CHANDRAKANT RAGHUNATH PATIL V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(3), SURAT

SCA/20269/2018

AI Insights

This case involves a writ application filed by Chandrakant Raghunath Patil under Article 226 of the Constitution of India, challenging the notice for reopening of his income tax assessment for the Assessment Year 2013-14 under Section 147 of the Income Tax Act, 1961. The reopening was based on an alleged investment in property from undisclosed sources, as per the Assessing Officer's view. However, the audit objection, which was the basis for reopening the assessment, was later dropped, leading to the discontinuation of the proceedings. The court's decision to dispose of the writ application was influenced by the withdrawal of the audit objection and the subsequent decision not to pursue the reopening of the assessment.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 750547 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 27-01-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KALPANA RAVAL
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment proceedings; Impugned notice; Reopening of assessment; Undisclosed sources; Wealth tax return
• Section: 147; 68

Judgement Text

"C/SCA/20269/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 20269 of 2018 ================================================================ CHANDRAKANT RAGHUNATH PATIL Versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(3), SURAT ================================================================ Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 27/01/2020 ORAL ORDER (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 st aside the impugned notice at Annexure-A to this petition. (B) Pending the admission, hearing and final disposal of this petition, no stay implementation and operation of the notice at Annexure-A to this petition and stay further proceedings for assessment for A.Y.2013-14. (C ) Any other and further relief deemed just and proper be granted in the interest of justice.” 2. This is a case of reopening of the assessment under Section 147 of the Income Tax Act, 1961. 3. On 21st December, 2018, a Coordinate Bench of this Court passed the following order; Page 1 of 4 C/SCA/20269/2018 ORDER “1. The learned advocate for the petitioner has tendered a draft amendment. The amendment is allowed in terms of the draft. The same shall be carried out forthwith. 2. Mr. B. S. Soparkar, learned advocate for the petitioner invited the attention of the court to the reasons for reopening the assessment, to submit that the assessment is sought to be reopened on the basis of facts disclosed by the petitioner in wealth tax return. According to the Assessing Officer, the petitioner has made investment in property situated at Dashera Tekri at Navsari from undisclosed sources under section 68 of the Income Tax Act, 1961 to the tune of Rs.10,67,39,488/-. It was submitted that according to the Assessing Officer, the property disclosed in the wealth tax return has not been booked in the personal books. The attention of the court was invited to the balance sheet submitted at the time of assessment, to point out that the property in question is clearly shown in the balance sheet of “C.R. Patil Sankul”. It was further pointed out that the petitioner has drawn the attention of the Assessing Officer to all these facts in the objections raised against the reopening to the effect that the property being stock- in-trade is reflected in the books of accounts of the petitioner's proprietary concern “C.R. Patil Sankul” in respect of which the petitioner is maintaining separate books of accounts. It was pointed out that in this case the impugned notice is issued on 31.3.2018; vide letter dated 9.4.2018 the petitioner had called upon the respondent Assessing Officer to furnish a copy of the reasons recorded for reopening the assessment, however, such reasons came to be furnished only on 14.9.2018, and hence, there was some delay in raising the objections. It was submitted that the Assessing Officer is, therefore, not disposing of the objections on the ground of delay and is proceeding further with the assessment. 3. Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 11th February, 2019. By way of ad-interim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not pass the final order without the permission of this court. Direct service is permitted.” 4. Today, when the matter is taken up for hearing, Ms. Page 2 of 4 C/SCA/20269/2018 ORDER Kalpana Raval, the learned standing counsel appearing for the Department, places on record a communication in writing received by her from the office of the Assistant Commissioner of Income Tax, Circle-I (3), Surat. The communication reads thus; “To, Smt. Kalpana K. Raval,(Advocate) Sr. Standing Counsel for the Income Tax Department, 'Atmasanthulan' B/h Royal Cresent Bungalows, Jalsa Party Plot Lane, Thaltej, Ahmedabad-380 059. Madam, Sub: SCA 20269 of 2018 converted from SCA/38104/2018 dated 20.12.2018 in the case of Chandrakant Raghunath Patil for A.Y. 2013-14-Reg. Ref: This office's letter dated 14.03.2019, No.SRT/ACIT- 1(3) High Court Matter/CRP/2018-19 Ref; Letter No.SRT/ACIT-1(3) High Court Matter/CRP/2018-19 Dated 01.03.2019 sent via e-mail. Kindly refer to the above, 2. In this connection, it is submitted that the case of Shri Chandrakant Raghunath Patil was reopened for the A.Y.2013-14 on the basis of revenue audit objection. Though the objection was not acceptable to the department, reopening was done as per the guidelines dealing with audit objections. However, the audit itself has dropped the objection. Hence, the proceedings under sec. 147 reopening the assessment have been dropped. Thus, the Honourable Court may kindly be intimated that subject notice has been withdrawn. The petition may be decided upon accordingly.” 5. The communication is ordered to be taken on record. 6. Thus, it appears that the audit itself has dropped objection. In such circumstances, the proceedings under Page 3 of 4 C/SCA/20269/2018 ORDER Section 147 have also been dropped. In such a situation, we need not adjudicate this writ application any further on merits. However, at this stage, Mr. Soparkar, the learned counsel appearing for the assessee pointed out that his client, as on date, has not received any intimation in this regard in writing. Since a statement is made by the learned counsel appearing for the Revenue and the communication in writing is also taken on record, the Revenue may do well to inform the writ applicant in writing about its decision to drop the reopening . 7. With the above, this writ application stands disposed of. Notice is discharged. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) Vahid Page 4 of 4 "