Bombay High Court
Gopal Tukaram Bitode vs Income Tax Officer, Akola And ... on 10 November, 2022
Bench: A.S. Chandurkar, Urmila Sachin Phalke
WP-4141-22 with CONNECTED WPs..odt 1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH : NAGPUR.
WRIT PETITION NO. 4141 of 2022
Gopal Tukaram Bitode
Versus.
Income Tax Officer, Ward-1, Akola and two others.
with
WRIT PETITION NO. 4143 of 2022
Gopal Tukaram Bitode
Versus.
Income Tax Officer, Ward-1, Akola and two others.
with
WRIT PETITION NO. 4234 of 2022
Gopal Tukaram Bitode
Versus.
Income Tax Officer, Ward-1, Akola and two others.
with
WRIT PETITION NO. 4890 of 2022
Shipadevi Sunilkumar Kediya
Versus.
Income Tax Officer, Ward-1, Khamgaon and two others.
with
WRIT PETITION NO. 4896 of 2022
Shipadevi Sunilkumar Kediya
Versus.
Income Tax Officer, Ward-1, Khamgaon and two others.
with
WRIT PETITION NO. 2420 of 2022
Prakash Madhaorao Dani
Versus.
Income Tax Officer, Ward-1, Yavatmal and two others.
with
WRIT PETITION NO. 2421 of 2022
Prakash Madhaorao Dani
Versus.
Income Tax Officer, Ward-1, Yavatmal and two others.
....
Shri Ram D. Heda, Advocate for petitioner in all writ petitions.
Shri Anand Parchure, Advocate for respondents in all writ petitions.
....
WP-4141-22 with CONNECTED WPs..odt 2
CORAM :- A.S.CHANDURKAR AND URMILA JOSHI-PHALKE, JJ.
ARGUMENTS WERE HEARD ON : 3rd OCTOBER 2022
ORDER IS PRONOUNCED ON : 10th NOVEMBER, 2022.
In these writ petitions filed under Article 226 of the Constitution of
India challenge has been raised to the orders of assessment passed by the
National E-Assessment Centre, New Delhi under Section 147 read with
Section 144B of the Income Tax Act, 1961 (for short, the Act of 1961). A
preliminary objection has been raised by the respondents to the
maintainability of the writ petitions on the ground that the petitioners have
a statutory remedy by way of an appeal under Section 246 (1) of the Act of
1961 and for that reason the writ petitions do not deserve to be entertained.
2. Before considering the preliminary objection as raised, we may refer
to certain relevant aspects. According to the petitioners Writ Petition
No.4141 of 2022 can be considered as the lead petition since the pleadings
of the parties therein are complete. With regard to the Assessment Year
2015-16 a notice under Section 148 of the Act of 1961 dated 29.03.2021
was issued to the petitioner by the Income Tax Officer in which it was stated
that he had reasons to believe that the income chargeable to tax for the
Assessment Year 2015-16 had escaped assessment within the meaning of
Section 147 of the Act of 1961. It was therefore proposed to assess/re-
assess the income/loss for the said Assessment Year. The petitioner was
thus called upon to deliver a return in the prescribed form for the said
assessment year. Accordingly the petitioner submitted his return on
22.01.2022. On 27.01.2022 a notice was issued to the petitioner under
Section 143(2) read with Section 147 of the Act of 1961. As per annexures
to the said notice the reasons for re-opening the case under Section 147 of
the Act of 1961 were indicated. It was stated that the Assessment Officer
collected/received information uploaded on Insight Portal and flagged as
high risk CRIU/VRU information. The details mentioned were that search
and seizure action was carried out in the case of M/s. Renuka Mata Multi-
State Urban Co-operative Credit Society Limited. During the search it was
noticed that huge money was deposited in the bank accounts maintained in
the Society and during the course of assessment, the Society could not
explain the source for the same. For verifying the information after making
necessary enquiries, it was found that the petitioner had deposited an
amount of Rs.8,41,93,228/- in his account held with M/s. Renuka Mata
Multi-State Urban Co-operative Credit Society Limited during the Financial
Year 2014-15. It was thus stated that there was a reason to believe that the
aforesaid total deposit during the Financial Year 2014-15 that was
chargeable to tax had escaped assessment for the Assessment Year 2015-16
within the meaning of Section 147 of the Act of 1961. It was stated that
since period of more than four years from the end of Assessment Year 2015-
16 had not elapsed, necessary sanction was obtained from the Additional
Commissioner of Income Tax as per Section 151 of the Act of 1961 for
issuing notice under Section 148 of the Act of 1961.
3. In response to the show cause notice issued under Section 142(1) of
the Act of 1961, the petitioner submitted his reply on 28.02.2022. He stated
that on account of his illiteracy and lack of knowledge, he had not
maintained any books of accounts and had also not filed his return of
income for the said assessment year. The return was not filed for want of
old record. On 21.03.2022 a show cause notice was issued to the petitioner
as to why variation as proposed should not be made. It stated that the
source of cash deposited being Rs.8,41,93,228/- had remained unexplained
and therefore treating it as unexplained money under Section 69A of the Act
of 1961 it was proposed to be added to the total income of the petitioner. It
was also proposed to initiate penalty proceedings under Section 271(1)(c)
of the Act of 1961. In response to the said show cause notice the petitioner
on 24.03.2022 stated that he had accepted total deposits for the Assessment
Year 2014-15 in the bank accounts held with the Society. It was further
stated that there was no supporting evidence in support of the statements
made in the show cause notice.
4. On 25.03.2022 an assessment order under Section 147 read with
Section 144B of the Act of 1961 came to be passed. In the said order it was
stated that the source of cash deposited which was Rs.8,41,93,228/- had
remained unexplained. The stand of the petitioner that the transactions
made through his bank account were without his knowledge was not
accepted. The reply of the petitioner was found to be not acceptable.
Accordingly the total income of the petitioner came to be assessed at
Rs.8,45,05,360/- and it was directed to issue a demand notice as well as a
penalty notice under Section 271 (1)(c) of the Act of 1961. Consequentially
a notice for penalty was issued on the same day. The order of assessment as
passed is under challenge in these writ petitions.
5. Shri Ram Heda, learned counsel for the petitioners submitted the
respondents had no authority to re-open the assessment under Section 148
of the Act of 1961 for the reasons for which it was sought to be re-opened.
According to him, since the re-opening of the assessment was pursuant to
the search and seizure carried out in the case of M/s. Renuka Mata Multi-
State Urban Co-operative Credit Society Limited the respondents ought to
have proceeded under Section 153C of the Act of 1961. Despite the fact
that the re-opening ought to have been done by invoking the provisions of
Section 153C of the Act of 1961, recourse had been taken to the provisions
of Section 148 of the Act of 1961. Inviting attention to the relevant
statutory provisions, it was submitted that under Section 153C (1)(b) when
any books of account or documents, seized or requisitioned, pertains or
pertain to, or any information contained therein, related to a person other
than the person referred to in Section 153A, there was a jurisdiction to re-
open the proceedings accordingly. It was an admitted position that only on
the basis of the search and seizure operations at M/s. Renuka Mata Multi-
State Urban Co-operative Credit Society Limited that the Assessing Officer
had reason to believe that the alleged income had escaped assessment.
Instead of invoking jurisdiction under Section 153C, the notice under
Section 148 came to be issued. The search in question was conducted on
26.05.2017 and therefore the re-opening of the assessment could have been
done only under Section 153C of the Act of 1961. This aspect being
jurisdictional in nature, the High Court could entertain the writ petitions
under Article 226 of the Constitution of India and strike down the orders of
assessment. No purpose would be served by driving the petitioners to
invoke the statutory remedy as provided under the Act of 1961. Inviting
attention to the judgment of the Hon'ble Supreme Court in Magadh Sugar &
Energy Limited Vs. The State of Bihar and others [2021 (6) BLJ 356] it was
submitted that when an action is complained to be without jurisdiction, the
extra ordinary jurisdiction could be invoked under Article 226 of the
Constitution of India. Reliance was also placed on the decisions in Kanwar
Singh Saini Vs. High Court of Delhi [2011(10) SCALE 725], Assistant
Commissioner of Income-Tax Vs. Hotel Blue Moon [(2010) 188 Taxman
113(SC)], Commissioner of Income Tax Vs. Laxman Das Khandelwal
[(2019) 266 Taxman 171(SC), Indus Towers Ltd. Vs. Deputy Commissioner
of Income Tax, Circle-ii(1) [(2017) 82 Taxman 430 (Delhi) and Pr.
Commissioner of Income-tax Vs. Shri Jai Shiv Shankar Traders (P) Ltd.
[(2015) 64 Taxman 220 (Delhi), Writ Petition No.2948 of 2021 (Nagpur
Bench) (Murli Industries Limited Vs. Assistant Commissioner of Income Tax
and others) with connected writ petition decided on 23.12.2021 and the
judgment of the Gurjarat High Court in R/Special Civil Application
No.17557 of 2018 [Heval Navinbhai Patel C/o Ketan H Shah Vs. Income Tax
Officer Ward 3(2)(2)] with connected civil application decided on
01.02.2021. Since there was no dispute on any factual aspects and as the
jurisdiction had been wrongly assumed under Section 148 of the Act of
1961, the writ petitions were liable to be entertained on merits. The
learned counsel also referred to the Notification dated 17.09.2020 issued by
the Central Board of Direct Taxes to all the Principal Chief Commissioners of
Income Tax as regards the procedure to be followed in the matter of search
and seizure. The re-opening was contrary to the aforesaid procedure. It
was thus prayed that the impugned orders of assessment be set aside as
without jurisdiction.
6. Shri Anand Parchure, learned counsel for the respondents opposed
the writ petitions by urging that an efficacious statutory remedy was
available to the petitioners for being invoked. The remedy of appeal under
Section 246 (1) of the Act of 1961 being available, there was no reason
whatsoever to permit the petitioners to by-pass the same. Inviting attention
to the reply filed on behalf of the respondents it was submitted that the re-
opening of the assessment under Section 148 of the Act of 1961 was
justified. The Income Tax Officer had not received any books of account or
documents or assets, seized or requisitioned during the search. The
information in the case of the petitioners was shared by the Assistant
Commissioner of Income Tax on the basis of enquiries conducted during the
assessment proceedings in the case of M/s. Renuka Mata Multi-State Urban
Co-operative Credit Society Limited. The information uploaded on Insight
Portal and flagged as high risk information. Reasons were also recorded for
re-opening the case under Section 147 of the Act of 1961. Notice under
Section 148 of the Act of 1961 was issued after approval of the competent
authority. Hence the Assessing Officer was justified in proceeding on the
basis that there were reasons to believe that the income chargeable to tax
had escaped assessment for the Assessment Year 2015-16. The provisions of
Section 153C of the Act of 1961 were not at all attracted and hence there
was no reason to entertain the writ petitions on the grounds as urged by the
petitioners. In support of his submissions the learned counsel placed
reliance on the decision of the Hon'ble Supreme Court in Civil Appeal
No.4956 of 2022 (State of Maharashtra and others vs. Greatship (India)
Limited) decided on 20.09.2022. In absence of any jurisdictional aspect
being attracted, the writ petitions were not liable to be entertained.
7. Having heard the learned counsel for the parties and having perused
the material on record, we are of the considered view that the writ petitions
as filed under Article 226 of the Constitution of India do not deserve to be
entertained in the absence of any jurisdictional aspect being involved and
the petitioners can be permitted to avail the statutory remedy as available
under the Act of 1961.
Alongwith the notice issued under Section 148 of the Act of 1961 the
reasons for re-opening the case under Section 147 of the Act of 1961 have
been indicated. It has been stated that the information had been uploaded
on Insight Portal and flagged as high risk CRIU/VRU information. As per
the details, it was stated that search and seizure action was carried out in
the case of M/s. Renuka Mata Multi-State Urban Co-operative Credit Society
Limited on 26.05.2017. It was found that huge money was deposited in the
account maintained in the Society and during the course of assessment, the
Society could not explain the source for the same. Thereafter during the
course of assessment proceedings by the Deputy Commissioner of Income
Tax certain data was collected. On verification, the Assessment Officer
provided information of the persons in whose accounts held with M/s.
Renuka Mata Multi-State Urban Co-operative Credit Society Limited large
credits were seen. The petitioner is one of the depositors having account
with the said Society. It is on the basis of this information received and
enquiries made that there was reason to believe that there had been
escapement of income. After obtaining necessary sanction under Section
151 of the Act of 1961, the said notice under Section 148 of the Act of 1961
came to be issued.
8. According to the petitioners, there was no jurisdiction to re-open the
assessment under Section 148 of the Act of 1961. Since the re-opening was
pursuant to the search and seizure operations carried out at M/s. Renuka
Mata Multi-State Urban Co-operative Credit Society Limited and as the
search was carried out prior to 01.04.2021, the jurisdiction under Section
153C ought to have been invoked. On the other hand, according to the
respondents it is in view of the information shared by the Assistant
Commissioner of Income Tax as well as the information uploaded on Insight
Portal and flagged as high risk CRIU/VRU information that the re-opening
was under Section 147 of the Act of 1961. In paragraph 5.11 of the reply it
has been stated by the respondents as under :
"5.11 Reply as to Grounds i, ii, iii, & iv- The petitioner has
taken ground in these paras that reopening of his case
under Section 148 of the Income Tax Act, 1961 based on
the information received from a search and seizure action
under Section 132 is contrary to the law laid down under
the provisions of Section 153 C of the Income Tax Act,
1961. In this context, it is submitted that respondent no.1
has not received any books of account or documents or
assets, seized or requisitioned during the search in case of
petitioner. However, information in the case of petitioner
was shared by ACIT, Central Circle 4(4), Mumbai on the
basis of enquiries conducted during the assessment
proceedings in case of M/s. Renuka Mata Multi-State
Urban Co-operative Credit Society Limited in whose case
search and seizure action under Section 132 was carried
out. The petitioner Shri Gopal Tukaram Bitode having PAN
AMFPB6343L was having account with Shri Renuka Mata
Multi-State Urban Co-operative Credit Society Limited. On
the basis of information uploaded on Insight Portal and
flagged as High Risk CRIU/VRU information and after
enquiries and verification, Respondent no.1 has recorded
reasons for reopening the case under Section 147.
Thereafter, notice under Section 148 was issued after
approval of competent authority. Thus, proceedings
initiated against the petitioner under Section 148 of the
Income Tax Act, 1961 are correct as the Assessing Officer
was having reason to believe that income chargeable to tax
has escaped assessment for AY 2015-16. In the light of
above facts, provisions of Section 153 C are not applicable
in the case."
We find that the aforesaid stand is sufficient to refuse to entertain
the writ petitions filed under Article 226 of the Constitution of India. The
respondent have specifically asserted that they have proceeded to re-open
the assessment in the light of the information uploaded on Insight Portal.
The same is quoted to be a reason to believe that the income chargeable to
tax had escaped assessment. It has also been asserted that the Income Tax
Officer has not received any books of account or documents or assets seized
or requisitioned during the search at M/s. Renuka Mata Multi-State Urban
Co-operative Credit Society Limited in the case of the petitioner. We
therefore find that it would necessary for the petitioners to contest and
challenge the assessment orders on merits so as to substantiate the stand
that the re-opening of the proceedings under Section 147 of the Act of 1961
was not at all justified and thus without jurisdiction.
9. Another relevant aspect to be considered is that in reply to the show
cause notice the petitioners did not seek to challenge the re-opening on the
ground that it was without jurisdiction since the assessment was not sought
to be re-opened in the light of Section 153C of the Act of 1961. Having
responded to the show cause notice and having contested the same, the
petitioners have permitted the orders of assessment to be passed. It would
have been a different matter had the petitioners challenged the notice issued
under Section 148 of the Act of 1961 seeking to re-open the proceedings at
that stage itself. The petitioners permitted the authorities to proceed under
Section 147 by responding to the notice. It is only after passing of the
assessment orders that is now sought to be urged that the re-opening was
without jurisdiction and it ought to have been only under Section 153C of
the Act of 1961. We may not be understood to have stated that in no case
could such challenge be raised to the jurisdiction to re-opening of the
proceedings. However in the facts of the present cases when in the reply to
the show cause notice such stand as regards lack of jurisdiction was not
raised and the same is being now raised after passing of the assessment
orders, we are not inclined to invoke extra ordinary jurisdiction in favour of
the petitioners especially since an efficacious statutory remedy is available.
10. There can be no dispute with the proposition that if the impugned
exercise is without jurisdiction, extra ordinary jurisdiction under Article 226
of the Constitution of India could be invoked. Similarly, acquiescence of a
party would also not be relevant in that regard. However in the facts of the
present cases when it is asserted by the respondents that the re-opening of
the proceedings is based on the information uploaded on Insight Portal, the
same is found sufficient for not invoking the extra ordinary jurisdiction. The
petitioners have sought to rely upon the order dated 02.05.2022 passed in
Writ Petition No.4714 of 2022 (Ramnivas Satyanarayan Dodiya Vs. The
National Faceless Assessment Centre and Others) at the Aurangabad Bench.
It is however seen that the challenge therein was to the notice issued under
Section 148 of the Act of 1961 and not the orders of assessment as in the
present cases.
11. For all these reasons we are not inclined to entertain the writ
petitions as filed. By clarifying that it would be open for the petitioners to
invoke the statutory remedy as provided under the Income Tax Act, 1961
and by stating that this Court has not examined the impugned orders of
assessment on merits, the writ petitions are not entertained. The same are
accordingly dismissed. The observations made in this order are only for
considering the preliminary objection as raised and those observations do
not reflect consideration of the challenge on merits. The parties shall bear
their own costs.
(URMILA JOSHI-PHALKE, J.) (A.S.CHANDURKAR, J.)
Digitally Signed byJAYANT S
ANDURKAR
Personal Assistant
Signing Date:
10.11.2022 17:13
Andurkar..
