JIN BHAKTI TRUST V. THE INCOME TAX OFFICER , WARD-5(3)(1)

SCA/4745/2022

AI Insights

Jin Bhakti Trust filed a petition under Article 226 of the Constitution challenging a notice issued by the Income Tax Officer under section 148 of the Income Tax Act, 1961, which sought to reopen the assessment for the year 2015-2016. The trust had initially declared 'Nil' income, and after scrutiny, the assessment was completed without any changes. However, a notice was issued in 2021 based on alleged large cash deposits made by the trust, prompting the reopening of the assessment. The trust contested the reopening, and the court's intervention was sought to ensure that their objections were considered before any further action was taken by the tax authorities.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 671233 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 29-08-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: M R BHATT; KARAN SANGHANI
• Assessee Lawyers: TUSHAR HEMANI; VAIBHAVI PARIKH
• Keywords: Cash deposits; Charitable Trust; Reopening of assessment; Scrutiny assessment
• Section: 148; 143(3); 142(1)

Judgement Text

"C/SCA/4745/2022 ORDER DATED: 29/08/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 4745 of 2022 ========================================================== JIN BHAKTI TRUST Versus THE INCOME TAX OFFICER , WARD-5(3)(1) ========================================================== Appearance: MR. TUSHAR HEMANI, SR. ADVOCATE, WITH MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MR. M.R.BHATT, SR. ADV. FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1,2 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 29/08/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) In view of the compass of the controversy and having regard to the request and consent of learned advocates appearing for the parties, the petition was taken up for final consideration today. 1.1 Rule, returnable forthwith. Learned advocate Mr. Karan Sanghani for M. R. Bhatt & Co. waives service of Rule on behalf of the respondents. 1.2 Heard learned senior advocate Mr. Tushar Hemani assisted by learned advocate Ms. Vaibhavi Parikh for the petitioner and learned senior advocate Mr. M. R. Bhatt with learned advocate Mr. Karan Sanghani for M. R. Bhatt & Co. for the respondent revenue. 2. By filling this petition under Article 226 of the Constitution, the Page 1 of 4 C/SCA/4745/2022 ORDER DATED: 29/08/2022 challenge is directed against notice dated 31.3.2021 issued by the Assessing Officer, Ward 5 (3) (1) Ahmedbad. It is a notice under section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) seeking to reopen the assessment of the petitioner in respect of Assessment Year 2015-2016. 3. Noticing the basic facts, the petitioner who was a charitable trust filed its return of income in the year under consideration on 15.9.2015, in which ‘Nil’ income was declared. It appears that the return of the petitioner was selected for scrutiny assessment and the Income Tax authority required certain documents to be furnished by the petitioner by letter dated 6.9.2017. 3.1 In response to the said letters, the petitioner furnished the details including summary of donation received within the year and summary of corpus fund donation received within the year etc. Whatever details were further required, were also submitted to the department. Finally the assessment was framed under section 143(3) of the Act as per order dated 1.12.2017 without disturbing the return of income. 3.2 It is stated that thereafter all of a sudden on 31.3.2021, the respondents issued impugned notice under section 148 of the Act whereby the assessment done above as per order dated 1.12.2017 was sought to be reopened for the reasons recorded for reopening. 4. While the detailing of the reasons is not necessary in light of the order being passed by the court, it may be stated that the crux of the reason was that the petitioner trust made large cash deposits during the year under consideration as per the information received by the department from the inside portal. In reply to the notices in that regard, Page 2 of 4 C/SCA/4745/2022 ORDER DATED: 29/08/2022 the petitioner appears to have raised certain objections by letter dated 1.12.2021 stating that the reopening was not justified. 5. The primary grievance of the petitioner is that instead of disposing the objections raised by the petitioner against the re-opening notice, notice came to be issued by the respondent on 5.1.2022 and 25.1.2022 under section 142(1) of the Act in relation to the reopening proceedings in respect of the year under consideration. It is the submission that the impugned notice could not have been issued without applying mind to the various facts and aspects submitted by way of objections. 5.1 Learned senior advocate submitted that grievance of the petitioner would be satisfied if the court requires the authority to approprietly consider and dispose of the objections within stipulated time. Responding to this submission, learned senior advocate for the Income Tax authority submitted that the authorities will look into the objections and dispose of the same within the time the court may direct. 6. In the facts and circumstances of the case, this petition is disposed of by directing the competent authority of the respondent Income Tax authority to consider the objections dated 1.12.2021 filed by the petitioner to the re-opening notice under section 148 of the Act within a period of eight weeks from the date of receipt of the order on its own merits and in accordance with law. 6.1 It is clarified that this court has not gone into the merits of the case of the either side and nor has expressed anything on merits. 6.2 It goes without saying that since the court has not gone into the merits, all the contentions are kept open for the parties to be raised before Page 3 of 4 C/SCA/4745/2022 ORDER DATED: 29/08/2022 the authority. 7. This petition is accordingly disposed of. Rule is made absolute in the said terms. (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) C.M. JOSHI Page 4 of 4 "