IN THE HIGH COURT OF JUDICATURE AT BOMBAY
\nORDINARY ORIGINAL CIVIL JURISDICTION
\nWRIT PETITION NO.3546 OF 2018
\nRajbhushan Omprakash Dixit. ] \u2026 Petitioner
\nVersus
\nDeputy Commissioner of Income Tax ]
\nCentral Circle 2(
\n4), Mumbai. ] \u2026 Respondent
\nMr. C. S. Agarwal, Senior Advocate a\/w Mr. Sankalp Sharma & Mr.
\nRavikumar Mall i\/b Mr. Prem Jha for Petitioner.
\nMr. Suresh Kumar a\/w Ms. Samiksha Kanani for Respondent.
\nCORAM :AKIL
\nKURESHI &
\nSARANG V. KOTWAL, JJ.
\nDATE :05
\nAPRIL, 2019
\nP. C. :1.
\nHeard learned Counsel for parties for final disposal of the
\npetition.
\n2. The Petitioner, an individual, has challenged a notice
\ndated 02\/05\/2017 issued by the Respondent Deputy
\nCommissioner
\nof Income Tax.<\/p>\n
3. Brief facts are as under :
\nThe Petitioner, at the relevant time, was working as an
\nindependent Director of one M\/s. Toporder Properties Pvt. Ltd. which
\nwas one of the Sterling Biotech Ltd. group companies. The said group
\nof entities, including the Petitioner, was subjected to search and
\nseizure action under Section 132(1) of the Income Tax Act, 1961 (‘the
\nAct’, for short) and survey operations under Section 133A of the Act
\non 28\/06\/2011. Subsequent to the search, the Assessee filed the
\nreturn of income for the Assessment Year 20112012
\ndeclaring total
\nincome of Rs.7.20 Lakhs (rounded of). The Assessing Officer
\ncompleted the assessment under Section 153A read with 143(3) of the
\nAct on 20\/03\/2014 accepting the Petitioner’s returned income.
\n4. To reopen such assessment, he issued the impugned
\nnotice. In order to do so, he had recorded the following reasons :
\n\u201cReturn of Income for the year under consideration was filed
\n23.02.2012 declaring total income of Rs.7,20,916\/.
\nSubsequently, assessment u\/s 153A r.w.s. 143(3) was finalized
\nby the then DCIT, CC. 10, Mumbai on 20.03.2014
\ndetermining total income of Rs.7.20,980\/.
\nSearch & Seizure action u\/s. 132(1) of the I.T. Act was
\nconducted in the Sterling Group of cases on 28.06.2011 by the
\nDDIT (Inv.) Unit VII (4), Mumbai. In the Search and Seizure
\naction u\/s. 132(1) several parties were involved at various
\nplaces. Party No.17 conducted search at the premises of M\/s.
\nSterling Biotech Ltd. at Sandesara Estate, Vadodara. During
\nthe course of search proceedings, the search party seized
\nvarious documents being AnnexureA7,
\non perusal of
\nAnnexureA7,
\nit is observed thati.
\nAnnexureA7
\nconsists of 152 pages.
\n(A) In the page no.8 dated 10.1.2011, the following
\nentry is made interalia Rs.
\n20,00,000\/cash
\nreceived fro Mr. R. B. Dixit at
\nDelhi, the same is given to cash S.K.G. (through Gagan
\nDhawan).
\nThe above entry in the seized document clearly reveals
\nthat the assessee had minimum cash in hand on 10.01.2011 of
\nRs.20,00,000.
\nThe cash possessed by the assessee is not
\nforming part of assessee’s return of income for the year under
\nconsideration. This tantamount escapement of income within
\nthe meaning of Section 147 of the Income Tax Act.
\nSurvey u\/s. 133A was conducted in the case of M\/s.
\nPMT Machines Ltd., 20\/B, Khatau Bldg., A. D. Marg, Fort,
\nMumbai by DDIT, (Inv) UnitI,
\non 28.6.2011. The survey was
\nconducted simultaneously when the Search & Seizure action
\nwas taken in the case of M\/s. Sterling Group of cases on
\n28.06.2011 by the DDIT (Inv.) Unit VII(4), Mumbai. During
\nthe course of survey action 133A the survey team impounded
\ncertain documents which includes Annexures A4
\nand A5
\ninter
\nalia. On perusal of these Annexures it is observed that these
\nimpounded documents include vouchers. These vouchers show
\nthe payments have been made to Shri R. B. Dixit on various
\ndates as detailed below :URS
\nAnnexure Page No. Date Amount (Rs.)
\nA4
\n104 11.10.2010 18,00,000
\nA4
\n65 8.06.2010 3,25,000
\nA4
\n53 27.04.2010 5,35,000
\nA4
\n45 15.11.2010 15,00,000
\nA5
\n157 27.01.2011 16,00,000
\nA5
\n139 8.9.2010 2,85,000
\nA5
\n134 17.9.2010 11,50,000
\nA5
\n49 12.01.2011 20,00,000
\nA5
\n11 19.10.2010 20,00,000
\nTotal 85,35,000
\nThe aforementioned amounts of Rs.85,35,000\/received
\nby Shri R. B. Dixit for the reasons specified in the
\nvouchers. These amounts received by the assessee is an income
\nin his hands which is not offered for tax in the return of
\nincome and thereby not forming part of assessment order.
\nIn the backdrop of above, the undersigned has reason
\nto believe that the income has escaped within the meaning of
\nsection 147 of the I.T. Act, Accordingly notice u\/s. 148 is being
\nissued after obtaining necessary sanction required by
\nprovisions of Section 151 of the Pr. CIT, Central1,
\nMumbai.\u201d
\n5. Upon being supplied the reasons, the Assessee raised
\nobjections to the notice of reopening of assessment under a letter
\ndated 14th July, 2017. In such objections, he had, inter alia,
\ncontended as under :<\/p>\n
\u201cThe reference of the documents which is given in the reason
\nfor reopening of the case, were already available with the
\nasessing officer at the time of assessment and after considering
\nthese documents\/materials assessment concluded u\/s. 143(3)
\nw.r.t. 153A and hence it is stated that there is only difference
\nof opinion and change of view. In the absence of the
\nadditional evidence other than seized material we hereby state
\nthat provisions of reassessment under section 147\/148 is not
\nwarranted and is bad in law as it amounts to change in view.\u201d
\n6. The Assessing Officer rejected such objections by an order
\ndated 19.09.2018. In such order, in relation to the Petitioner’s
\ncontention of the documents relied upon in the reasons already
\navailable with the Assessing Officer during the original assessment, he
\nstated as under :
\n\u201c5. During the course of the assessment proceedings for the
\nA.Y. 21112,
\nthe assessee was not countered by the Assessing
\nOfficer with the entires found in Annexure A7
\nseized during
\nthe search action at the premises of Sterling Biotech Ltd. at
\nSandesara Estate, Vadodra. The assessee was also not
\ncountered with the vouchers included in Annexure A4
\nand A5
\nwhich were impounded during the course of survey action u\/s
\n133A on M\/s. PMT Machines Limited on 28.06.2011. The
\nAssessing Officer failed to form an opinion on the contents of
\nthese entries which show cash possessed by the assessee to the
\ntune of Rs.20,00,000\/and
\nthe content of voucher which
\nshows payment made to the assessee amount to Rs.85,35,000.
\nAs the Assessing Officer did not form an opinion on this
\nissue, there is no question of any difference or change of
\nview\/opinion.\u201d<\/p>\n
7. The Petitioner thereafter filed this petition to challenge
\nthe notice of reopening of assessment. Learned Counsel for the
\nPetitioner submitted that there was no failure on the part of the
\nassessee to disclose truly and fully all material facts. The documents
\nrelied upon by the Assessing Officer in the reasons for reopening the
\nassessment, were available with the Assessing Officer during the
\noriginal scrutiny assessment.
\n8. On the other hand, Mr. Suresh Kumar, learned Counsel for
\nthe Department, opposed the petition contending that the Assessing
\nOfficer has recorded proper reasons. There was lack true and full
\ndisclosure on the part of the Assessee, particularly in view of the
\nExplanation 1 to Section 147 of the Act.
\n9. Having thus heard the learned Counsel for parties, we may
\nrefer to the reasons recorded by the Assessing Officer. In such
\nreasons, he has referred to two facts. Firstly, as per the seized
\ndocuments (AnnexureA7)
\nduring the search, an amount of
\nRs.20,00,000\/was
\nstated to have been paid in cash by the Assessee
\nto one S.K.G. According to the Assessing Officer, the Assessee had
\ncash on hand of Rs.20,00,000\/which
\nwas undisclosed. The second
\nfact which the Assessing Officer relied upon was the seizure of
\nvouchers during the search showing a total payment of Rs.85,35,000\/to
\nthe Assessee. Here again, the Assessing Officer believed that the
\nAssessee had thus received cash amount of Rs.85,35,000\/.
\n10. Undisputed fact is that all these documents were before
\nthe Assessing Officer when the original scrutiny under assessment
\nunder Section 153A read with 143(3) was made. It was in this
\nbackground that the Assessee had, in his objections, asserted that the
\ndocuments relied upon in the reasons were very much available with
\nthe Assessing Officer earlier. It was in the context of these objections
\nthat the Assessing Officer, while disposing of the objections, as noted
\nabove, had remarked that he had not formed any opinion on such
\ndocuments in the assessment order.
\n12. The stand taken by the Assessing Officer may save him
\nfrom the allegation of change of opinion, however, in the present case
\nwhen we are examining the validity of the notice of reopening issued
\nbeyond the period of four years from the end of relevant assessment
\nyear, the question of lack of true and full disclosure by the Assessee
\nwould become relevant. In this context, once the Department i.e. the
\nAssessing Officer had certain information, material, or document
\nbefore him during the assessment proceeding, irrespective of the
\nsource of such information, material, or document, the Assessee
\ncannot be blamed for nondisclosure
\nthereof.
\n13. Mr. Suresh Kumar, however, sought to rely on the
\nExplanation 1 to Section 147 to contend that this would be a case of
\nlack of true and full disclosure on the part of the Assessee. This
\nExplanation reads as under :
\n\u201cExplanation 1.Production
\nbefore the Assessing Officer of
\naccount books or other evidence from which material
\nevidence could with due diligence have been discovered by
\nthe Assessing Officer will not necessarily amount to
\ndisclosure within the meaning of the foregoing proviso.\u201d
\nAs per this Explanation thus, production before the Assessing Officer
\nof account books or other evidence from which material evidence
\ncould with due diligence have been discovered by the Assessing
\nOfficer will not necessarily amount to disclosure within the meaning
\nof the first proviso to Section 147. Here is not a case where the
\nAssessee is seeking to rely on a disclosure which the Revenue can seek
\nto bring within the fold of the said Explanation. Here is a case where
\nthe Department already had collected certain documents and
\nmaterials which were before the Assessing Officer at the time of
\nframing assessment. If the Assessing Officer did not, for some reason,
\nadvert to such material or did not utilize the same, he surely cannot
\nallege that the Assessee failed to disclose truly and fully all material
\nfacts.
\n14. In view of the above discussion, the impugned notice is set
\naside. The petition is allowed and disposed of.
\n(SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)
\nURS 9 of 9
\n::: Uploaded on – 09\/04\/2019 ::: Downloaded on – 20\/04\/2019 09:55:24 :::<\/p>\n","protected":false},"excerpt":{"rendered":"
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.<\/p>\n