Quashed

Kismati Ghanshyam Yadav v. the Income Tax Officer - 16 (2) (4) and 2 Ors.

Bombay HC20 Dec 2021WP/3232/2019

Case brief

AI extract

What is this about?

The court quashed an income tax notice u/s 148 issued after the expiry of four years. It held that the authority failed to demonstrate a failure to truly and fully disclose material facts regarding agricultural income and opening cash balance, rendering the notice without jurisdiction.

What did the court decide?

The impugned notice dated 30th March 2019 u/s 148 and the order rejecting objections dated 28th October 2019 were quashed, cancelled and set aside. Petition allowed.

Kismati Ghanshyam Yadav Vs the Income Tax Officer - 16 (2) (4) and… — Income Tax | Bombay HC (2021)

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Digitally signed by GAURI GAURI AMIT AMIT GAEKWAD GAEKWAD Date: 2021.12.22 15:48:29 +0530

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910.WP-3232-2019.doc

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

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WRIT PETITION NO.3232 OF 2019

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Kismati Ghanshyam Yadav ….Petitioner

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 V/s.

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The Income Tax Officer – 16 (2) (4) & Ors. ….Respondents

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----

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Mr. Mandar Vaidya for petitioner.
Mr. Suresh Kumar for respondents.

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 ----
 CORAM : K.R. SHRIRAM &
AMIT B. BORKAR, JJ.
 DATED : 20th DECEMBER 2021

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P.C. :

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1This petition is impugning a notice dated 30th March 2019
issued under Section 148 of the Income Tax Act, 1961 (the said Act) for
Assessment Year 2012-2013 and the order rejecting petitioner's objections
passed on 28th October 2019.

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2Since the reopening is proposed after the expiry of four years
from the end of relevant assessment year and the original assessment order
has been passed under Section 143(3) read with Section 147 of the said Act,
the proviso to Section 147 of the said Act shall apply in as much as
respondents have to show that there was a failure on the part of assessee to
disclose truly and fully all material facts necessary for assessment.

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3The reasons recorded read as under :

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Reasons recorded for reopening the assessment u/s. 147 of
the Income Tax Act, 1961 :-

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Gauri Gaekwad

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910.WP-3232-2019.doc

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“On verification of the case records it was found that during
the F.Y. 2011-12 relevant to the A.Y. 2012-13 the assessee has
shown agricultural income of Rs.15,25,850/- in its return of
income. The cash from the agricultural income has been
deposited by the assessee in its bank account. The assessee
has shown an opening cash balance of Rs.10,60,062/- for
A.Y. 2012-13. However, on verification of the records it is
found that the assessee has not filed its return of income for
A.Y. 2011-12 u/s 139(1) of the I.T. Act. The assessment for
A.Y. 2011-12 was reopened u/s 148 of the I.T. Act and the
opening cash balance and the agricultural income shown by
the assessee along with other cash deposits was added back
to the total income.

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The assessee could not furnish a valid explanation for the
agricultural income and the opening cash balance for A.Y.
2012-13 was uncertain in view of the assessment proceeding
in the assessee’s case for A.Y. 2011-12, the entire agricultural
income shown by the assessee of Rs.15,25,850/- and the
opening cash balance of Rs.10,60,062/- for A.Y. 2012-13
remains unexplained.

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Therefore, I have reason to believe that the income arising
out of the income shown as agricultural income of
Rs.15,25,850/- and the opening cash balance of
Rs.10,60,062/-, totalling to the extent of Rs.25,85,912/- has
escaped assessment for the A.Y. 2012-13.

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………..”

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4From the reasons, it is obvious that respondent has come to a
conclusion that there has been escapement of income chargeable to tax on
the basis that entire agricultural income shown by the assessee of
Rs.15,25,850/- and the opening cash balance of Rs.10,60,062/- remains
unexplained.

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5 First of all, one cannot cull out from the reasons that there has been really any failure to fully and truly disclose. Moreover, the agricultural income of Rs.15,25,850/- has been considered in the assessment order dated 27^th March 2015 by the Assessing Officer while computing the total Gauri Gaekwad

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910.WP-3232-2019.doc

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income of the assessee. Therefore, it cannot be alleged that there was any
non disclosure by assessee.

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As regards the opening cash balance of Rs.10,60,062/- for
Assessment Year 2012-2013, for Assessment Year 2011-2012 the Assessing
Officer has already added Rs.10,19,238/- as unexplained cash credit under
Section 68 of the said Act. Moreover, the opening balance cannot be the
income for that particular year. At the most it can be considered as income
for the previous year. On these two grounds itself we will hold that the
notice dated 30th March 2019 issued under Section 148 of the said Act is not
valid and is without jurisdiction.

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6Petition is allowed in terms of prayer clause - (a), which reads

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as under :

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(a) that this Hon’ble Court may be pleased to issue a writ of
certiorari or writ in the nature of certiorari or any other
appropriate writ, direction or order under Article 226 of the
Constitution of India calling for the records of the case
leading to the issuance of the notice under Section 148 of the
Income Tax Act, 1961 dated 30th March 2019, being Ex-K
hereto and after going through the same and examining the
question of legality thereof to quash, cancel and set aside the
impugned notice dated 30th March 2019 being Ex-K hereto
and the order rejecting the petitioner’s objections dated
28th October 2019, being Ex-O hereto.

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7Petition disposed.

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(AMIT B. BORKAR, J.)

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Gauri Gaekwad

Kismati Ghanshyam Yadav v. the Income Tax Officer - 16 (2) (4) and 2 Ors.

Case brief

What is this about?

What did the court decide?

Kismati Ghanshyam Yadav v. the Income Tax Officer - 16 (2) (4) and 2 Ors.

Case brief

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What did the court decide?

What the court decided

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