TMI Blog2015 (7) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... dent. ORAL JUDGMENT Honourable Mr.Justice A.G.Uraizee 1. The petitioner has invoked jurisdiction of this Court under Article 226 of the Constitution of Indian to challenge the Notice dated 20/03/2014 issued by the respondent under Section 148 of the Income Tax Act (hereinafter referred to as the Act for short) directing the petitioner to furnish the Return of income for the assessment year 2007-08. 2. The facts giving rise to the present petition, are as under: That the petitioner is a limited company and is engaged in business of manufacturing Tiles. A search u/s.132 of the Act, was carried out in the Asian Group of Cases on 07/02/2008. A warrant of authorization u/s.132 of the Act was issued in the name of the petitioner/ assessee and, thereafter, the case of the petitioner was centralized with CIT, Ahmedabad II Circle. Notice dated 16/07/2008 u/s.153-A of the Act calling upon the petitioner to file Return of income was served upon the petitioner. The petitioner file its Return of income for the Assessment Year 2007-08 on 27/06/2009 declaring his total income as ₹ 35,32,510/-. The case of the petitioner came to be selected for scrutiny and Notices u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, this Court is not without power under Article 226 of the Constitution of India to examine the validity of the reasons recorded in the impugned notice to hold that the notice is invalid. He has relied upon the reported judgement of this Court rendered in the case of Vishwanath Engineers V/s. Assistant Commissioner of Income Tax reported in [2014] 45 taxmann.com 15 (Gujarat), wherein it is held that availability of efficacious remedy is not an absolute bar particularly when the petition is admitted and affidavit is filed. He has also relied upon the unreported decision of Division Bench of this Court in the case of B G Exploration and Production India Limited 1 V/s. State of Gujarat through Secretary and others decided on 08/05/2015 as well as judgement rendered by the Rajasthan High Court in the case of Mukesh Modi V/s. Deputy Commissioner of Income-tax, Central Circle-1, Jodhpur reported in [2014] 224 TAXMAN 362/45 taxmann.com 468 (Rajasthan), wherein similar view is taken. Hon ble Supreme Court in the case of Commissioner of Income-Tax and others V/s. Chhabil Dass Agarwal (supra) relied upon by learned advocate for the appellant, has held as under: 19. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te for the petitioner. 5. Hon ble Supreme Court in leading case of Calcutta Discount Co.Ltd. V/s. Income-tax Officer reported in [1961] 41 ITR 191 (SC) as well as this Court in the case of Parixit Industries (P.) Ltd. V/s. Assistant Commissioner of Police (OSD), Circle-5, reported in [2012]20 taxmann.com 750 (Gujarat), wherein notice was challenged without exhausting alternative remedy. This Court also expressed similar view that when there is infraction of principle of natural justice or fundamental rights or the authority has acted without jurisdiction or has exceeded the jurisdiction vested in it, this Court is not powerless to exercise the jurisdiction under Article 226 of the Constitution of India. In view of the above principle regarding by passing statutory appeal to approach this Court under Article 226 of the Constitution of India, we have to examine as to whether the petitioner has made out the case to entertain this petition under Article 226 of the Constitution of India. It is an undisputed fact that search u/s.132 of the Act was carried out in the Asian Group of Industries on 07/02/2008 and, thereafter, Notice u/s.153 A was issued on 16/07/2008 calling upon the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endered in the case of Kanak Fabrics V/s. Income Tax Officer reported in [2014]49 taxmann.com 108 (Gujarat) to content that Assessing Officer has not recorded any satisfaction for reopening the case and, therefore, assumption of jurisdiction under section 147 of the Act is invalid. In the present case, we find that while assessment u/s.153 read with 143(3) was finalised and income of ₹ 2,08,45,708/- was added to the income declared by the petitioner on the basis of G.P. rate of 26.10% of suppressed sale value of ₹ 7,98,68,610/- therefore, now the respondent cannot contend that the petitioner had not made disclosure fully and truly to assess the income on the entire amount of sale value of ₹ 7,98,68,610/-. Therefore, impugned notice is illegal, invalid and without jurisdiction. 7. The contention of Mr.M.R.Bhatt, learned senior counsel for the respondent is that the Assessing Officer has recorded the reasons for giving the impugned notice to the petitioner. It is his further contention that at the time of search/raid, the petitioner had not disclosed the sale transaction of ₹ 7,98,68,610/- and, therefore, there was suppression on the part of the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advocate, wherein it is observed as under: Having perused the assessment order made by the Assessing Officer, the order made by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal, we are satisfied that the Tribunal was justified in rejecting the application under section 256(1). It cannot be matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit included in the consideration of sales. Therefore, unless there is a finding to the effect that investment by way of incurring the cost in acquiring the goods which have been sold has been made by the assessee and that has also not been disclosed. In the absence of such finding of fact the question whether the entire sum of undisclosed sale proceeds can be treated as income of the relevant assessment year answers by itself in the negative. The record goes to show that there is no finding nor any material has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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