Novelty Properties and Investment Pvt. Ltd. Vs Assistant Commissioner of Income Tax Circle 2 (2)(2), Mumbai and 2 Ors.

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Digitally signed 1 / 5 by GAURI GAURI AMIT AMIT GAEKWAD GAEKWAD Date: 2021.11.15 IN THE HIGH COURT OF JUDICATURE AT BOMBAY 10:37:29 +0530 ORDINARY ORIGINAL CIVIL JURISDICTION

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914.WP-3267-2019.doc

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WRIT PETITION NO.3267 OF 2019

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Novelty Properties & Investment Pvt. Ltd. ….Petitioner

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 V/s.

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Assistant Commissioner of Income
Tax, Circle – 2 (2) (2), Mumbai & Ors. ….Respondents

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----

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Mr. Madhur Agrawal i/b. Mr. Atul K. Jasani for petitioner.
Mr. P.C. Chhotaray for respondents – Revenue.

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 ----
 CORAM : K.R. SHRIRAM &
AMIT B. BORKAR, JJ.
 DATED : 29th OCTOBER 2021

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P.C. :

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1Petitioner is impugning notice dated 31st March 2019 and order
dated 30th October 2019 on various grounds and one of the primary ground
being that there is no reason to believe that income chargeable to tax has
escaped assessment.

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Since the header in the annexure to the approval under Section
151 of the said Act annexed to the petition is not legible, Mr. Agrawal
tenders a fresh print out of the same, which is taken on record and marked
“X” for identification. Petitioner to annex this document alongwith the
document annexed to the petition during the course of today. Re-verification
dispensed with.

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2According to petitioner, the notice issued is bad in law and
invalid because the requirements under Section 147 of the Income Tax Act,
1961 (the said Act), have not been satisfied before issuing the impugned

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Gauri Gaekwad

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914.WP-3267-2019.doc

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notice. According to petitioner, the reasons, which were given alongwith the
impugned notice clearly pertains to some other assessee and not petitioner.
Mr. Agrawal submitted that subsequently also two further reasons have been
given to petitioner, one being signed by officer who has issued the original
notice and the second being signed by succeeding officer but the approval,
which has been issued under Section 151 of the said Act, is based on
reasons pertaining to some other assessee and not petitioner. There is no
fresh approval for two further reasons which have been given to petitioner.
Mr. Agrawal submitted that on this ground alone, the petition should be
allowed.

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3No reply has been filed by respondents. On 6th December 2019,
almost two years ago, Mr. Chhotaray appearing for respondents had sought
time to take instructions and file affidavit in reply and at his instance, the
petition was stood over to 7th February 2020. Mr. Chhotaray stated that
reply could not be filed earlier due to COVID pandemic. The COVID
pandemic and lock down was declared on or about 25th March 2020
whereas time was granted to file reply on 6th December 2019 and the reply
was to be filed by 7th February 2020. Therefore, the excuse of COVID
pandemic is not acceptable and cannot be correct. There are so many other
matters where respondents have filed reply and in many matters they are
continuing to file reply. Therefore, this is not a valid excuse and request for
further time was rejected. Almost two years according to us is sufficient time
for respondents to file an affidavit in reply. We have also to note with regret

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Gauri Gaekwad

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that respondents in almost every matter are giving not more than one to
three working days for assessee to respond to their notices and in some
cases, the assessee is directed to, within two or three days file documents
running into thousand of pages or many third party documents which has to
be collected from third parties. Such unreasonable notices have been issued
even during lock down period, assessment orders are passed rejecting the
request for adjournment without considering the submissions made or
documents filed and without even granting personal hearing. Since we did
not grant further time, Mr. Chhotaray agreed to argue on the basis of
documents filed with the petition.

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4We have heard the counsels and perused the petition and the
documents annexed thereto. Petitioner has been served an approval dated
30th March 2019 issued under Section 151 of the said Act on which
document number is given as ITBA/AST/S/118/2018-19/1015577887(1).
The approval, as it appears from the document, has been given by one
Dinesh Chander Patwari, Principal Commissioner of Income Tax – 2,
Mumbai on 30th March 2019. The proposal was submitted by one Abhay
Siddharth Deware. The proposal was recommended by Ashutosh Rajhans,
who has noted “Yes, I am satisfied that this is a fit case to issue notice under
Section 148” and Dinesh Chander Patwari has endorsed a remark “after
considering the reason recorded by AO the approval is granted”. The
reasons annexed to the said approval pertains to another assessee being
M/s. Glance Investment (I) Pvt. Ltd. Mr. Chhotaray submitted that

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Gauri Gaekwad

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inadvertently wrong annexure was sent alongwith the approval under
Section 151. We do not find that statement even in the impugned order
rejecting the objections. Infact on the annexure, there is a printed header,
which reads as under :

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AAACN2635D – NOVELTY PROPERTIES AND INVESTMENT
PRIVATE LTD.
A.Y. 2012-13
ITBA/AST/S/118/2018-19/1015577887(1)

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In our view, there has been total non application of mind while
granting the approval.

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5Therefore, certainly it cannot be a case where a wrong
annexure has been stapled with the approval under Section 151 of the said
Act. Mr. Chhotaray thereafter, submitted that reasons for reopening were
given second time on 20th August 2019 and 12th September 2019. We do not
find any fresh approval based on second or third reasons. The only approval
is dated 30th March 2019 which has been granted relying upon the reasons
annexed thereto. Section 151 of the said Act in force at the relevant time, in
sub-section (1) provides that no notice shall be issued under Section 148 by
an Assessing Officer, after the expiry of a period of four years from the end
of the relevant assessment year, unless Principal Chief Commissioner or
Chief Commissioner or Principal Commissioner or Commissioner is satisfied,
on the reasons recorded by the Assessing Officer, that it is a fit case for the
issue of such notice. The only approval on file is one dated 30th March 2019
to which the reasons pertaining to another assessee is relied upon. For the

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Gauri Gaekwad

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subsequent reasons dated 20th August 2019 and 12th September 2019, no
satisfaction has been recorded by a Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner on those reasons
recorded by the Assessing Officer that it is a fit case for the issue of such
notice.

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6In the circumstances, we have to lean in favour of petitioner,
which we hereby do and the impugned notice dated 31st March 2019 and
impugned order dated 30th October 2019 are quashed and set aside.

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7Since the petition has been allowed on this ground alone, we

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have not expressed our views on the other grounds raised by petitioner.

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8Petition disposed.

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(AMIT B. BORKAR, J.)(K.R. SHRIRAM, J.)

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Gauri Gaekwad

Novelty Properties and Investment Pvt. Ltd. v. Assistant Commissioner of Income Tax Circle 2 (2)(2), Mumbai and 2 Ors.

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Novelty Properties and Investment Pvt. Ltd. v. Assistant Commissioner of Income Tax Circle 2 (2)(2), Mumbai and 2 Ors.

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