AJAY SURENDRABHAI PATEL V. INCOME TAX OFFICER WARD 2(1)(1)

SCA/18430/2021

AI Insights

The case involves Ajay Surendrabhai Patel challenging an order passed by the Income Tax Officer under Section 147 of the Income Tax Act, 1961, concerning the Assessment Year 2017-2018. The petitioner contested the validity of the notice and subsequent orders related to the reopening of his income tax assessment, alleging non-compliance with procedural requirements under Sections 148(2) and 151 of the Income Tax Act. The core issue revolved around the alleged undisclosed income from a property transaction where the petitioner was accused of paying 'On-Money' amounting to Rs.56,52,000. The High Court of Gujarat, after reviewing the case records, did not press the petition further and allowed the petitioner to seek other legal remedies.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 768953 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 14-12-2021
• Assessment Year: misc
• Other Referred Cases: GKN Driveshafts (India) Ltd. vs. D.C.I.T.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M B BHATT
• Assessee Lawyers: KETAN SHAH; AMAN SHAH
• Keywords: Assessment Year 2017-2018; Income Tax; On-money; Reopening of assessment; Undisclosed sources
• Section: 147; 148; 143(2); 151; 226

Judgement Text

"C/SCA/18430/2021 ORDER DATED: 14/12/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 18430 of 2021 ========================================================== AJAY SURENDRABHAI PATEL Versus INCOME TAX OFFICER WARD 2(1)(1) ========================================================== Appearance: MR KETAN H SHAH(2705) for the Petitioner(s) No. 1 MR. AMAN K SHAH(9992) for the Petitioner(s) No. 1 LD.SR.ADV.MR.M.B.BHATT for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 14/12/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1 . T h i s C o u r t o n 0 7 . 1 2 . 2 0 2 1 b y p a s s i n g t h e f o l l o w i n g o r d e r h a d c a l l e d f o r t h e o r i g i n a l c a s e r e c o r d b y r e q u e s t i n g l e a r n e d s e n i o r a d v o c a t e , M r . M a n i s h B h a t t . “1. The petitioner is before this Court under Article 226 of the Constitution of India challenging the order passed by the respondent under Section 147 of the Income Tax Act, 1961 dated 31.03.2021 for the Assessment Year 2017-2018 with the following prayers: “7… (a) declare that the notice u/s 148 dated 31.03.2021, Annexure-’A’ and the reasons recorded dated Page 1 of 4 C/SCA/18430/2021 ORDER DATED: 14/12/2021 20.04.2021 Annexure-’C’ and the objection order dated 23.11.2021 Annexure-’I’ as invalid and bad in law on facts and also on law. (b) That without prejudice the proceedings is null and void since there is no such compliance made to the provision of Section 148 (2) and also Section 151. (c) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the notice under Section 148 dated 31.03.2021 Annexure- ‘A’, reasons recorded dated 20.04.2021 Annexure - ‘C’, notice under Section 142(1) dated 17.11.2021 Annexure-’F’ and the objection order dated 23.11.2021 Annexure-’I’. (d) any other and further relief deemed just and proper be granted in the interest of justice; (e) to provide for the cost of this petition.” 2. It appears that the notice under Section 143(2) read with Section 147 of the Income Tax Act, 1961 dated 20.04.2021 provides the reasons recorded for reopening, which are as follow: “As per the information received from the credible sources and preliminary investigation clearly reveal that Page 2 of 4 C/SCA/18430/2021 ORDER DATED: 14/12/2021 the assessee has purchased a Unit/Villa in KBG Project of NODPL and assessee has made payment of Rs.56,52,000/-as On-Money. Since the Income as declared in ITR does not commensurate with the value of transaction, it is clear that the investment has been made from undisclosed sources. Failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment, the income of the assessee has escaped assessment to the tune of Rs.56,52,000/- for the AY 2017-2018 within the meaning of Section 147 of the Income-tax Act, 1961.” This has been replied to by the petitioner raising the objections against these reasons on 29.04.2021 along the line of the decision of the Apex Court rendered in case of GKN Driveshafts (India) Ltd. vs. D.C.I.T., reported in (2003) 259 ITR 19 (SC). 3. It is urged that the Assessing Officer is required to provide the reasons recorded and disposed of objection in writing, if any raised by the Assessee petitioner. He has also requested for the documents and evidence is to link with the petitioner himself while rejecting the objections on 23.11.2021. 3. Before we proceed further, we would like to examine the original case records. We have requested the office of the learned senior advocate, Mr.M.R.Bhatt to call for the papers and assist the cause. Page 3 of 4 C/SCA/18430/2021 ORDER DATED: 14/12/2021 4. Let the matter appear on 10.12.2021.” T h e p a p e r s h a v e b e e n b r o u g h t b e f o r e t h i s C o u r t p u r s u a n t t o t h e s a i d o r d e r a n d w e h a v e h a d a n o c c a s i o n t o p e r u s e t h e s a m e . 2 . A t t h i s s t a g e , l e a r n e d a d v o c a t e , M r . K e t a n S h a h d o e s n o t p r e s s f o r t h i s p e t i t i o n . 3 . P r e s e n t p e t i t i o n s t a n d s d i s p o s e d o f a s n o t p r e s s e d . T h e C o u r t h a s n o t c h o s e n t o e n t e r i n t o t h e m e r i t s o f t h e c a s e . T h e p e t i t i o n e r s h a l l b e a t l i b e r t y t o t a k e l e g a l r e c o u r s e a v a i l a b l e f o r h i m u n d e r t h e l a w . (SONIA GOKANI, J) (NISHA M. THAKORE,J) M.M.MIRZA Page 4 of 4 "