter forwarded the information and the addition made
by the AO in case of one of the co-owner of the property
is confirmed by the CIT (A) with a direction to ensure that
assessment of unexplained investment in the hands of
the other partners of the firm. Under these
circumstances, there is no need to conduct separate
enquiry for satisfaction of reason of escapement of
income.
6. Findings of AO:
From the above facts available, it appears that assessee
has made investment in the property to the tune of
Rs.14,68,843/- as unexplained investment.
7. Basis of forming reason to believe and details
of escapement of income:
Therefore, from the above facts I have reason to believe
that entries to the extent of Rs.14,68,843/- has escaped
assessment and I am satisfied that this is a fit case for
reopening the assessment u/s.147 for A.Y.2012-13.
B. On perusal of the above and without prejudice to
the above and under protest, please note our following
objections:
a. The reason for reopening inter-alia stated vide para
2 that “Brief details of information collected/received by
the AO; in this case the information was received from
the ITO Ward-1(2)(4), Vadodara vide letter
No.BRD/ITO/Wd. 1(2)(4) inf./2018-19 dated 18.02.2019
that assessee along with five others, has purchased two
immovable property situated at Block No.533 and 534
Moje Palaswada, Dabhoi, Dist: Baroda for a consideration
of Rs.30,01,548/- and Rs.53,25,452/- respectively”.
In this respect, I would like to inform you that I have not
purchased the immovable property bearing Block
No.534/1 moje Palaswada for total purchase
consideration of Rs.53,25,452/- and Block No.533 Moje
Palaswada for total purchase consideration of
Rs.30,01,548/- vide registered sale deed no.1169 of 2011
and 1170 of 2011 respectively dated 30.05.2011 but the
immovable property have been purchased by the
M/s.Shree Khodiyar Developers. The purchase
consideration was paid by the firm M/s. Shree Khodiyar
Developers. Copy of the sale deeds and bank statements
of M/s. Shree Khodiyar Developers are hereby enclosed
for your verification.
It seems that the wrong information is
collected/gathered. The property subject matter of the
reopening was not purchased by me at all. The reason
for reopening of the assessment itself is on wrong
premise and fact and it is completely base on wrong
reason, so reasons lacks validity. When the notice itself
is thus, defective, it would have no effect of reopening on
the assessment.
b. The reason for reopening inter-alia stated vide para
4 that “enquiries made by the AO as sequel to
information collected/received. The ITO , Ward-1(2)(4),
Vadodara vide above mentioned letter forwarded the
information and the addition made by the AO in case of
one of the co-owner of the property is confirmed by the
CIT(A) with a direction to ensure that assessment of
unexplained investment in the hands of the other
partners of the firm. Under these circumstances there is
no need to conduct separate enquiry for satisfaction of
reason of escapement of income.
I would like to state that the addition made by the other
AO and confirmed by the CIT(A) in case of other co-owner
of the property, is not relevant. It cannot be the base for
not making separate inquiry for the satisfaction of reason
for reopening on the basis of escapement of income.
Because in case of the other co-owner Shri Hasitkumar
Bhatt case while making inquiry about the source of the
investment in the subject matter immovable property
situated at Block No.534/1 moje Palaswada for total
purchase consideration of Rs.53,25,452/- and Block
No.533 moje Palaswada for total purchase consideration
of Rs.30,01,548/- vide registered sale deed no.1169 of
2011 and 1170 of 2011 respectively dated 30.05.2011,
the Income Tax Officer has appreciated the fact that the
immovable property was purchased by M/s. Shri Khodiyar
Developers. He has concluded the matter at inquiry level
and has not initiated proceeding u/s.147 r.w.s. 148 of the
Act. Copy of the inquiry letter and copy of reply is
herewith enclosed.
Hence AO is required to inquire the matter independently
of information received and to satisfy himself about
reason for reopening. Hence, the reopening of the
assessment under Section 147 of the Act stating that
“there is no need to conduct separate enquiry for
satisfaction of reason of escapement of income” is bad in
law. The reasons to believe must have a material bearing
on the question on escapement of income. It does not
mean a purely subjective satisfaction of the assessing
authority; the reason be held in good faith and cannot
merely be a pretence. Thus the reason recorded is totally
erroneous and invalid reason and is not in terms of
Section 147 of the Act.
c. I have filed my return of income for the A.Y. 2012-13
dated 19.03.2013 vide E-filing Acknowledgment Number
580507250190313 disclosing fully and truly all material
facts necessary for his assessment. I have also suo motu
informed the Income Tax Officer, Ward-2, Mehsana that
the immovable property of the subject matter was not
purchased by me but it is purchased by the M/s. Shree
Khodiyar Developers vide letter dated 19.03.2019. Copy
of the acknowledged letter is enclosed herewith.
It seems that no cognizance has been taken of the letter
submitted by me. When return has been filed disclosing
fully and truly all material facts and letter explaining the
things has already submitted. I am totally surprised to
receive notice u/s.148 on the basis of purchase of
immovable property. The reopening of an assessment
after the lapse of many year is a serious matter. I can't
see any genuine reason to reopen the assessment after
so long duration has been lapsed that too on the basis of
untrue reason. The reopening of the assessment is
without the authority permitted u/s.147 of the Act.
d. I have filed his return of income for the A.Y.2012-
13 dated 19.03.2013 vde E-filing Acknowledgement
Number 580507250190313 disclosing fully and truly all
material facts necessary for my assessment. An
intimation u/s.143(1) has been issued stating NIL Income
Tax demand amount. Hence first accepting the return
under Section 143(1) and thereafter issue notice to
reopen the assessment is mere change of opinion. There
shall not be any distinction between cases where
assessments were framed earlier under Section 143(3)
and cases where mere intimations were issued earlier
under section 143(1). Otherwise an assessee in whose
case the return was processed under section 143(1)
would be in a more vulnerable position than an assessee
in whose case there was a full-fledged scrutiny
assessment made under section 143(3). Whether the
return is put to scrutiny or is accepted without demur is
not a matter which is within the control of assessee, he
has no choice in the matter. Thus change of opinion is
not permissible u/s.147 of the Act.
C. In the case of GKN Driveshafts Ltd (259 ITR 19), the
Hon. Supreme Court made remarks, when a notice
u/s.148 of the Income Tax Act is issued, the proper
course of action for the notice is to file return and if he so
desires, to seek reasons for issuing notices. The AO is
bound to furnish reasons within a reasonable time. On
receipt of reasons, the noticee is entitled to file
objections to issuance of notice and the AO is bound to
dispose of the same by passing a speaking order.”
8. The objections, referred to above, came to be overruled
vide the order dated 3rd July, 2019 as under:-
“2.1 In this connection, with the objection raised in the
para (B)(a) of letter dated 03.07.2019, assessee have
stated that the property was purchased by M/s. Shree
Khodiyar Developers (Firm) and not by me. It is seen that
all the partners have signed the registered deed. Further
in this matter the copy of reason was provide in which it
was clearly mentioned that CIT(A) vide order dated
25.10.2017 have confirmed the addition of
Rs.14,68,843/- in hand of one of the partners of Firm of
Shree Khodiyar Developers (Shri Manish
Rameshwarprasad Guar). As the assessee Shri Manish
Rameshwarprasad Gaur has not contended in front of the
Ld. CIT(A), the genuineness of addition is confirmed.
Further in the para (b.1.) of the assessment order of the
said assessee, the AO has mentioned that Firm has not
submitted its return of income for the year under
consideration, so the investment remain unexplained. In
this case the reopening is as per the provisions of the I.T.
Act, 1961 is applicable.
2.2 Para (B)(b) the assessee has raised issued of to
inquire the matter independently of information received
and to satisfy himself. In this it is to state that the
information was already made available to the office and
in return no any capital gain was disclosed for the
A.Y.2012-13.
2.3 In relation to para B(c) it is to state that as per the
I.T. Act, 1961 the cases can be reopened for not more six
years, have elapsed from the end of the relevant
assessment year. Therefore, it is stated that the case is
reopened as per the provisions of the I.T. Act, 1961 and it
is within the time allowed.
2.4 In relation to Para B(d) of the letter dated
03.07.2019, it is to state that in this case the law is
enforceable as per the provisions of the I.T. Act, 1961.
Further, in this matter it is to state that material is
available on which the addition is made and in this there
is no any change of opinion as no any assessment was
made previously for the A.Y.2012-13.
3. Disposal of objection:
I have given due consideration to the submission of the
assessee. However, the same is not acceptable
therefore being disposed of by way of passing a speaking
order on the basis of the above facts. Further it is to also
to state that in place of the partner Shri Manish
Rameshwarprasad Gaur has option to approach Hon'ble
ITAT against addition made by the Ld. CIT (A). Once one
of the partner addition is confirmed by the Ld. CIT(A),
and the partner has no objection, the same rule is
applicable to all the partners. On this basis and other
facts the objection raised by the assessee is disposed of.
4. Reason to believe:-
The belief that the AO was not arbitrary or irrational. The
belief that income has escaped assessment was based
on reasons which were relevant and material also
available on the records. There exists a rational and
intelligible nexus between the reasons and belief
therefore. There was independent formation of opinion
by the AO as per the IT Act, 1961 that income has
escaped assessment as the addition is confirmed in case
of one of the partner. Therefore, the notice of reopening
is sustainable.
5. To conclude, it is emphasized that the reopening in
the case of the assessee is valid in the light of the facts
and the established law. The procedural requirements
such as proper recording of reasons, service of notices
and forwarding of reasons, have been met. In addition,
the matters raised by the assessee have been dealt with
in an elaborate manner. It is requested that the
assessee/its AR to to co-operate in the re-assessment
proceedings. The above order is passed in view of the
observation of the Hon'ble Supreme Court in the case of
GKN Diveshafts (India) Ltd. vs. ITO and others (259 ITR
19) (SC).”
9. Being dissatisfied with the aforesaid action, the writ
applicant is here before this Court with the present writ
application.
Submissions
on behalf of the writ applicant:-
10. Mr. Tushar Hemani, the learned senior counsel assisted
by Ms. Vaibhavi Parikh, the learned counsel appearing for the
writ applicant submitted that the Department seeks to reopen
the assessment broadly on the ground that in the case of one
of the partners of the partnership firm, the investments were
found to be not satisfactorily explained. The writ applicant,
being a co-partner, has also not been able to explain the
investments during the year under consideration. It is
submitted that the notice under Section 148 is not sustainable
in law as the properties in question were purchased by the
partnership firm wherein the writ applicant is one of the
partners. The writ applicant, in his individual capacity, is not
the purchaser of the two immovable properties.
11. It is argued that the condition precedent for resorting to
reopening is that there must be “escapement of income
chargeable to tax”. In the absence of escapement of any
income chargeable to tax, it is not open for the Department to
reopen the case of the assessee.
12. The learned senior counsel would submit that the
Department has failed to appreciate the following:-
“The writ applicant has not purchased the properties in
question.
Rather, such properties were purchased by the
partnership firm namely M/s. Khodiyar Developers”,
wherein the writ applicant is a partner. This fact was
conveyed to the respondent immediately upon receipt of
the reasons for reopening.
Even payment has been made by the said firm through
the banking channel.
The writ applicant was a signatory to the said
conveyance deeds in the capacity of partner of the said
firm.
Thus, the properties in question were purchased by firm
wherein writ applicant is a partner and not by the writ
applicant.”
13. It is argued that it is the partnership firm which derived
lawful title over the properties in question. In such
circumstances, no addition can be made in respect of the
alleged unexplained investment in the hands of the writ
applicant.
14. It is argued that merely because in the hands of one of
the partners, the investment is treated as unexplained, would
not necessarily mean that such investment should also be
treated as unexplained in the hands of the writ applicant. The
Department seeks to reopen the assessment merely on the
ground that certain investment made by some other person
has remained unexplained.
15. In the last, Mr. Hemani submitted that even otherwise
there cannot be any “reason to believe” for the following
reasons:-
“Investments in question were made by the partnership
firm and not by the writ applicant.
Such investments were made through banking channel.
The mere fact that certain investment has been made by
an assessee cannot be a ground so as to have reason to
believe that income chargeable to tax has escaped
assessment in the hands of such assessee.
If such a stand of the Department is entertained, then it
would result into a very dangerous proposition whereby
in each and every case where some investment is made,
the case of such assessee shall be reopened merely on
the alleged count that such investments are unexplained.
That has never been the intention of the Legislature.”
16. In such circumstances, referred to above, Mr. Hemani
prays that there being merit in his writ application, the same
may be allowed and the impugned notice may be quashed and
set aside.
Submissions
on behalf of the Revenue:-
17. Ms. Mauna Bhatt, the learned senior standing counsel
appearing for the Revenue has vehemently opposed this writ
application. She would submit that the writ application has
been preferred at a premature stage inasmuch as only a notice
under Section 148 read with section 147 of the Act has been
issued. It is argued that in the event if the final assessment
order is passed, then the assessee can always prefer an
appeal against such order before the CIT (A) and, thereafter,
before the Appellate Tribunal. Ms. Bhatt took the Court
through the averments made in the affidavit-in-reply upon
which due reliance has been placed on behalf of the Revenue.
“4. The facts are that in this case an information was
received from the ITO, Ward (1)(2)(4), Vadodara vide
letter dated 18.2.2019; in relation to the properties
purchased by the six co-owners i.e. Shri Nisharahmed
Vajir Pathan, Shri Manish R. Gaur, Shri Manoj H. Patel,
Shri Manish Mulchand Patel, Shri Hashitkumar D. Bhatt
and Shri Ganpat Amrutlal Patel at Block Nos.533, 534
mouje Palaswada, Dabhoi, Dist: Vadodara of
Rs.39,01,548/- and Rs.53,25,452/- respectively. The
assessee had also paid stamp duty and registration
charges of Rs.4,86,060/-.
5. It is submitted that the case of one of the partner
Shri Manish Rameshbhai Gaur was selected under the
CASS for A.Y.2012-13 and addition of Rs.14,68,843/- was
made for unexplained investment of the said properties,
During assessment proceedings of Shri Manish Gaur, it
was contended by him before the AO that the properties
belong to a firm however Shri Manishbhai Gaur failed to
prove that properties were purchased by firm viz. M/s.
Shri Khodiyar Developers bearing PAN No.ABWFS2637J.
6. It is submitted
that as observed in the assessment
order in the case of Shri Manish Gaur, the firm viz. Shri
Khodiyar Developers has not filed its return of income for
the year under consideration. In the said assessment
order, AO had further observed that firm is represented
by the partners and firm has not filed its return of income
for the year under consideration and therefore,
investment in purchase of land is treated as unexplained.
As the assessee viz. Manish Gaur failed to prove the
purchase of properties in question by the firm the share
of the property was equally divided and Rs.14,68,843/-
(1/6th of Rs.88,13,060/- total of the amount paid as
mentioned has been added to the total income for
A.Y.2012-13 in case of Shri Manish R. Gaur. Thereafter,
Shri Manish Gaur filed an appeal before the CIT (2),
Vadodara but he did not appear and CIT(A)(2), Vadodara
framed assessment under order dated 25.10.2017. In the
order dated 25.10.2017 it has been observed by CIT(A)
that the AO shall ensure assessment of unexplained
investment in the hands of the other partners of the firm.
7. It is submitted that order of CIT(A) being tangible
material in the hands of the AO of the petitionerassessee,
the AO verified the details and reopened the
assessment, which is valid and legal.
8. It is further submitted that the contention of the
petitioner that firm has purchased the property is not
correct. As observed in case of Mahesh Gaur no
evidence was placed on record to justify the ownership
by the firm. Moreover, the firm has not filed the return
of income for A.Y.2012-13 and therefore, the investment
could not be verified in hands of the firm. In this event
merely when there is no return of income by the firm nor
any evidence suggesting investment made by the firm
i.e. M/s.Shri Khodiyar Developers, it is clear that
investment has been made by the respective co-owners
from their unexplained income.
9. It is submitted that in this case original assessment
was framed under Section 143(1), therefore, there was
no opinion formed at the original assessment stage. Even
the information received which was the tangible material
was not available at the time of original assessment.
10. It is submitted that the contention of the petitioner
that there is no escapement of income chargeable to tax
since the property in question were purchased by
partnership firm wherein the petitioner is partner is
without any basis. As the firm has not filed its return of
income, there is no evidence to show that the property
was purchased by firm. Moreover, the order of CIT(A) in
the case of co-owner is the tangible material in the hands
of AO to form a reasonable belief that income chargeable
to tax has escaped assessment.
11. The contention of the petitioner that there is no
reason to believe that income chargeable to tax has
escaped assessment is not correct. As stated in the
earlier para, assessment framed in case of one of the coowners
which has been upheld by the order of CIT(A)
supported by the fact that no return has been filed by
the partnership firm, is the tangible material to form
belief that income chargeable to tax has escaped
assessment.
12. It is submitted that the contention of the petitioner
that reopening is based on the borrower satisfaction is
not correct. As stated earlier, it is reiterated that AO
based on the information received verified the details.
Even in the order of the CIT(A) it has been directed to
verify the details in the case of co owners. There is no
evidence to support that the purchase was made by the
partnership firm. Therefore, the belief formed by the AO
is based on the information available on record and
sufficient to form a belief that income chargeable to tax
has escaped assessment. It is further submitted that at
this stage A.O. Is not required to conclusively prove the
escapement of income. In the present case there is
tangible material available in the hands of the AO to
form a belief that income chargeable to tax has escaped
assessment and therefore, notice under Section 148 is
legal and valid notice.”
18. On 7th January, 2021, this Court passed the following
order:-
“This matter was heard yesterday and was adjourned to
come up today to enable Ms. Bhatt, the learned Senior
Standing Counsel appearing for the Revenue to take
appropriate instructions with regard to the other partners
of the partnership namely M/s. Shree Khodiyar
Developers. Ms. Bhatt has been able to collect the
necessary information and would like to place it on
record by way of an additional affidavit. Post this matter
on 18th January 201 on top of the Board. By that time,
the additional affidavit shall be placed on the record of
the case.”
19. Pursuant to the aforesaid order passed by this Court
dated 7th January, 2021, an additional affidavit-in-reply has
been filed on behalf of the Revenue stating as under:-
“1. This additional affidavit is filed to place further
information/documents on record. It is submitted that as
stated in the affidavit dated 24.11.2019, income
chargeable to tax has escaped assessment and
therefore, notice under Section 148 was issued for
A.Y.2012-13. The assessee had purchased two properties
valuing Rs.88,13,060/- where his share is 1/6th in the
property. Though purchased, the said property was not
shown in the return of income filed. The objection of the
assessee that the property was purchased by firm and
not by partners was considered in the order disposing of
objections, therefore, investment remained unexplained.
Thus, there is no illegality in issuing notice to the
assessee.
2. It is submitted that M/s. Khodiyar Developers is
partnership firm consisting of five partners. Out of these
ive partners in case of partner of M/s.Shri Manish
Rameshwarprasad Gaur and Shri Ganpatbhai Amthabhai
Patel reassessment proceedings were initiated. The
additions u/s.69 of the Act were made as unexplained
investment in both the cases and CIT(A) has confirmed
the addition made by the AO. In other three partners
reassessment proceedings were not initiated. Details of
assessment proceedings in relation to all five partners of
M/s.Khodiyar Developers is annexed hereto and marked
as Annexure-R.1.
3. It is submitted that income chargeable to tax has
escaped assessment. No scrutiny was done at the
original assessment stage. Moreover in absence of return
filed by the firm, verification was not done at the original
assessment stage. Therefore, if the Hon'ble Court is of
the opinion that the notice under Section 148 ought to
have been issued to the firm and not to the partners then
it is submission of the respondent that in view of Section
150 o the Act, findings/directions may be issued so that
appropriate proceedings under the provisions of the Act
can be initiated against the firm.
4. In view of the above, there is no illegality in
initiation of the proceedings u/s.148 of the Act.”
20. Ms. Bhatt vehemently submitted that the Department
could be said to be justified in reopening the assessment of
the writ applicant for the relevant year as the partnership firm
had failed to file its return of income. The Department wants
to understand the source of funds pumped in by the writ
applicant in the partnership firm. It has not been explained by
the writ applicant in his return of income for the relevant year.
It is pointed out that the assessment was under Section
143(1) of the Act and not Section 143(3) of the Act.
21. In the last, Ms. Bhatt submitted that if this Court is
inclined to hold that the reopening is not sustainable in law,
then the Department may be permitted to invoke Section 150
of the Act for the purpose of proceeding against the partnership
firm.
22. In such circumstances, referred to above, Ms. Bhatt prays
that there being no merit in this writ application, the same may
be rejected.
23. Having heard the learned counsel appearing for the
parties and having gone through the materials on record, the
following two questions fall for our consideration;
(I) Whether the impugned notice of reassessment issued
under Section 148 of the Act is sustainable in law on the
reasons as assigned by the Department? and
(ii) Whether Section 150 of the Act has any applicability so
far as the present case is concerned?. In other words, whether
by virtue of Section 150 of the Act, the Department can now
proceed against the partnership firm?
24. The following principles of law are discernible from the
various decisions of the Supreme Court and the High Courts so
far as reopening of the assessment under Section 147 of the
Act is concerned.
(i) The Court should be guided by the reasons recorded for
the reassessment and not by the reasons or explanation given
by the Assessing Officer at a later stage in respect of the
notice of reassessment. To put it in other words, having regard
to the entire scheme and the purpose of the Act, the validity
of the assumption of jurisdiction under Section 147 can be
tested only by reference to the reasons recorded under
Section 148(2) of the Act and the Assessing Officer is not
authorized to refer to any other reason even if it can be
otherwise inferred or gathered from the records. The
Assessing Officer is confined to the recorded reasons to
support the assumption of jurisdiction. He cannot record only
some of the reasons and keep the others upto his sleeves to be
disclosed before the Court if his action is ever challenged in a
court of law.
(ii) At the time of the commencement of the reassessment
proceedings, the Assessing Officer has to see whether there is
prima facie material, on the basis of which, the department
would be justified in reopening the case. The sufficiency or
correctness of the material is not a thing to be considered at
that stage.
(iii) The validity of the reopening of the assessment shall
have to be determined with reference to the reasons recorded
for reopening of the assessment.
(iv) The basic requirement of law for reopening and
assessment is application of mind by the Assessing Officer, to
the materials produced prior to the reopening of the
assessment, to conclude that he has reason to believe that
income has escaped assessment. Unless that basic
jurisdictional requirement is satisfied-a postmortem exercise of
analysing the materials produced subsequent to the
reopening will not make an inherently defective reassessment
order valid.
(v) The crucial link between the information made available
to the Assessing Officer and the formation of the belief should
be present. The reasons must be self evident, they must
speak for themselves.
(vi) The tangible material which forms the basis for the belief
that income has escaped assessment must be evident from a
reading of the reasons. The entire material need not be set
out. To put it in other words, something therein, which is
critical to the formation of the belief must be referred to.
Otherwise, the link would go missing.
(vii) The reopening of assessment under Section 147 is a
potent power and should not be lightly exercised. It certainly
cannot be invoked casually or mechanically.
(viii) If the original assessment is processed under Section
143(1) of the Act and not Section 143(3) of the Act, the
proviso to Section 147 will not apply. In other words, although
the reopening may be after the expiry of four years from the
end of the relevant assessment year, yet it would not be
necessary for the Assessing Officer to show that there was any
failure to disclose fully or truly all the material facts necessary
for the assessment.
(ix) In order to assume jurisdiction under Section 147 where
assessment has been made under sub-section (3) of section
143, two conditions are required to be satisfied;
(i) The Assessing Officer must have reason to believe that
the income chargeable to tax has escaped assessment;
(ii) Such escapement occurred by reason of failure on the
part of the assessee either (a) to make a return of income
under section 139 or in response to the notice issued under
sub-section (1) of Section 142 or Section 148 or (b) to disclose
fully and truly all the material facts necessary for his
assessment for that purpose.
(x) The Assessing Officer, being a quasi judicial authority is
expected to arrive at a subjective satisfaction independently
on an objective criteria.
(xi) While the report of the Investigation Wing might
constitute the material, on the basis of which, the Assessing
Officer forms the reasons to believe, the process of arriving at
such satisfaction should not be a mere repetition of the report
of the investigation. The reasons to believe must demonstrate
some link between the tangible material and the formation of
the belief or the reason to believe that the income has escaped
assessment.
(xii) Merely because certain materials which is otherwise
tangible and enables the Assessing Officer to form a belief that
the income chargeable to tax has escaped assessment, formed
part of the original assessment record, per se would not bar
the Assessing Officer from reopening the assessment on the
basis of such material. The expression “tangible material”
does not mean the material alien to the original record.
(xiii) The order, disposing of objections or any counter affidavit
filed during the writ proceedings before the Court cannot be
substituted for the “reasons to believe.
(xiv) The decision to reopen the assessment on the basis of
the report of the Investigation Wing cannot always be
condemned or dubbed as a fishing or roving inquiry. The
expression “reason to believe” appearing in Section 147
suggests that if the Income Tax Officer acts as a reasonable
and prudent man on the basis of the information secured by
him that there is a case for reopening, then Section 147 can
well be pressed into service and the assessments be reopened.
As a consequence of such reopening, certain other facts may
come to light. There is no ban or any legal embargo under
Section 147 for the Assessing Officer to take into
consideration such facts which come to light either by
discovery or by a fuller probe into the matter and reassess the
assessee in detail if circumstances require.
(xv) The test of jurisdiction under Section 143 of the Act is not
the ultimate result of the inquiry but the test is whether the
income tax officer entertained a “bona fide” belief upon the
definite information presented before him. Power under this
section cannot be exercised on mere rumours or suspicions.
(xvi) The concept of “change of opinion” has been treated as a
built in test to check abuse. If there is tangible material
showing escapement of income, the same would be sufficient
for reopening the assessment.
(xvii) It is not necessary that the Income Tax Officer should
hold a quasi judicial inquiry before acting under Section 147. It
is enough if he on the information received believes in good
faith that the assesee's profits have escaped assessment or
have been assessed at a low rate. However, nothing would
preclude the Income Tax Officer from conducting any formal
inquiry under Section 133(6) of the Act before proceeding for
reassessment under Section 147 of the Act.
(xviii) The “full and true” disclosure of the material facts would
not include that material, which is to be used for testing the
veracity of the particulars mentioned in the return. All such
facts would be expected to be elicited by the Assessing Officer
during the course of the assessment. The disclosure required
only reference to those material facts, which if not disclosed,
would not allow the Assessing Officer to make the necessary
inquiries.
(xix) The word “information” in Section 147 means “instruction
or knowledge derived from the external source concerning the
facts or particulars or as to the law relating to a matter bearing
on the assessment. An information anonymous is information
from unknown authorship but nonetheless in a given case, it
may constitute information and not less an information though
anonymous. This is now a recognized and accepted source for
detection of large scale tax evasion. The non-disclosure of the
source of the information, by itself, may not reduce the
credibility of the information. There may be good and
substantial reasons for such anonymous disclosure, but the
real thing to be looked into is the nature of the information
disclosed, whether it is a mere gossip, suspicion or rumour. If
it is none of these, but a discovery of fresh facts or of new and
important matters not present at the time of the assessment,
which appears to be credible to an honest and rational mind
leading to a scrutiny of facts indicating incorrect allowance of
the expense, such disclosure would constitute information as
contemplated in clause (b) of Section 147.
(xx) The reasons recorded or the material available on record
must have nexus to the subjective opinion formed by the A.O.
regarding the escapement of the income but then, while
recording the reasons for the belief formed, the A.O. is not
required to finally ascertain the factum of escapement of the
tax and it is sufficient that the A.O had cause or justification to
know or suppose that the income had escaped assessment
[vide Rajesh Jhaveri Stock Brokers (P.) Ltd.'s case (supra)]. It is
also well settled that the sufficiency and adequacy of the
reasons which have led to the formation of a belief by the
Assessing Officer that the income has escaped the assessment
cannot be examined by the court.
25. The powers under section 147 of the Act are special
powers and peculiar in nature where a quasi-judicial order
previously passed after full hearing and which has otherwise
become final is subject to reopening on certain grounds.
Ordinarily, a judicial or quasi-judicial order is subject to appeal,
revision or even review if statute so permits but not liable to
be re-opened by the same authority. Such powers are vested
by the Legislature presumably in view of the highly complex
nature of assessment proceedings involving large number of
assessees concerning multiple questions of claims, deductions
and exemptions, which assessments have to be completed in
a time frame. To protect the interest of the revenue, therefore,
such special provisions are made under section 147 of the Act.
However, it must be appreciated that an assessment
previously framed after scrutiny when reopened, results into
considerable hardship to the assessee. The assessment gets
reopened not only qua those grounds which are recorded in
the reasons, but also with respect to entire original
assessment, of course at the hands of the revenue. This
obviously would lead to considerable hardship and
uncertainty. It is precisely for this reason that even while
recognizing such powers, in special requirements of the
statute, certain safeguards are provided by the statute which
are zealously guarded by the courts. Interpreting such
statutory provisions courts upon courts have held that an
assessment previously framed cannot be reopened on a mere
change of opinion. It is stated that power to reopening cannot
be equated with review.
26. At the cost of repetition, we shall once again look into the
reasons for the issue of notice under Section 148 of the Act.
The partnership firm is said to have purchased two immovable
properties for total sale consideration of Rs.83,13.060/-
including the registration and stamp charges. According to
the Assessing Officer, the 1/6th share of the writ applicant
herein, as one of the partners, comes to Rs.14,68,843/-. The
Assessing Officer proceeds on the footing as if all the partners
equally contributed for the purchase of the two properties.
The Assessing Officer, thereafter, proceeds on the footing
that the investment of Rs.14,68,843/- remains unexplained by
the writ applicant in his individual return filed by him in the ITR
Form:-ITR-4 for A.Y.201-13. The Assessing Officer, thereafter,
proceeds on the footing that in the case of a co-partner, the
assessment was reopened and an appeal before the CIT(A) is
pending against the assessment order. In such circumstances,
referred to above, the Assessing Officer, ultimately, concludes
that the writ applicant had failed to fully and truly disclose his
investment of his share in the two properties in his individual
return of income.
27. It is also the case of the Revenue that the partnership
firm had failed to file its return for the relevant assessment
year. Of course, in this regard, the Department thought fit
not to initiate any proceedings against the partnership firm
including any criminal prosecution.
28. A lot was argued on behalf of the Revenue as regards the
rights and liabilities of a partnership firm and also as regards
the legal status of a partnership firm. We may give a fair idea
in this regard by referring to few judgments.
29. In Addanki Narayanappa v. Bhaskara Krishnappa ,
1966 AIR 1300, the Supreme Court, while considering a
question of similar nature, held as under (page 1303) :
"From a perusal of these provisions it would be
abundantly clear that whatever may be the character of
the property which is brought in by the partners when
the partnership is formed or which may be acquired in
the course of the business of the partnership, it becomes
the property of the firm and what a partner is entitled to
is his share of profits, if any, accruing to the partnership
from the realisation of this property, and upon dissolution
of the partnership to a share in the money representing
the value of the property. No doubt, since a firm has no
legal existence, the partnership property will vest in all
the partners and in that sense every partner has an
interest in the property of the partnership. During the
subsistence of the partnership, however, no partner can
deal with any portion of the property as his own. Nor can
he assign his interest in a specific item of the partnership
property to any one. His right is to obtain such profits, if
any, as fall to his share from time to time and upon the
dissolution of the firm to a share in the assets of the firm
which remain after satisfying the liabilities set out in
Clause (a) and sub-clauses (i), (ii) and (iii) of Clause (b) of
Section 48."
30. So also in Malabar Fisheries Co. v. CIT, 1980 AIR 176,
the Supreme Court, while considering the provisions of
Sections 2(47), 34(3)(b) and 155(5) of the Income-tax Act, held
as under (head-note) :
"A partnership firm under the Indian Partnership Act,
1932, is not a distinct legal entity apart from the partners
constituting it and equally in law the firm as such has no
separate rights of its own in the partnership assets and
when one talks of the firm's property or the firm's assets
all that is meant is property or assets in which all
partners have a joint or common interest. It cannot,
therefore, be said that, upon dissolution, the firm's rights
in the partnership assets are extinguished. It is the
partners who own jointly or in common the assets of the
partnership and, therefore, the consequence of the
distribution, division or allotment of assets to the
partners which flows upon dissolution after discharge of
liabilities is nothing but a mutual adjustment of rights
between partners and there is no question of any
extinguishment of the firm's rights in the partnership
assets amounting to a transfer of assets within the
meaning of Section 2(47) of the Income-tax Act, 1961.
There is no transfer of assets involved even in the sense
of any extinguishment of the firm's rights in the
partnership assets when distribution takes place upon
dissolution."
31. The Madras High Court had an occasion to consider a
question of similar nature while dealing with Section 5(1)(iv) of
the Wealth-tax Act, 1957, in R. Venkatavaradha Reddiar R.
v. CWT, [1995] 214 ITR 76. In that decision, this court after
considering all the decisions on this aspect, culled out the legal
principles in the following manner (page 90) :
"(1) a firm has no legal existence and as such it cannot
hold any property ;
(2) it is the partners, who own the partnership property
as such;
(3) partners alone should have the benefit of the
exemption under Section 5(1)(iv), when their
individual
assessments are taken up to the extent of their
respective shares in the net wealth of the partnership
firm ;
(4) the mere fact that a partner cannot claim to be
entitled to any portion of the property owned by a firm as
exclusively belonging to him will not completely
disentitle him from seeking the benefit of exemption
under Section 5(1)(iv) of the Act, so long as he is the
owner of the house property even though as a partner in
a firm ;
(5) For the purpose of the exemption under Section 5(1)
(iv), it is not necessary that the partner should be able to
say that the property or any specific part thereof
exclusively belongs to him."
32. The Madhya Pradesh High Court in Ratansi Narayan
Patel v. CIT, [1988] 173 ITR 547, while considering the
provisions of Sections 2(29), 2(42A) and 45 of the Income-tax
Act, 1961, held as under (headnote) :
"The whole concept of partnership is to embark upon a
joint venture and for that purpose to bring in as capital,
money or even property including immovable property
and once that is done, whatever is brought in would
cease to be the exclusive property of the person who
brought it in. A partner has no exclusive right over any
such property and he cannot also exercise any right in
such property even to the extent of his share in the
partnership because his right during the subsistence of
the partnership is to get his share of profits from time to
time as may be agreed upon among the partners and
after dissolution of the firm to get the value of his share
in the net partnership assets as on the date of
dissolution. These are restrictions over the right of
ownership of partners and they do not militate against
the legal position that the partners collectively own the
partnership property. The property really vests in the
partners collectively in proportion to their shares."
33. In CIT v. K. Saraswathi Ammal, [1981] 127 ITR 404,
this court, while considering the provisions of Section 85 of the
Income-tax Act, 1961, as modified by Section 31 of the
Finance Act, 1968, extracted a passage, which runs as under
(page 407) :
"The property of the firm' is statutorily defined in Section
14 of the Partnership Act ; the property that has been
brought in by the partners and the property that is
acquired by a firm will be the property of the firm.
According to Section 14 of the Partnership Act, when one
talks of the property of the firm, it has to be remembered
that a firm as such is not a legal entity ; nor can a firm as
such, according to the English concept, hold property.
This is the reason why the Supreme Court in two
decisions held that when the firm is dissolved and the
partnership assets are distributed among the partners,
there will be no transfers of the property of the firm in
favour of the partners so as to attract the provisions of
the Income-tax Act, for capital gains. The decisions are
CIT v. Bankey Lal Vidya , CIT v. Dewas Cine Corporation .
These two decisions clearly show that in general law, the
firm cannot be treated as the owner of the shares in
Kalinga Tubes Ltd. But, for the purpose of the Income-tax
Act, the firm has been made a legal entity just as a
person, as a firm is included in the definition of the term
'person' under the Income-tax Act. The firm is a
separate
entity for the purpose of assessment and, therefore, a
firm will be entitled to the exemption under Section 85.
Whatever that be, we are not concerned with that now,
and we do not wish to express any opinion on that
matter. As far as the individuals who make up the
partners of the firm are concerned, we have no doubt
that the properties, which are called the assets of the
firm, really vest in the partners of the firm. This has also
been said by the Supreme Court in the decision in
Narayanappa v. Bhaskara Krishnnappa, ."
34 . In K.I. Viswambharan and Brothers v. CIT, [1973] 91
ITR 588, a Full Bench of the Kerala High Court, while
considering the provisions of Sections 45, 54(i) and 114 of the
Income-tax Act, 1961, Section 2 of the Finance (No.
2) Act,
1967, and Section. 14 of the Indian Partnership Act, 1932, held
(head-note) :
"That for purposes of assessment to tax, the Income-tax
Act treats a registered firm as an entity distinct from the
partners. Under the specific provisions of the Partnership
Act relating to the property of a firm and the judicial
pronouncements on the matter, a firm is legally
competent to own or hold property and also to deal with
such property. Any property or gain derived by a firm in
pursuance of the sale of a capital asset, owned or held by
the firm is, therefore, exigible to tax in accordance with
the relevant provisions of the Income-tax Act."
35. Thus, the ratio discernible from the aforesaid case law is
that the abstract proposition that the partnership is not a legal
entity is not correct. It is true that under the law of
partnership, a firm has no legal existence apart from its
partners and it is merely a compendious name to describe its
partners. But under the Income Tax Law, the position is
different. The firm and the partners are distinct assessable
entities. The law has thus for some specific purposes relaxed
its general rigid notions and extended a limited personality to
a firm. There is nothing in the partnership law to suggest that
a firm cannot be treated as an entity for the purpose of dealing
with the property.
36. Bearing the aforesaid in mind, we need to consider the
question whether or not the writ applicant was obliged in law
to disclose the investment alleged to have been made by him
in the partnership firm for the purpose of the purchase of the
two immovable properties. The answer to such question is
whether there had been a failure on the part of the writ
applicant to disclose fully and truly all material facts necessary
for the assessment. We are of the view that it would depend on
the nature of the obligation which is enjoined upon the
assessee in this regard by virtue of various provisions of the
Income Tax Act. If an assessee fails to disclose or furnish to
the Assessing Officer, all such facts and other related
information which he is obliged under the law to disclose, and
which are necessary for the purpose of making his assessment,
then surely he can be accused of having failed to disclose fully
and truly all the material facts for the purpose of his
assessment. It is a trite law by now commencing from the
decision of the Supreme Court rendered in the case of
Calcutta Discount Co. Ltd. vs. ITO, (1961) 41 ITR 191 that it is
always the duty of an assessee to disclose fully and truly all
primary facts, but not inferential facts, which are necessary
and relevant for the purpose of making the assessment by the
Assessing Officer. But, as stated above, the nature of
disclosure that the assessee is obliged to do so by the statute
will necessarily depend upon the nature of information or
disclosure that the assessee is obliged to do so by the statute.
In the instant case, originally, the assessee filed his return in
Form ITR-4 wherein the disclosure of investment is not requires
to be disclosed as writ applicant had disclosed his income on
presumptive basis under Section 44AD of the Act and his
assessment was completed accordingly for the relevant
assessment year. We are of the view that the writ applicant
was was not obliged to furnish any information as regards the
partnership firm or the investment if any in the partnership
firm. This issue, according to us, is not, at all, germane for the
purpose of Section 148 of the Act.
37. After the receipt of the return of income either under
Section 139(1) or under Section 139(2) the ITO has power
under Section 143(1) to make the assessment without
requiring the presence of the assessee or production by him of
any evidence. This means the ITO believes the assessee and
accepts the returned income without any inquiry about the
correctness or completeness of the return of income filed. If
the ITO is not satisfied about the correctness or completeness
of the income returned, he has been empowered under two
different provisions of the Act to embark upon an enquiry. One
provision is Section 142(1) of the Act which empowers the ITO
to issue a notice to an assessee and call for such information
on such points as he considers necessary for the purpose of
making assessment. Once such notice is issued by the ITO
under Section 142(1) it is incumbent upon the assessee to
furnish and disclose all such information as is required and
demanded by the ITO. The other provision is Section 143(2) of
the Act which also empowers the ITO to issue a notice to any
person who has filed the return either under Section 139(1) or
under Section 139(2) to appear or cause appearance and to
produce before him any evidence as the assessee may rely in
support of the return filed. The notices under Section 142(1)
and under Section 143(2) are issued to ensure that the income
declared in the return is correct and complete. After issue of
notices under Sections 142 and 143 the ITO is then expected
to make the assessment after taking into consideration such
evidence as the person concerned wanted to produce as also
such other evidence as he might have directed the assessee to
produce on the points raised by him. On analysing these
provisions we see that the beginning is made in this process of
assessment by the filing of return by the assessee and he is
obliged and commanded to furnish such particulars of his
income as are laid down and mentioned in the various columns
of the return of income form prescribed by the relevant rules.
In other words, the assessee is required to truly and fully
supply the information and other particulars sought for in the
various columns of the prescribed form of return of income.
Now if the Assessing Officer was of the opinion that the
Information conveyed as per the prescribed form of return of
income was complete, correct and sufficient for making the
assessment, he could proceed and assess the person filing the
return on the basis of such return and at that stage no
question, of the assessee furnishing any information other than
that required to be furnished in the prescribed form of return,
could arise. It, therefore, follows that if the assessee discloses
true and full information which he is required to supply in the
prescribed form of return no question of his failing to disclose
any other particulars of his income at that stage could arise.
Then the next stage in the process of making an assessment
upon a person was where a return is filed by him in the
prescribed form but the ITO felt that the information conveyed
by such person in the prescribed return form was inadequate
and required further inquiry and verification for the purpose of
making assessment, the ITO then acts by issuing notices,
requiring the assessee to produce such evidence, material,
particulars or information either upon his direction under
Section 142(1) or under Section 143(2) directing the assessee
to produce such evidence as he (assessee) may rely in support
of the return filed. It is at this third and crucial stage when the
assessee is required by the ITO to elucidate on some particular
points that the assessee has been obliged to disclose truly and
fully all necessary facts in respect of those points to enable the
assessing officer to make a valid and proper assessment.
Therefore, unless this third stage was reached there can be no
obligation on an assessee to disclose and produce any
evidence in respect of points other than those in respect of
which the assessee was, as provided in the form of return,
obliged to furnish.
38. As far back as 1969 the Supreme Court was concerned
with a question whether or not an assessee is bound to
disclose in its return information which is relevant for his
assessment but which is not specifically required to be
supplied or furnished in the prescribed form, came up for
consideration in the case of V.D.M.RM.M.RM. Muthiah Chettiar
(supra). In that case one Muthiah who had been assessed to
income-tax in respect of his share in the income of a firm as
also income from other sources, while disclosing the amount of
income from the firm received by his sons did not disclose the
facts that they were minors. The ITO while assessing Muthiah
did not include in his income the share income of the minor
sons received from the firm in which Muthiah was a partner as
provided in Section 16(3)(a)(ii) of the Income-tax Act, 1922.
After the completion of the assessment the ITO realised that
the share income of the minor sons from the partnership firm
in question was liable to be included in the income of Muthiah
under the provisions of Section 16(3)(a)(ii) of the 1922 Act. The
Assessing Officer, therefore, initiated proceedings under
Section 34(1)(a) of the 1922 Act [corresponding to Section
147(a) of the Income-tax Act, 1961] on the ground that the
information given by Muthiah in his return was not full in the
sense that he had not stated therein that his three sons who
had received a share in the income of the partnership firm
were in fact, minors. After examining the facts of the case the
Hon'ble Supreme Court held that Muthiah was not guilty of
failure to disclose true and full facts relating to his assessment.
The Supreme Court observed at p. 187 as under:
"The Act and the Rules accordingly impose no obligation
upon the assessee to disclose to the ITO in his return
information relating to income of any other person by law
taxable in his hands. “
39. It was then held by the Supreme Court in the said case
that the Assessing Officer cannot resort to Section 34(1)(a) of
the 1922 Act and reopen the assessment. This judgment of the
Supreme Court was followed by the Hon'ble Calcutta High
Court in the cases of Radheshyam Ladia v. ITO [1971] 82
ITR247and also Madanlal Maheswart v. ITO[1973] 87 ITR 295.
40. The aforesaid observations made by the Supreme Court
clearly make out that while filing a return an assessee is not
bound or obliged to disclose any information in relation to any
fact other than what is required to be supplied and furnished
by him in the various columns of the prescribed form of return
of income or which he is bound under the provisions of the Act
to furnish even though that fact may otherwise be relevant for
the purpose of his assessment. For the simple reason that such
information has not been furnished in the return it would not
mean that the assessee had failed or omitted to disclose fully
and truly all material facts which are necessary for the purpose
of his assessment.
41. In the aforesaid context, we may also refer to a decision
of this High Court in the case of Bhavik Bharatbhai Padia
vs. Income Tax Officer Ward 3(3)(1), rendered in the
Special Civil Application No.17021 of 2018, decided on
19.08.2019. One of us J.B. Pardiwala, J., speaking for the
Bench, observed as under;
“16. It is not in dispute that the form of return of income
i.e. ITR2, then in force had no separate column for the
disclosure of any investment. The question is whether
the assessee was under any legal obligation to disclose
about his investment of Rs.50,00,000/in the LIC policies.
In the aforesaid context, we would like to refer to and
rely upon a decision of the Supreme Court in the case of
CIT Vs. Smt. P.K. Kochammu Amma reported in [1980]
125 ITR 624 (SC).
17.In that case, the assessee filed her return for the
assessment year 196465, disclosing therein income from
property and income from other sources and against
item (b), under the column “Profits and gains of business
and profession” stated: “please ascertain from the firms’
files”.
Though the prescribed form of return did not contain a
separate column for that purpose, there was a note in
the return stating that, if the income of any other person
is includible in the total income of the assessee under the
provisions of the Incometax Act, 1961, inter alia, of
Section 64, such income should also be shown under the
appropriate head. The respondent, however, did not
show in the return the amounts representing the shares
of her husband and minor daughter in the two firms,
though they were includible in her total income under
Section 64(1)(I) and (iii). The question was whether
penalty could be imposed on the respondent under
Section 271(1)(c), on the ground that the assessee had
concealed the particulars of her income because she had
not shown the shares of her husband and her minor
daughter in the two firms as forming part of the total
income in the return submitted by her. The Supreme
Court held (at page 627):
“There is a decision of this court which is directly in point
and it concludes the determination of the question
arising in this appeal against the Revenue but before we
refer to that decision, we might first examine the
question on principle as a matter of pure interpretative
exercise. Section 271, Subsection (1), Clause (c),
provides for imposition of penalty on an assessee if it is
found, inter alia, that the assessee has concealed the
particulars of ‘his income’. The question is what is the
scope and content of the words ‘his income’ occurring in
this penal provision. Do they refer only to the income of
the assessee himself or do they also take in the income
of others which is liable to be included in the
computation of the total income of the assessee by
reason of the relevant provisions of the Act, such as
Section 64, Subsection (1), Clauses (I) and (iii) ? The
answer to this question obviously depends upon as to
what is ‘his income’ which the assessee is liable to
disclose for the purpose of assessment, for, concealment
can only be of that which one is bound to disclose and
yet fails to do so. Section 139 provides for filing of a
return of income by an assessee and Subsection (1) of
this section lays down that every person whose total
income during the previous year exceeds the maximum
amount which is not chargeable to income tax, shall
furnish a return of his income in the prescribed form and
verified in the prescribed manner, and setting forth such
other particulars as may be prescribed. The return of
income is required to be filed in order to enable the
Revenue authorities to make a proper assessment of tax
on the assessee. It must, therefore, follow a fortiori that
the assessee must disclose in the return every item of
income which is liable to be taxed in his hands as part of
his total income. The charge of income tax is levied by
Section 4 on the total income of the assessee, and ‘total
income’ is defined in Section 2, Subsection (45), to mean
‘the total amount of income referred to in Section 5
computed in the manner laid down’ in the Act. It is no
doubt true that the definition of ‘total income’ in Section
2, Subsection (45), refers to Section 5 and this latter
provision lays down that all income, profits and gains
accrued or arising to the assessee or received by or on
behalf of the assessee shall be liable to be included in his
total income but this provision is subject to the other
provisions of the Act, and, therefore, if the income of any
other person is declared by any provision of the Act to be
includible in computing the total income of the assessee,
such income would form part of the total income exigible
to tax under Section 4 of the Act. Now, Section 64,
Subsection (1), is one such provision which provides for
inclusion of the income of certain other persons in
computing the total income of an assessee. Clauses (I)
and (iii) of this subsection provide that in computing the
total income of an assessee there shall be included all
such income as arises directly or indirectly to the spouse
of such assessee from the membership of the spouse in a
firm carrying on a business in which such individual is a
partner as also to a minor child of such assessee from
the admission of the minor to the benefits of the
partnership firm. It is clear from this provision that
though the share of the spouse or minor child in the
profits of a partnership firm in which the assessee is a
partner is not the income of the assessee but is the
income of such spouse or minor child, it is liable to be
included in computing the total income of the assessee,
and it would be assessable to tax in the hands of the
assessee. The total income of the assessee chargeable to
tax would include the amounts representing the shares
of the spouse and minor child in the profits of the
partnership firm. If this be the correct legal position,
there can be no doubt that the assessee must disclose in
the return submitted by him, all amounts representing
the shares of the spouse and minor child in the profits of
the partnership firm in which he is a partner, since they
form part of his total income chargeable to tax. The
words ‘his income’ in Section 139, Subsection (1), must
include every item of income which goes to make up his
total income assessable under the Act. The amounts
representing the shares of the spouse and minor child in
the profits of the partnership firm would be part of ‘his
income’ for the purpose of assessment to tax and would
have to be shown in the return of income filed by him.
The assessee then contended that the return of income
which was required to be filed by her under Section 139,
Subsection (1), was a return in the prescribed form and
the form of the return prescribed by Rule 12 of the
Incometax Rules, 1962, did not contain any column for
showing the income of the spouse and minor child which
was liable to be included in the total income of the
assessee under Section 64, Subsection (1), Clauses (I)
and (iii), and there was, therefore, no obligation on the
assessee to disclose this income in the returns filed by
her. This contention is also, in our opinion, fallacious and
deserves to be rejected. It is true that the form of return
prescribed by Rule 12, which was in force during the
relevant assessment year did not contain any separate
column for showing the income of the spouse and minor
child liable to be included in the total income of the
assessee, but did contain a note stating that if the
income of any other person is includible in the total
income of the assessee under the provisions, inter alia, of
Section 64, such income should also be shown in the
return under the appropriate head. This note clearly
required the assessee to show in the return under the
appropriate head of income, namely, ‘profits and gains of
business or profession’, the amounts representing the
shares of the husband and minor daughter of the
assessee in the profits of the two partnership firms. But
even so, the assessee failed to disclose these amounts in
the return submitted by her and there was, therefore,
plainly and manifestly a breach of the obligation imposed
by Section 139, Subsection (1), requiring the assessee to
furnish a return of her income in the prescribed form. It is
difficult to see how the note in the prescribed form of the
return could be ignored by the assessee and she could
contend that, despite the note, she was not liable to
show in her return the amounts representing the shares
of her husband and minor, daughter in the two
partnership firms. The contention of the assessee, if
accepted, would render the note meaningless and futile
and turn it into dead letter and that would be contrary to
all recognised canons of construction. There can be no
doubt that the assessee was bound to show in her return
the amounts representing the shares of her husband and
minor daughter in the two partnership firms and in failing
to do so, she was guilty of concealment of this item of
income which plainly attracted the applicability of
Section 271, Subsection (1), Clause (c).”
18.Although, on this view, the order imposing penalty on
the assessee could have been sustained but, in view of
the decision of the Supreme Court in V.D.M.RM.M.RM.
Muthiah Chettiar v. CIT [1969] 74 ITR 183, which is a
larger Bench decision where a different view had been
taken by a Bench of three judges of the Supreme Court,
the contention of the assessee that imposition of penalty
in his case is illegal had to be upheld. There, the
Supreme Court proceeded to hold (at page 629 of 125
ITR):
“It was held in this case (Muthiah Chettiar) that even if
there were any printed instructions in the form of the
return requiring the assessee to disclose the income
received by his wife and minor child from a firm in which
the assessee was a partner, there was, in the absence in
the return of any head under which the income of the
wife or minor child could be shown, no obligation on the
assessee to disclose this item of income, and the
assessee could not be deemed to have failed or omitted
to disclose fully and truly all material facts necessary for
his assessment within the meaning of Section 34(1)(a) of
the Indian Income tax Act, 1922. With the greatest
respect to the learned judges who decided this case, we
do not think, for reasons already discussed, that this
decision lays down the correct law on the subject, and
had it not been for the fact that since July 1, 1972, the
form of the return prescribed by Rule 12 has been
amended and since then, there is a separate column
providing that ‘income arising to spouse/minor child or
any other person as referred to in Chapter V of the Act’
should be shown separately under that column and
consequently there is no longer any scope for arguing
that the assessee is not bound to disclose such income in
the return to be furnished by him, we would have
referred the present case to a larger Bench. But we do
not propose to do so since the question has now become
academic in view of the amendment in the form of the
return carried out with effect from July 1, 1972. We
would, therefore, follow this decision in Muthiah
Chettiar’s case , which being a decision of a Bench of
three judges of this court, is binding upon us, and
following that decision, we hold that the assessee could
not be said to have concealed her income by not
disclosing in the return filed by her the amounts
representing the shares of her husband and minor
daughter in the two partnership firms.”
The next decision cited is in ITO v. Radheshyam Ladia.
There the Supreme Court affirmed the decision of the
Calcutta High Court in Radheshyam Ladia v. ITO [1987]
166 ITR 135 which was relied on by the Appellate
Assistant Commissioner, In Radheshyam Ladia [1987]
166 ITR 135 (SC), the assessment years involved were
196061, 1961-62 and 196263. The Supreme Court
followed the decisions in Smt. P.K. Kochammu Amma and
Muthiah Chettiar’s case in and Malegaon Electricity Co. P.
Ltd’s case . The Supreme Court extracted the aforesaid
passage from Smt P. K. Kochammu Amma and observed
(at page 141 of 166 ITR):
“We agree with what has been stated in Kochammu
Amma’s case , and for the reasons indicated therein, we
do not propose to refer the case to a larger Bench.
Following the law as laid down in the two cases in
Muthiah Chettiar’s case and Malegaon Electricity Co. P.
Lid’s case , we dismiss this appeal.”
19. The aforesaid two decisions of the Supreme Court
have been referred to and relied upon by the Calcutta
High Court in the case of Commissioner Of IncomeTax Vs.
Sarala Devi Birla reported in [1993] 203 ITR 953
(Calcutta).
20.In the said case before the Calcutta High Court, the
original assessment for the relevant assessment year
was completed under Section 143(3) of the Act. Later,
the reassessment was made on a higher income. The
assessee had given a cash gift to her minor daughter and
the said amount was invested in shares. The Income tax
Officer was of the view that the income arising from the
assets transferred to the minor child was to be treated as
the income of the individual under Section 64(4) of the
Act and, therefore, such income had escaped assessment
due to failure on the part of the assessee to disclose fully
and truly all material facts necessary for assessment.
Since such income was not disclosed in the original
return, the Income tax Officer initiated reassessment
proceedings under Section 147(a) and included the
capita gains arising on the transfer of shares and
dividend income from the shares in the total income
already determined. On appeal, the Assistant
Commissioner held that the Income tax Officer had no
jurisdiction to reopen the assessment under Section
147(a) of the Act. On revenue’s appeal, the tribunal
affirmed the order of the Appellant Assistant
Commissioner. The Revenue went in appeal before the
High Court. The High Court framed the following two
substantial questions of law for consideration:”
1. Whether, on the facts and in the circumstances of
the case, the Tribunal is right in law in holding that the
assessee was under no obligation to disclose in her
return of income, the income of her minor daughter?
2. Whether, on the facts and in the circumstances of
the case, and on a correct interpretation of Section 64(4)
of the Income tax Act, 1961, the Tribunal misdirected
itself in law in holding that the Income tax Officer was not
justified in reopening the assessment of the assessee
under Section 147(a) of the Income tax Act, 1961, in
respect of her omission or failure to disclose the income
of her minor daughter in her own assessment ?”
21.The first question came to be answered in the
affirmative and the second question in the negative and
both in favour of the assessee. The observations made
by the learned Judge of the Calcutta High Court are as
under:
10.Mr. Bajoria, learned counsel for the assessee,
contended that the principles laid down in the aforesaid
decisions of the Supreme Court will govern this case as
the assessment year involved in one of the decisions was
196263 and in the other 196465. This is, however, not
relevant. The question is whether, at the material time,
when the return was filed by the assessee, the form of
return contained a separate column to include the
income under Section 64. The Supreme Court in
Kochammu Amma [1980] 125 ITR 624 mentioned that
the amendment in the form of return was carried out
with effect from April 1, 1972, long after the original
return was filed in this case.
11.It appears that the Income tax (Second Amendment)
Rules, 1967, came into force with effect from April 1,
1967. Rule 12 of the Incometax Rules has been amended
by the said amendment which provides as follows (see
[1967] 64 ITR (St.) 13):
“12. Return of income.(1) The return of income required
to be furnished under Subsection (1) or Subsection (2) or
Subsection (3) of Section 139 shall,
(a) in the case of a company, be in Form No. 1 and be
verified in the manner indicated therein;
(b) in the case of a person not being a company, be in
Form No. 2 and be verified in the manner indicated
therein; Provided that in the case of a person, not being a
company or a cooperative society or a local authority,
whose total income (as computed by such person) does
not exceed fifteen thousand rupees, the return of income
may be furnished in Form No. 3 and shall be verified in
the manner indicated therein.
(2) Notwithstanding anything contained in Subrule (1),
(a) where a return of income relates to the assessment
year commencing on April 1, 1961, or any earlier
assessment year, it shall be furnished in the appropriate
form prescribed in Rule 19 of the Indian Income tax
Rules, 1922, and shall be verified in the manner
indicated therein;
(b) where a return of income relates to the assessment year
commencing on April 1, 1962, or April 1, 1963, or April 1,
1964, it shall be furnished in the appropriate form in
force immediately before April 1, 1967, and shall be
verified in the manner indicated therein.”
12. Thus, for the assessment year 196263, the old
return form which was considered by the Supreme Court
in those decisions remained in force.
13. The return form which has been prescribed by the
said Amendment of 1967 Rules, also contains a note
which is as follows : “3. If the income of any other person
is includible in your total income under the provisions of
Section 60, 61, 62, 63 or 64 of the Incometax Act, 1961,
such income should also be shown in this return under
the appropriate heads.”
14. But no separate column has been provided for
inclusion of the income under Section 60, 61, 62, 63 or
64 of the Incometax Act, 1961.
15. The rules were amended by the Incometax
(Amendment) Rules, 1971, which came into force on April
1, 1971. In the return form prescribed by the Rules, there
is no separate column indicated but only a note was
appended being Note No. 1 which is as follows : “If the
income of any other person is includible in your total
income under the provisions of Section 60, 61, 62, 63 or
64 of the Incometax Act, 1961, such incomes should also
be shown separately in this return under the appropriate
heads.”
16.Surprisingly, even after the judgment of the Supreme
Court in V.D.M.RM.M.RM. Muthiah Chettiar v. CIT [1969]
74 ITR 183, the Central Board of Direct Taxes, while
amending the Rules, did not provide any separate
column for inclusion of the income under Section 64 of
the Act. In V.D.M.RM.M.RM. Muthiah Chettiar v. CIT , a
similar note was considered by the Supreme Court and it
was held that, in the absence of any head under which
the income of the wife or minor child of a partner whose
wife or minor child was a partner in the same firm, could
be shown, by not showing that income, the taxpayer
cannot be deemed to have failed or omitted to disclose
fully and truly all material facts necessary for his
assessment ; it is only by the Incometax (Second
Amendment) Rules, 1972, which came into force on July
1, 1972, in the return form prescribed thereunder, a
column has been added being column 12(b) where
income arising to spouse/minor child or any other person
as referred to in Chapter V of the Act is required to be
shown. This amendment was noticed by the Supreme
Court in Kochammu Amma [1980] 125 ITR 624.
17.In our view, therefore, at the material time when the
original return was filed by the assessee some time in
1962, the form of return in force did not provide for any
separate column to disclose the income arising under
Section 64 of the Act. Even assuming that there was
escapement in the subsequent return filed in 1968, in
response to the notice under Section 148 read with
Section 147(b), the position would not be different
inasmuch as the 1967 Rules, which came into force with
effect from April 1, 1967, did not also provide for any
separate column for inclusion of such income under
Section 64 of the Act. On the contrary, the form with a
note continued to remain in force until a new form with a
separate column came into force with effect from July 1,
1972.
18.For the reasons aforesaid and in view of the principles
laid down by the Supreme Court as mentioned
hereinbelow, it must be held that there was no omission
or failure on the part of the assessee to disclose all her
income.
23.Applying the aforesaid principle of law to the facts of
the present case, we are of the view that the impugned
notice for reopening of the assessment is not sustainable
in law.”
42.. We are not convinced with the argument canvassed on
behalf of the Revenue that once an addition has been made
in the hands of one of the partners of the firm and affirmed by
the CIT (A), it should necessarily follow with respect to the
other partners also. We take notice of the fact that in the case
of one of the partners, namely, Shree Hasitkumar Bhatt, the
concerned Assessing Officer, after considering the reply filed
by him, dropped the reassessment proceedings. In the case of
one another partner, namely, Harshitkumar Devendrakumar
Bhatt, the inquiry in respect of the very same properties was
made by the concerned Assessing Officer vide notice dated
11th March, 2019. Pursuant thereto, the said assessee filed his
reply dated 19th March, 2019, pointing out that such properties
were purchased by the partnership firm (M/s. Shree Khodiyar
Developers) and the sale consideration was paid by the said
firm. Having regard to such reply, the Assessing Officer
thought fit not to initiate the reassessment proceedings in his
hands.
43. In our opinion, there is no escapement of income
chargeable to tax. The conditions precedent for resorting to
reassessment under Section 147 of the Act are not satisfied in
the present case. Just because the partnership firm failed to
file its return of income for the relevant year, by itself, will not
confer jurisdiction upon the authority concerned to issue
notice against the individual partners of the firm with respect
to their individual return of income for the relevant year in
consideration.
44. The aforesaid takes us to consider the arguments of the
learned senior standing counsel appearing for the Revenue as
regards Section 150 of the Act. Section 150 reads thus;
“150. Provision for cases where assessment is in
pursuance of an order on appeal, etc.
(1) Notwithstanding
anything contained in section 149,
the notice under section 148 may be issued at any time
for the purpose of making an assessment or
reassessment or re-computation in consequence of or to
give effect to any finding or direction contained in an
order passed by any authority in any proceeding under
this Act by way of appeal, reference or revision 1 or by a
court in any proceeding under any other law].
(2) The provisions of sub- section (1) shall not apply in
any case where any such assessment, reassessment or
recomputation as is referred to in that sub- section
relates to an assessment year in respect of which an
assessment, reassessment or recomputation could not
have been made at the time the order which was the
subject- matter of the appeal, reference or revision, as
the case may be, was made by reason of any other
provision limiting the time within which any action for
assessment, reassessment or recomputation may be
taken.”
45. Section 149 of the Act prescribes the maximum period of
four or six years depending upon the quantum of tax as
mentioned in the said section for initiating the reassessment
proceedings. Section 150 (1) of the Act, referred to above,
states that the period of limitation prescribed in Section 149 is
not applicable if the reassessment is proposed on the basis of
any order passed by “any authority in any proceedings under
the Act by way of appeal, reference or revision” or “by a Court
in any proceeding under any other law”. Sub-section (2) of
Section 150, however, makes it clear that the reassessment
permissible under sub-section (1) of section 150 would not be
applicable to the Department where the period of limitation for
such assessment or reassessment has expired at the time it
proposes to be reopened.
46. The plain reading of Section 150 reveals that it deals with
a situation where an assessment or re-assessment for a
particular year or for a particular person is necessitated by an
order passed by an appellate or revisional authority or on a
reference. In such cases, it may not be possible for the
Revenue to adhere to the time limits prescribed under Section
149, as the order of appeal, reference or revision or by a Court,
proceeding under any other law may be passed beyond the
period contemplated under section 149. It is for this reason,
the legislature has not placed any time limit for making the
assessment or re-assessment in such circumstances and for
this reason, Section 150 begins with a non-obstante clause. At
the same time, it does not mean that the power under Section
150(1) is uncanalised or unrestricted. The safeguard has been
built under Sub-section (2) of Section 150. The entire object of
Section 150 (2) is to bar the proceedings under Sub-Section (1)
in the matter of assessment/re-assessment or re-computation,
which has become the subject matter of the reference or
revision by reason of any other provisions limiting the time
limit. Section 150 (1) provides that the power to issue notice
under Section 148 in consequence of or giving effect to any
finding or direction of the Appellate/Revisional Authority or the
Court, is subject to the provision contained in Section 150(2),
which provides that directions under Section 150(1) cannot be
given by the Appellate/Revisional Authority or the Court if on
the date on which the order impugned in the appeal/revision
was passed, the re-assessment W.P.(C) 11452/2017 Page 31 of
34 proceedings had become time barred. In other words, as
per section 150(2), the Appellate Authority could give
directions for the re-assessment only in respect of an
assessment year, which was within the limitation stipulated
under Section 148 in respect of which re-assessment
proceedings could be initiated on the date of passing of order
under appeal.
47. At this stage, we may refer to a decision of the Supreme
Court in the case of Commissioner of Income-Tax, Shimla
vs. The Green World Corporation, Parwanoo, (2009) 7
SCC 69. In para-45 of the judgment, the Court, after quoting
Section 150 of the Act, has observed as under:
“The aforementioned provision although appears to be of
a very wide amplitude, but would not mean that recourse
to reopening of the proceedings in terms of Sections 147
and 148 of the Act can be initiated at any point of time
whatsoever. Such a proceeding can be initiated only
within the period of limitation prescribed therefor as
contained in Section 149 of the Act.
Section 150 (1) of the Act is an exception to the
aforementioned provision. It brings within its ambit only
such cases where reopening of the proceedings may be
necessary to comply with an order of the higher
authority. For the said purpose, the records of the
proceedings must be before the appropriate authority. It
must examine the records of the proceedings. If there is
no proceeding before it or if the Assessment year in
question is also not a matter which would fall for
consideration before the higher authority, Section 150 of
the Act will have no application. “
48. In our opinion, the argument canvassed on behalf of the
Revenue that this Court may permit the Department to invoke
Section 150 of the Act for the purpose of proceeding against
the partnership firm for the relevant year is not at all palatable
or rather sustainable in law.
49. In the overall view of the matter, we have reached to the
conclusion that the decision to reopen the assessment is not
just and proper.
50. In the result, this writ application succeeds and is hereby
allowed.
(J. B. PARDIWALA, J)
(ILESH J. VORA,J)
