TMI Blog2018 (1) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... roper sanction as is required under the proviso to Section 151(1) of the Income Tax Act. We need not go into the veracity and merits of the case any further at this stage. - Decided in favour of assessee - Writ Petition (T) No. 346 of 2017 - - - Dated:- 3-1-2018 - Hon'ble Shri Justice P. Sam Koshy For the Petitioner : Shri Salil Kapoor, Ms. Soumya Singh and Shri Amrito Das, Advocates For the Respondent : Smt. Naushina Afrin Ali, Advocate JUDGMENT 1. With the consent of the parties the matter was heard at motion stage. 2. The present petition under Article 226 of the Constitution of India has been filed assailing the notice dated 28.03.2017 issued under Section 148 of the Income Tax Act, 1961 (in short, the Act) and also the order dated 25.09.2017 whereby the objections preferred by the petitioner questioning the issuance of notice dated 28.03.2017 was rejected. 3. Brief facts relevant for adjudication of the present dispute is that, for the assessment year 2010-11 the petitioner had filed its return on 14.10.2010. Subsequently a notice under Section 143 (2) of the Act was issued to the petitioner by the income tax department on 12.09.2011 and finally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued notice under Section 148 of the Act. Further, there does not seem to have been any specific or strong case made out by the department for re-opening the assessment. 6. According to the petitioner, the reason to believe disclosed by the Assessing Authority was in respect of income of ₹ 2,14,79,440/- under the head of income from other sources for the year 2010-11 which according to the department, the petitioner had not disclosed while filing the return, and therefore, the same was treated as escaped assessment. 7. The petitioner tried to bring to the notice of the court that the department has totally failed to consider the previous years return which would reveal that there was no change in the share capital of the company for the year 2009-10 and also 2010-11 and the petitioner had subsequently given this information of nil rise in the capital during the year while submitting its return. All these facts have not been scrutinized by the department and in a superficial manner has issued a notice under Section 148 of the Act and also in a similar manner has rejected the objections which the petitioner had raised. He further states that there was no tangible materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the notice under Section 148 of the Act for reopening the assessment. According to the Department, it is a case where the petitioner himself had deliberately not disclosed the secured loan that it had received from other sources during the said period. According to the Department, it was a case where new materials were found in the course of the survey conducted under Section 133A. Since it was a case of new materials, it cannot be presumed that the reopening of assessment was on a change of opinion and for this reason also, the petition deserves to be rejected. 10. So far as the merits of the case is concerned, that has to be dealt with by the statutory authority prescribed under the Act which in the instant case would be the appellate authority. It was contended by the Income Tax Department that what is required under Section 151 is only a reason to believe that is to say that the Commissioner only needs to be satisfied on the reasons recorded by the assessing officer and it does not require concrete proof to be produced before the Commissioner while granting sanction. 11. So far as the judgments which have been relied upon by the petitioner is concerned, it was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under Section 148 beyond the period of 4 years, means, it is in addition to what is envisaged and required under the substantive provision of Section 151. With this statutory provision, if we look into the notice under Section 148 which has been issued as Annexure P/5 with the writ petition. For ready reference, the contents of notice under Section 148 is reproduced herein as under:- Whereas I have reasons to believe that your Income chargeable to Tax for the Assessment Year 2010-11 has escaped Assessment within the meaning of section 147 of the Income Tax Act, 1961. I, therefore, propose to assess/re-assess the income/ loss for the said Assessment Year and I hereby require you to deliver to me within 30 days from the service of this notice, a return in the prescribed form for the said Assessment Year. This notice is being issued after obtaining the necessary satisfaction of the additional Commissioner/ Commissioner of Income Tax/ Chief Commissioner of Income Tax. 14. Further, in reference to the demand made by the petitioner for providing the reasons to believe for issuance of notice under Section 148, the Income Tax Authorities vide their response ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148 was issued within the prescribed period of 4 years and it was this which was taken note of by the Bombay High Court while deciding the judgment in favour of the department. 18. The Bombay High Court in the case of Hindustan Liver of India vs. R.B. Wadkar (2004) 268 ITR 332, in paragraph 29 while deciding the case in favour of assessee has held as under:- It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. xxxxxxxxxxxxxxxx. It is for the Assessing Officer to form his opinion it is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. 19. Likewise, the Delhi High Court in the case of Principal Commissioner Income-tax-6 vs. Meenakshi Overseas (P.) Ltd. (2017) 82 taxmann.com 300 (Delhi) in paragraph No.24 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was based upon the recent decision of the Hon'ble Supreme Court in the case of Jeans Knit (P) Ltd. Bangalore vs. Deputy Commissioner, Income Tax, Bangalore MANU/SC/1691/2016, wherein the Hon'ble Supreme Court taking note of the decision of the Hon'ble Supreme Court in the case of Chhabil Das Agrawal's case has held that the writ petitions are maintainable questioning the issuance of notice under Section 148, if prima facie it is established that initiation is contrary to the provisions of the Income Tax Act. Thus, these two authoritative decisions of the Hon'ble Supreme Court in the case of Calcutta Discount (supra) as also in the case of Jeans Knit (supra) clearly negates the preliminary objections raised by the Income Tax Department. 24. Since this Court finds that issuance of notice under Section 148 at the first instance itself was without a proper sanction as is required under the proviso to Section 151(1) of the Income Tax Act. We need not go into the veracity and merits of the case any further at this stage. Leaving open the issue on merits, the present notice under Section 148 stands set-aside/quashed only on account of nonfulfillment of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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