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BHAGIRATH AGGARWAL Vs. CIT
January, 31st 2013
        IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                         Judgment delivered on : 24.01.2013
+       W.P.(C) 7087/2012

        SHIVALIK BIMETAL CONTROLS LTD                            ..... Petitioner

                      versus

        INCOME TAX OFFICER                                        ..... Respondent

Advocates who appeared in this case:
For the Petitioner  : Mr Prakash Chand Yadav, Adv.
For the Respondent  : Mr Sanjeev Rajpal, Sr. Standing Counsel.

CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE R.V. EASWAR

                                  JUDGMENT

BADAR DURREZ AHMED, J (ORAL)

1.      This writ petition is directed against the notice dated 28.03.2012

under section 148 of the Income Tax Act, 1961 (hereinafter referred to as

,,the said Act) whereby the assessment for assessment year 2005 -06 is

sought to be reopened. The petitioner on receipt of the said notice filed

its objections on 08.05.2012. But, those objections were rejected by an

order dated 24.08.2012.




W.P.(C)7087/2012                                                         Page 1 of 5
2.      The purported reasons for issuance of the impugned notice under

section 148 of the said Act read as under: -


        "Assessment u/s 143(3) was completed on 19.04.2007 on
        total income of `5,64,85,110/- u/s 115JB as against the
        normal income of `3,16,410/-. It has been noticed that
        while completing the assessment, disallowance u/s 80-IC
        could not be made as the conditions as laid down in that
        section are not fulfilled. This resulted in under assessment
        of the income to the tune of `1,32,50,439/-.
        Section u/s 147 reads as under:
                   "Section 147....
                   Explanation 2 for the purposes of this section,
                   the following shall also be deemed to be cases
                   where income chargeable to tax has escaped
                   assessment namely:
                   (a)    .........
                   (b)    .........
                   (c)    where the assessment has been made,
                          but
                   i)     income chargeable to tax has been
                          under assessed; or
                   ii)    such income has been assessed at too
                          low a rate or
                   iii)   such income has been made the subject
                          of excessive relief under this Act; or
                   iv)    excessive     loss   or    depreciation
                          allowance or any other allowance under
                          this Act has been computed:"




W.P.(C)7087/2012                                                     Page 2 of 5
               In view of explanation 2 (c)(i) & (iv) to section 147,
        as quoted above, I have reason to believe that taxable
        income to the tune of `1,32,50,439/- has escaped
        assessment. Therefore it is proposed to issue notice u/s 148
        of the IT Act, 1961 in order to tax the above said escaped
        income. In view of the above, as per provisions of section
        151, it is requested to kindly accord approval for issuance of
        notice u/s 148 in this case for the assessment year 2005-06."


3.      The learned counsel for the petitioner submits that this is a case

where the conditions stipulated in the proviso to section 147 of the said

Act would have to be satisfied because the notice has been issued after a

period of four years from the end of the relevant assessment year. He

further submitted that the conditions stipulated in the proviso are not

satisfied and, therefore, the said notice is bad in law.


4.      The learned counsel for the respondent/ revenue sought to support

the issuance of the notice under section 148 of the said Act on the ground

that it was a case of escapement of income as indicated in the notice

itself. He also sought to rely on Explanation 2 in section 147 of the said

Act.



5.      We have considered the arguments advanced by the counsel for

parties and we agree with the submission made by the learned counsel for




W.P.(C)7087/2012                                                  Page 3 of 5
the appellant that the said notice is bad in law as the same has been issued

beyond a period of four years from the end of the relevant assessment

year without satisfying the condition precedent therefor. The proviso to

section 147 of the said Act imposes an injunction on the revenue

authorities prohibiting them from taking any action beyond the said

period of four years unless (i) any income chargeable to tax has escaped

assessment for such assessment year, (ii) by reason of the failure on the

part of the assessee (a) to file a return under section 139 of the said Act or

in response to a notice issued under sub-section (1) or section 147 or

section 148 of the said Act or (b) to disclose fully or truly all material

facts necessary for the assessment for that assessment year. In this matter

it is not the case of the revenue that the assessee had failed to file the

return under any of the provisions. Therefore, the only way in which the

notice under section 148 of the said Act beyond the period of four years,

could be justified would be if there was failure on the part of the assessee

to disclose fully and truly all material facts necessary for his assessment.

It is not sufficient that the income chargeable to tax has escaped

assessment but it must further be shown that this has escaped as a result




W.P.(C)7087/2012                                                   Page 4 of 5
of failure on the part of assessee to disclose fully and truly all material

facts necessary for his assessment.


6.      In the present case, the impugned reasons behind the notice dated

28.03.2012, which we have extracted above, does not even carry a

whisper that there has been a failure on the part of the assessee to fully

and truly disclose all material facts necessary for the assessment. Even

the order rejecting the objections does not indicate as to what material

fact has not been disclosed by the assessee.


7.      In these circumstances the impugned notice dated 28.03.2012

cannot be sustained in law.      The same is set aside and so, too, all

proceedings pursuant thereto. The writ petition is allowed as above.

There shall be no order as to costs.



                                          BADAR DURREZ AHMED, J



                                                        R.V.EASWAR, J
JANUARY 24, 2013
hs




W.P.(C)7087/2012                                                 Page 5 of 5
 
 
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