SIDDHARTH TOTUKA S/O LATE SHRI ANIL TOTUKA V. ASSISTANT COMMISSIONER OF INCOME TAX

CW/13424/2021

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The case involves Siddharth Totuka, the petitioner, challenging a notice dated 24.03.2020 under Section 147/148 of the Income Tax Act, which pertained to the assessment year 2013-14. This notice was issued by the Assistant Commissioner of Income Tax, Circle-IV, Jaipur, for reopening the assessment based on a search conducted at the premises of Shri Ramesh Manihar. The petitioner argued that the reopening was not permissible under Section 148 as it was based on material collected during a search, which should have been addressed under Section 153-C of the Income Tax Act. The court referenced a similar case, Shyam Sunder Khandelwal vs. Assistant Commissioner of Income Tax, where it was held that the procedures under Section 153A and 153C are applicable in such scenarios. Consequently, the court set aside the notice and all consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 747820 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 18-04-2024
• Assessment Year: misc
• Other Referred Cases: Shyam Sunder Khandelwal vs. Assistant Commissioner of Income Tax
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SIDDHARTH BAPNA
• Assessee Lawyers: DILEEP SHIVPURI
• Keywords: Assessment Order; Income Tax; Reopening of assessment; Search and seizure
• Section: 147; 148; 153(A); 153 C

Judgement Text

"[2024:RJ-JP:18098-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 13424/2021 Siddharth Totuka S/o Late Shri Anil Totuka, Aged About 47 Years, C-11, K.k. Square, Prithvi Raj Road, C-Scheme, Jaipur. ----Petitioner Versus Assistant Commissioner Of Income Tax, Central Circle-04, New Central Revenue Building, Janpath, Jaipur. ----Respondent For Petitioner(s) : Mr. Dileep Shivpuri For Respondent(s) : Mr. Siddharth Bapna HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE BHUWAN GOYAL Order 18/04/2024 1. Heard. 2. Learned counsel for the petitioner would submit that the issue raised in this petition is no longer res integra and stands concluded under a common order passed by a Coordinate Bench of this Court on 19.03.2024 in Shyam Sunder Khandelwal vs. Assistant Commissioner of Income Tax (D.B. Civil Writ Petition No.18363/2019) and connected petitions. 3. Learned counsel for the parties bring to the notice of this Court that an appeal has already been filed against the assessment order which was passed later on. 4. Learned counsel for the petitioner makes an emphatic statement at the Bar that the appeal is still pending and no orders have been passed in that appeal. [2024:RJ-JP:18098-DB] (2 of 4) [CW-13424/2021] 5. Present petition has been filed by the petitioner challenging notice dated 24.03.2020 under Section 147/148 of the Income Tax Act pertaining to assessment year 2013-14 issued by the Assistant Commissioner of Income Tax, Circle-IV, Jaipur, reopening assessment for assessment year 2013-14 and also subsequent orders including the assessment order dated 23.09.2021, mainly on the ground that the basis for initiation of proceedings was a search carried out in the premises of Shri Ramesh Manihar. 6. It is the case of the petitioner that where the basis for reopening is not material independent of a search but based on material collected during search, reopening would be permissible only in accordance with the provisions of Section 153-C and recourse could not be had to Section 148 of the IT Act. 7. The aforesaid issue has been considered and decided by a Coordinate Bench of this Court in the case of Shyam Sunder Khandelwal (supra). In that case, it has been held as below: \"13.The heading of Section 153A is Assessment in Case of Search or Requisition. Section 153A notwithstanding Sections 139, 147, 148, 149, 151 and 153, obligates the AO to issue notices for furnishing income tax returns in a prescribed form and manner, for relevant year or years and for each of six assessment years preceding the assessment year relevant to previous years in which search is conducted (hereinafter referred to ‘relevant preceding years’) in cases of search and requisition. 14.As per first proviso total income is to be assessed or reassessed in respect of each of the assessment year. The second proviso provides that pending assessment or reassessment relating to the relevant preceding year on the date of initiation of search or requisition shall abate. Under the third proviso the Central Government may by Rules specify the class or classes of cases where the AO shall not issue notice for assessment or reassessment for the relevant preceding years. The exception being abated assessment or reassessment as per proviso (2). Under clause (a) of fourth proviso no [2024:RJ-JP:18098-DB] (3 of 4) [CW-13424/2021] notice for assessment or reassessment shall be issued in case escaped assessment amount revealed by the books of account or documents or evidence in possession of the AO is less than Rs.50 Lakh in the relevant year or in aggregate of the relevant assessment years. Clause (b) provides that income or part of it referred to Clause (a) should have escaped the assessment for such year or years. Clause (c) provides that the search or requisition should have been initiated on or after 01.04.2017. Explanation (1) explains the relevant assessment year. Explanation (2) provides that the ‘asset’ in the fourth proviso shall be inclusive of immovable property, land or building or both, shares and securities, loans and advances, financial deposits in Bank. Sub-section (2) deals with eventuality of annulment of assessment or reassessment made under sub-Section (1), in appeal or other legal proceedings. In such event the abated assessment or reassessment shall stand revived with effect from the date of receipt of order of such annulment by the Commissioner. As per the proviso on setting aside of annulment order the revival shall cease. 15.Section 153B deals with time limit for completion of assessment under Section 153A. 16.The heading of Section 153C is Assessment of Income of any other person. Proceedings under Section 153C are notwithstanding provisions of Sections 139, 147, 148, 149, 151 & 153. On satisfaction of the AO dealing with seized money, bullion, jewellery or valuable article or thing, seized or requisitioned books of account or document (for brevity ‘seized material’) that information contained in it belongs to or relates to person other than on whom search was conducted, shall hand over the seized material to the AO having jurisdiction of such other person. The AO on receiving the seized material and being satisfied that it has bearing on the determination of total income of relevant preceding years shall issue notice to assess or reassess the ‘total income’ of relevant preceding years and proceed in accordance with Section 153A. 17.Under first proviso the date of initiation of search or requisition in Sub-section (1) of Section 153A shall be the date of receiving of seized material by the AO having jurisdiction over the other person. Under second proviso the Central Government can frame Rules for the class or classes of cases of other persons to whom AO is not required to issue notice for assessing or [2024:RJ-JP:18098-DB] (4 of 4) [CW-13424/2021] reassessing for the relevant preceding years. The exception being abated assessment or reassessment. 18.Under Sub-Section (2) in case of receipt of seized material after the due date for furnishing the income tax return of assessment year in which the search was conducted or requisition made, the AO having the jurisdiction on such other persons shall issue notice for assessing or reassessing total income in manner and for the assessments years provided under Section 153A. Notice shall be issued even if no return was furnished by such persons and no notice was issued under Section 142(1) or where the return was furnished but no notice under Section 143(2) was served and the limitation had expired or where the assessment or reassessment was made. 19.As per Sub-section (3) the Section 153C shall not apply to the search or requisition made on or after 01.04.2021. 20.Section 153D provides that no order of assessment or reassessment shall be passed by the Officer below the rank of Joint Commissioner except with the prior approval of the Joint Commissioner. Proviso precludes the application of Section in cases where assessment or reassessment as per Section 144BA (12) is to be passed with prior approval of the Principal Commissioner or Commissioner.\" 8. In view of the above, this petition is also allowed and the notice as well as all consequential orders including orders of assessment are set aside. The petitioner shall submit a copy of this order before the Appellate Authority for closure of the appeal case. (BHUWAN GOYAL),J (MANINDRA MOHAN SHRIVASTAVA),CJ KAMLESH KUMAR-RAHUL/49 "