Ms Kavitha Jain vs The Deputy Commissioner Of Income ...
2022 Latest Caselaw 2572 Kant

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 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE 16TH DAY OF FEBRUARY 2022

                         BEFORE

     THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV

         WRIT PETITION No.24214/2021 (T-IT)

BETWEEN:

MS. KAVITHA JAIN
WIFE OF SRI PUSHPARAJ JAIN
AGED ABOUT 39 YEARS,
NO.6-6/22,
NEAR EDEN SPORTS CLUB,
EDEN GARDEN, NANTHOOR,
MANGALURU - 575 005.                        ... PETITIONER

(BY SRI VIKRAM HUILGOL, SENIOR ADVOCATE A/W
    SRI BALRAM R. RAO, ADVOCATE)

AND:

1.     DEPUTY COMMISSIONER OF INCOME TAX,
       CENTRAL CIRCLE 1,
       MANGALORE - 575 001.

2.     INCOME TAX OFFICER,
       WARD 2(1),
       MANGALORE - 575 001.             ... RESPONDENTS

(BY SRI K.V. ARAVIND, ADVOCATE)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF CONSTITUTION OF INDIA, PRAYING TO QUASH THE
NOTICE PASSED U/S 148 OF THE ACT DATED 31.03.2021 FOR
THE ASSESSMENT YEAR 2017-18 IN DIN AND LETTER VIDE
ANNEXURE-E AND ETC.
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     THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY,
THE COURT MADE THE FOLLOWING:

                          ORDER

The petitioner has sought for issuance of writ of

certiorari to quash the notice passed under Section 148 of

the Income Tax Act,1961 ("the Act", for short) dated

31.03.2021 for the assessment year 2017-18 issued by the

second respondent.

2. The petitioner has sought for issuance of writ of

certiorari to quash the order rejecting the objections. The

petitioner has also challenged the invocation of Section 147

of the Act.

3. The learned Senior Counsel appearing for the

petitioner submits that the notice under Section 148 came

to be issued seeking to re-assess the income of the

petitioner and that the petitioner has sought for necessary

reasons for initiating Section 148 proceedings after having

filed the return.

4. It is pointed out that objections were filed as

regards to the reasons for re-opening the proceedings and

the said objections have been rejected at Annexure-'N'.

5. It is pointed out that the statement of the husband

of the petitioner on 02.02.2017 has been relied upon by the

Department which is the basis for their 148 notice. In the

statement of 02.02.2017, the husband of the petitioner is

stated to have declared suppression of income of the

petitioner of Rs.20 Lakhs for the financial year 2016-17.

6. It is further submitted that the said statement has

been retracted by the husband of the petitioner on

08.08.2018, copy of which is enclosed at Annexure-'C'.

Accordingly, it is submitted that there are no justifiable

reasons for re-opening the assessment by resort to

Section 148.

7. Reliance is placed on the judgment of this court in

the case of Commissioner of Income Tax v.

Dr.N.Thippa Setty reported in (2010) 230 CTR 265

(Karnataka).

8. The learned counsel for revenue has produced the

records.

9. Perused the materials relating to the reason for

re-opening the assessment in the case of the petitioner at

Para 6 under the caption "Basis of forming reasons to

believe and details of escapement of income" which would

reveal that the sole reason for initiating the proceedings is

the statement made by the husband of the petitioner and

there is no other reason that comes out from the record.

10. The observation at Para 6 of the said report is

extracted below:

"Sri.Pushparaj Jain, Husband of the Assessee in the course of statement u/s131 recorded during Survey u/s 133A, has in his capacity as Managing Director of the Company declared an additional income of Rs.20,00,000/- in the hands of Smt.Kavitha Jain, the Assessee,

for the A.Y.2017-18. The Assessee had not declared the additional income of Rs.20,00,000/- attributed to the above declaration in her Return of Income filed for the AY 2017-18. Hence, there is escapement of income to the extent of Rs.20,00,000/- for the AY 2017-18.

Hence, I have reason to believe that income of the Assessee of Rs.20,00,000/- chargeable to tax has escaped assessment within the meaning of explanation of Section (b) of Section 147 of the Income Tax Act, 1961."

11. It is to be noticed that for the purpose of

re-opening the assessment in terms of Section 148, the

only reason is the statement of the husband of the

petitioner which admittedly has been retracted.

12. This court while dealing with similar question has

observed under similar circumstances that retraction of the

statement had resulted in absence of any material to

warrant re-opening of the case against the assessee.

13. As there is no material available on record for

initiating the proceedings under Section 148, the impugned

order at Annexure-'N' is set aside and consequently the

notice at Annexure-'E' is set aside.

Sd/-

JUDGE

Np/-