EXOTICA PROMOTERS LLP AND ANR. V. THE INCOME TAX OFFICER WARD 1 (2) GUWAHATI AND 5 ORS.

WP(C)/6600/2021

AI Insights

The case involves Exotica Promoters LLP and Surendra Kumar Agarwal as petitioners, who challenged the procedure adopted by the Income Tax Department in reopening their case under Section 147 of the Income Tax Act, 1961. The petitioners argued that the notice issued under Section 148 was based on incorrect assumptions about a loan transaction with M/s Vishal Metal & Mining Corporation. The Income Tax Department contended that the proceedings were not yet final, and thus the writ petition was premature. The court dismissed the petition, emphasizing that the petitioner could appeal after the final decision is made by the Income Tax Department.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 747571 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 15-12-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ASSTT
• Assessee Lawyers: R GOENKA
• Keywords: Escaped assessment; Loan; Re-opening of case; Illegal procedure; Premature writ petition
• Section: 147; 148

Judgement Text

"Page No.# 1/4 GAHC010210272021 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/6600/2021 EXOTICA PROMOTERS LLP AND ANR. ABC HOUSE 1ST FLOOR T.R. PHOOKAN ROAD, GUWAHATI, KAMRUP ASSAM, P.O. GUWAHATYI-781001 P.S. FANCY BAZAR DIST. KAMRUP METRO, ASSAM 2: SURENDRA KUMAR AGARWAL HANSPAL BUILDING C/O CENTRAL MOTORS A.T. ROAD P.O. GUWAHATI-781001 P.S. FANCY BAZAR DIST. KAMRUP METRO ASSA VERSUS THE INCOME TAX OFFICER WARD 1 (2) GUWAHATI AND 5 ORS. AAYAKAR BHAWAN CHRISTAN BASTI G.S. ROAD, P.O. GUWAHATI-781005 P.S DISPUR, DIST. KAMRUP METRO, ASSAM 2:JOINT COMMISSIONER OF INCOME TAX RANGE-1 GUWAHATI AAYAKAR BHAWAN CHRISTAN BASTI G.S. ROAD P.O. GUWAHATI-781005 P.S DISPUR DIST. KAMRUP METRO ASSAM 3:PRINCIPAL COMMISSIONER/COMMISSIONER OF INCOME TAX GUWAHATI-1 GUWAHATI AAYAKAR BHAWAN CHRISTAN BASTI G.S. ROAD P.O. GUWAHATI-781005 P.S DISPUR DIST. KAMRUP METRO ASSAM 4:PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (CCA) NER GUWAHATI Page No.# 2/4 O/O PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX NER FIRST FLOOR AAYAKAR BHAWAN CHRISTAN BASTI G.S. ROAD P.O. GUWAHATI-781005 P.S DISPUR DIST. KAMRUP METRO ASSAM 5:CENTRAL BOARD OF DIRECT TAXES REP. BY ITS CHAIRPERSON UNDER THE MINISTRY OF FINANCE (DEPTT. OF REVENUE) GOVT. OF INDIA NORTH BLOCK NEW DELHI-110001 6:UNION OF INDIA REP. BY THE SECRETARY TO THE MINISTRY OF FINANCE GOVT OF INDIA NEW DELH Advocate for the Petitioner : MR R GOENKA Advocate for the Respondent : ASSTT.S.G.I. BEFORE HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA ORDER Date : 15-12-2021 Heard Mr. R. Goenka, learned counsel for the petitioner, who submits that the procedure adopted by the respondents in re-opening the case of the petitioner under Section 147 of the Income Tax Act, 1961 is illegal and accordingly, should be set aside. 2. The petitioner’s case is that the petitioner was issued a notice dated 26.03.2021 under Section 148 of the Income Tax Act, 1961, hereinafter referred to as IT Act, stating that as the Assessing Officer had reason to believe that the petitioner’s income, chargeable to tax for the assessment year 2017-2018 had escaped assessment, within the meaning of Section 147 of the IT Act, the income for the said assessment year was to be assessed/re-assessed. 3. The petitioner’s counsels submits that in terms of Section 147 of the IT Act, Page No.# 3/4 assessment/re-assessment of an income can be done, if the Assessing Officer has the reason to believe that any income chargeable to tax has escaped assessment for any assessment year. He, however, submits that in the present case, there is no direct link between the reasons recorded by the respondents and the belief of the Assessing Officer to the effect that any income chargeable to tax has escaped assessment. He also submits that the respondent authority had reason to believe that the petitioner had been the beneficiary of a loan amount of Rs. 38,91,000/-, allegedly received from M/s Vishal Metal & Mining Corporation. However, the petitioner in his objections dated 17.07.2021 submitted to the respondent authorities had explained that no loan had been given to them by M/s Vishal Metal & Mining Corporation and in fact, the said amount of Rs. 38,91,000/- had instead been given by the petitioner to M/s Vishal Metal & Mining Corporation as loan, by way of 2 (two) cheques, i.e. Rs. 38,91,000+Rs.74,750. The petitioner’s counsel submits that the said loan amount has been given back to the petitioner on 12.03.2020. 4. The petitioner’s counsel submits that in view of the fact that the respondents have not taken into consideration the reasons given by the petitioner with respect to the alleged income, which was alleged to have escaped assessment, the procedure pending before the respondents under Section 148 of the IT Act should be set aside. He also submits that the prayer of the petitioner to drop the proceedings under Section 148 of the IT Act has been rejected by the respondents vide Letter dated 17.09.2021. 5. Mr. S. Sarma, appearing on behalf of the Income Tax Department submits that the final decision with respect to the proceedings under Section 148 of the IT has not been made by the respondents till date and as such, the present case is a pre-mature. He submits that even after a decision is passed by the respondent with respect to the case under Section 148 of the IT Act, 1961, the petitioner will have an opportunity to file an appeal before the Commissioner of Income Tax (Appeals), the Income Tax Appellate Tribunal and the High Court. He, accordingly, submits that the present writ petition should not be entertained at this stage. Page No.# 4/4 6. On considering the fact that the proceedings under Section 148 of the IT Act, 1961, which had started with the issuance of the notice on 26.03.2021 and the petitioner has taken part in the proceedings, this Court is not inclined to entertain the present petition. Further, the respondents have not taken a final decision with regard to the above proceeding and as such, the present writ petition is found to be pre- mature. 7. Accordingly, the writ petition stands dismissed. JUDGE Comparing Assistant "