Rajbhushan Omprakash Dixit vs. DCIT (Bombay High Court)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3546 OF 2018
Rajbhushan Omprakash Dixit. ] … Petitioner
Versus
Deputy Commissioner of Income Tax ]
Central Circle 2(
4), Mumbai. ] … Respondent
Mr. C. S. Agarwal, Senior Advocate a/w Mr. Sankalp Sharma & Mr.
Ravikumar Mall i/b Mr. Prem Jha for Petitioner.
Mr. Suresh Kumar a/w Ms. Samiksha Kanani for Respondent.
CORAM :AKIL
KURESHI &
SARANG V. KOTWAL, JJ.
DATE :05
APRIL, 2019
P. C. :1.
Heard learned Counsel for parties for final disposal of the
petition.
2. The Petitioner, an individual, has challenged a notice
dated 02/05/2017 issued by the Respondent Deputy
Commissioner
of Income Tax.

3. Brief facts are as under :
The Petitioner, at the relevant time, was working as an
independent Director of one M/s. Toporder Properties Pvt. Ltd. which
was one of the Sterling Biotech Ltd. group companies. The said group
of entities, including the Petitioner, was subjected to search and
seizure action under Section 132(1) of the Income Tax Act, 1961 (‘the
Act’, for short) and survey operations under Section 133A of the Act
on 28/06/2011. Subsequent to the search, the Assessee filed the
return of income for the Assessment Year 20112012
declaring total
income of Rs.7.20 Lakhs (rounded of). The Assessing Officer
completed the assessment under Section 153A read with 143(3) of the
Act on 20/03/2014 accepting the Petitioner’s returned income.
4. To reopen such assessment, he issued the impugned
notice. In order to do so, he had recorded the following reasons :
“Return of Income for the year under consideration was filed
23.02.2012 declaring total income of Rs.7,20,916/.
Subsequently, assessment u/s 153A r.w.s. 143(3) was finalized
by the then DCIT, CC. 10, Mumbai on 20.03.2014
determining total income of Rs.7.20,980/.
Search & Seizure action u/s. 132(1) of the I.T. Act was
conducted in the Sterling Group of cases on 28.06.2011 by the
DDIT (Inv.) Unit VII (4), Mumbai. In the Search and Seizure
action u/s. 132(1) several parties were involved at various
places. Party No.17 conducted search at the premises of M/s.
Sterling Biotech Ltd. at Sandesara Estate, Vadodara. During
the course of search proceedings, the search party seized
various documents being AnnexureA7,
on perusal of
AnnexureA7,
it is observed thati.
AnnexureA7
consists of 152 pages.
(A) In the page no.8 dated 10.1.2011, the following
entry is made interalia Rs.
20,00,000/cash
received fro Mr. R. B. Dixit at
Delhi, the same is given to cash S.K.G. (through Gagan
Dhawan).
The above entry in the seized document clearly reveals
that the assessee had minimum cash in hand on 10.01.2011 of
Rs.20,00,000.
The cash possessed by the assessee is not
forming part of assessee’s return of income for the year under
consideration. This tantamount escapement of income within
the meaning of Section 147 of the Income Tax Act.
Survey u/s. 133A was conducted in the case of M/s.
PMT Machines Ltd., 20/B, Khatau Bldg., A. D. Marg, Fort,
Mumbai by DDIT, (Inv) UnitI,
on 28.6.2011. The survey was
conducted simultaneously when the Search & Seizure action
was taken in the case of M/s. Sterling Group of cases on
28.06.2011 by the DDIT (Inv.) Unit VII(4), Mumbai. During
the course of survey action 133A the survey team impounded
certain documents which includes Annexures A4
and A5
inter
alia. On perusal of these Annexures it is observed that these
impounded documents include vouchers. These vouchers show
the payments have been made to Shri R. B. Dixit on various
dates as detailed below :URS
Annexure Page No. Date Amount (Rs.)
A4
104 11.10.2010 18,00,000
A4
65 8.06.2010 3,25,000
A4
53 27.04.2010 5,35,000
A4
45 15.11.2010 15,00,000
A5
157 27.01.2011 16,00,000
A5
139 8.9.2010 2,85,000
A5
134 17.9.2010 11,50,000
A5
49 12.01.2011 20,00,000
A5
11 19.10.2010 20,00,000
Total 85,35,000
The aforementioned amounts of Rs.85,35,000/received
by Shri R. B. Dixit for the reasons specified in the
vouchers. These amounts received by the assessee is an income
in his hands which is not offered for tax in the return of
income and thereby not forming part of assessment order.
In the backdrop of above, the undersigned has reason
to believe that the income has escaped within the meaning of
section 147 of the I.T. Act, Accordingly notice u/s. 148 is being
issued after obtaining necessary sanction required by
provisions of Section 151 of the Pr. CIT, Central1,
Mumbai.”
5. Upon being supplied the reasons, the Assessee raised
objections to the notice of reopening of assessment under a letter
dated 14th July, 2017. In such objections, he had, inter alia,
contended as under :

“The reference of the documents which is given in the reason
for reopening of the case, were already available with the
asessing officer at the time of assessment and after considering
these documents/materials assessment concluded u/s. 143(3)
w.r.t. 153A and hence it is stated that there is only difference
of opinion and change of view. In the absence of the
additional evidence other than seized material we hereby state
that provisions of reassessment under section 147/148 is not
warranted and is bad in law as it amounts to change in view.”
6. The Assessing Officer rejected such objections by an order
dated 19.09.2018. In such order, in relation to the Petitioner’s
contention of the documents relied upon in the reasons already
available with the Assessing Officer during the original assessment, he
stated as under :
“5. During the course of the assessment proceedings for the
A.Y. 21112,
the assessee was not countered by the Assessing
Officer with the entires found in Annexure A7
seized during
the search action at the premises of Sterling Biotech Ltd. at
Sandesara Estate, Vadodra. The assessee was also not
countered with the vouchers included in Annexure A4
and A5
which were impounded during the course of survey action u/s
133A on M/s. PMT Machines Limited on 28.06.2011. The
Assessing Officer failed to form an opinion on the contents of
these entries which show cash possessed by the assessee to the
tune of Rs.20,00,000/and
the content of voucher which
shows payment made to the assessee amount to Rs.85,35,000.
As the Assessing Officer did not form an opinion on this
issue, there is no question of any difference or change of
view/opinion.”

7. The Petitioner thereafter filed this petition to challenge
the notice of reopening of assessment. Learned Counsel for the
Petitioner submitted that there was no failure on the part of the
assessee to disclose truly and fully all material facts. The documents
relied upon by the Assessing Officer in the reasons for reopening the
assessment, were available with the Assessing Officer during the
original scrutiny assessment.
8. On the other hand, Mr. Suresh Kumar, learned Counsel for
the Department, opposed the petition contending that the Assessing
Officer has recorded proper reasons. There was lack true and full
disclosure on the part of the Assessee, particularly in view of the
Explanation 1 to Section 147 of the Act.
9. Having thus heard the learned Counsel for parties, we may
refer to the reasons recorded by the Assessing Officer. In such
reasons, he has referred to two facts. Firstly, as per the seized
documents (AnnexureA7)
during the search, an amount of
Rs.20,00,000/was
stated to have been paid in cash by the Assessee
to one S.K.G. According to the Assessing Officer, the Assessee had
cash on hand of Rs.20,00,000/which
was undisclosed. The second
fact which the Assessing Officer relied upon was the seizure of
vouchers during the search showing a total payment of Rs.85,35,000/to
the Assessee. Here again, the Assessing Officer believed that the
Assessee had thus received cash amount of Rs.85,35,000/.
10. Undisputed fact is that all these documents were before
the Assessing Officer when the original scrutiny under assessment
under Section 153A read with 143(3) was made. It was in this
background that the Assessee had, in his objections, asserted that the
documents relied upon in the reasons were very much available with
the Assessing Officer earlier. It was in the context of these objections
that the Assessing Officer, while disposing of the objections, as noted
above, had remarked that he had not formed any opinion on such
documents in the assessment order.
12. The stand taken by the Assessing Officer may save him
from the allegation of change of opinion, however, in the present case
when we are examining the validity of the notice of reopening issued
beyond the period of four years from the end of relevant assessment
year, the question of lack of true and full disclosure by the Assessee
would become relevant. In this context, once the Department i.e. the
Assessing Officer had certain information, material, or document
before him during the assessment proceeding, irrespective of the
source of such information, material, or document, the Assessee
cannot be blamed for nondisclosure
thereof.
13. Mr. Suresh Kumar, however, sought to rely on the
Explanation 1 to Section 147 to contend that this would be a case of
lack of true and full disclosure on the part of the Assessee. This
Explanation reads as under :
“Explanation 1.Production
before the Assessing Officer of
account books or other evidence from which material
evidence could with due diligence have been discovered by
the Assessing Officer will not necessarily amount to
disclosure within the meaning of the foregoing proviso.”
As per this Explanation thus, production before the Assessing Officer
of account books or other evidence from which material evidence
could with due diligence have been discovered by the Assessing
Officer will not necessarily amount to disclosure within the meaning
of the first proviso to Section 147. Here is not a case where the
Assessee is seeking to rely on a disclosure which the Revenue can seek
to bring within the fold of the said Explanation. Here is a case where
the Department already had collected certain documents and
materials which were before the Assessing Officer at the time of
framing assessment. If the Assessing Officer did not, for some reason,
advert to such material or did not utilize the same, he surely cannot
allege that the Assessee failed to disclose truly and fully all material
facts.
14. In view of the above discussion, the impugned notice is set
aside. The petition is allowed and disposed of.
(SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)
URS 9 of 9
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