Sanjay Ratra vs Assistant Commissioner of Income Tax Circle 26(1)… — Income Tax | Bombay HC (2025)

Sanjay Ratra vs Assistant Commissioner of Income Tax Circle 26(1)… — Income Tax | Bombay HC (2025)

What the court decided

AI extract

Outcome

No relief; petition dismissed with no order as to costs, with liberty to raise the grounds before the assessing officer/appellate authority if and when occasion arises.

Issue for consideration

Whether the writ court will entertain grounds not raised in the petitioner's objections dated 8 April 2023, which were purely on the merits. +5 more

Court's answer

The objections dated 8 April 2023 were purely on the merits; the Court declines to exercise writ jurisdiction to permit the petitioner to raise grounds which were not raised in the objections.

Ratio / Principle

Prima facie rejecting the submission that the issues were examined during regular assessment: the alleged cash receipt was not examined since the Faridabad Officer's information arrived only after conclusion of the assessment proceedings (assessment concluded 30 November 2018; information received 21 February 2022).

Key takeaways

The questionnaire in the regular assessment proceedings contained no query on credit card expenses or the alleged cash receipt, the assessment being a limited scrutiny confined to Chapter VI-A deductions; and since the petitioner did not enclose the submissions made during assessment proceedings, no conclusive findings can be given in writ proceedings.ratio¶62
The reopening is founded on the 'information' reproduced in the annexure to the Section 148A(b) notice, in accordance with the Risk Management Strategy formulated by the CBDT; the erroneous statement therein that no return was filed (explained by the respondents as a typographical error) is not, prima facie, the basis of reopening, and the submission is rejected as better examined in appellate proceedings.ratio¶67

Detailed headnote1 paragraphs

Bombay High Court (Ordinary Original Civil Jurisdiction), Writ Petition No. 38 of 2025 - Sanjay Ratra v. Assistant Commissioner of Income Tax Circle, Mumbai and others (M. S. Sonak & Jitendra Jain, JJ.; judgment per Jitendra Jain, J.; pronounced 7 January 2025). Petition under Article 226 challenging the Section 148, Income Tax Act 1961 notice dated 17 April 2023 for AY 2016-17, issued after a Section 148A(b) notice (24 March 2023) founded on CBDT Risk Management Strategy information of alleged undisclosed cash of Rs.1.30 crore and credit card transactions of Rs.19,09,144/-, the larger period under Section 149(1)(b) being invoked as the amount exceeded Rs.50 lakhs. Held (all views prima facie, for deciding exercise of writ jurisdiction, merits left to the assessing officer/appellate fora): the objections of 8 April 2023 were purely on merits, so unraised grounds are not entertained in writ; the cash-receipt and credit-card items were not examined in the limited-scrutiny assessment concluded 30 November 2018 (Faridabad information received 21 February 2022; questionnaire silent; no conclusive findings possible absent the assessment-stage submissions); the reopening rests on the 'information', the annexure's 'return not filed' statement being explained as a typographical error; Trilochanlal Goyal (Delhi HC) is inapplicable, the pre-amended Section 148 lacking 'information', and Narendra Kumar Shah is distinguishable on facts; the Section 153C submission fails as the information covered both search-linked cash and credit-card items; the Hexaware ground lacked foundational facts; and the Section 151 approval (remarks column, Items 21 and 22) records perusal of the draft order, material and consideration, showing application of mind. Petition dismissed, no order as to costs; liberty to urge the grounds in reassessment/appellate proceedings.

Issues for consideration

6 issues framed by the court

AI extract

1.
Whether the writ court will entertain grounds not raised in the petitioner's objections dated 8 April 2023, which were purely on the merits.¶57
The court held
The objections dated 8 April 2023 were purely on the merits; the Court declines to exercise writ jurisdiction to permit the petitioner to raise grounds which were not raised in the objections.ratio¶57
2.
Whether the alleged cash receipt and credit card transactions were examined during the regular assessment proceedings, rendering the impugned proceedings without jurisdiction.¶43
The court held
Prima facie rejecting the submission that the issues were examined during regular assessment: the alleged cash receipt was not examined since the Faridabad Officer's information arrived only after conclusion of the assessment proceedings (assessment concluded 30 November 2018; information received 21 February 2022).ratio¶62
3.
Whether the reopening is vitiated because the annexure to the Section 148A(b) notice proceeded on the incorrect statement that the return was not filed, although a return had in fact been filed.¶67
The court held
The reopening is founded on the 'information' reproduced in the annexure to the Section 148A(b) notice, in accordance with the Risk Management Strategy formulated by the CBDT; the erroneous statement therein that no return was filed (explained by the respondents as a typographical error) is not, prima facie, the basis of reopening, and the submission is rejected as better examined in appellate proceedings.ratio¶67
4.
Whether, since the search on the purchaser of the land (Faridabad party) took place on 6 June 2018, prior to 1 April 2021, notice ought to have been issued under Section 153C rather than under Section 148/148A.¶42
The court held
The submission that Section 153C (and not Section 148A) applies because the Faridabad search preceded 1 April 2021 is prima facie rejected, since the information in question relates not only to the search-linked alleged cash receipt but also to credit card expenses and credit card transactions.ratio¶73
5.
Whether the impugned proceedings are covered by this Court's decision in Hexaware Technologies Ltd.¶74
The court held
The Hexaware Technologies ground cannot be considered: no ground was raised on that issue in the petition (save a paragraph on delay in approaching the Court) and no foundational facts are stated; the petitioner is at liberty to raise it before the appellate authority if occasion arises.ratio¶74
6.
Whether the approval under Section 151 granting sanction for issuance of the Section 148 notice was without application of mind.¶75
The court held
The approval under Section 151 discloses application of mind: in the remarks column (Items 21 and 22) the approving authority recorded perusal of the annexure/draft order, reference to the material available on record, its consideration and the Risk Management Strategy information; it is not a mere 'yes' in the approval column.ratio¶79