KAMLESH KUMAR JHABAK vs. COMMISSIONER OF INCOME TAX RAIPUR

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WPT/153/2019HC ChhattisgarhCGHC01043540201916 December 2019Author: HON'BLE SHRI JUSTICE P. SAM KOSHY4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the revenue had passed a final assessment order on 17.12.2019, during the pendency of the writ petition. The Court observed that the challenge in the writ petition was limited to the notice under Section 148 and the rejection of objections. Given the subsequent development of the final assessment order being passed, the Court found that the present writ petition had become infructuous. The Court reasoned that allowing the writ petition would not automatically quash the subsequent final assessment order dated 17.12.2019, as that order would need to be challenged separately. Therefore, the issues raised in the writ petition were deemed to be of academic interest and were left open to be considered in an appropriate case or agitated by the petitioner while challenging the final assessment order. The writ petition was dismissed as having become infructuous.

What were the facts?

The petitioner, Kamlesh Kumar Jhabak, challenged the reopening of his assessment for the assessment year 2013-14 under Section 147 of the Income Tax Act, 1961. He also challenged the notice issued under Section 148 and the order dated 18.11.2019 rejecting his objections. The petitioner contended that the reassessment proceedings were barred by limitation and lacked cogent material. He argued that there was no material suppression of facts by him and that the department had not collected any fresh material to justify reassessment. He specifically invoked the first proviso to Section 147, asserting that the conditions for reopening beyond four years were not met. The revenue, however, submitted that a final assessment order was passed on 17.12.2019, rendering the writ petition infructuous.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, for the assessment year 2013-14 are barred by limitation and lack sufficient material to justify reopening, as contended by the petitioner? 2. Whether the rejection of the petitioner's objections by the Assistant Commissioner of Income Tax was legally sustainable, given the petitioner's arguments regarding lack of material suppression and absence of fresh grounds for reassessment? Assessee's Contentions: The petitioner argued that the reassessment proceedings were initiated without cogent, strong, or tangible material. He asserted that there was no material suppression of fact on his part and that the department had not gathered any fresh information post-initial assessment to warrant reassessment. He further contended that the conditions for reopening an assessment beyond four years, as stipulated in the first proviso to Section 147, were not met, making the proceedings arbitrary and bad in law. The petitioner relied on judgments from the Delhi High Court in Haryana Acrylic Manufacturing Company Vs. The Commissioner of Income Tax IV and Ors., the Gujarat High Court in Shree Chalthan Vibhag Khand Vs. Deputy Commissioner of Income-Tax, and the Bombay High Court in Hindustan Level Ltd. Vs. R. B. Wadkar. Revenue's Contentions: The revenue submitted that a final assessment order had been passed on 17.12.2019, during the pendency of the writ petition, which concluded the reassessment proceedings. They argued that since the final assessment order was appealable, the present writ petition should be dismissed as infructuous.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

-1- NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 153 of 2019 Kamlesh Kumar Jhabak, S/o Late Shri Motilal Jhabak aged about 63 years, resident of M/s Allied Traders, Jhabak Bada, Kamasipara, Raipur, Chhattisgarh. Versus

1.

Commissioner of Income Tax Raipur, Aaykar Bhavan, Civil Lines, Raipur, C.G.

2.

Assistant Commissioner of Income Tax [ACIT]4(1), Central Revenue Building, Civil Lines, Raipur.

3.

Income Tax Officer, Ward 4(3), Central Revenue Building, Civil Lines, Raipur. For Petitioner : Mr. Neelabh Dubey, Advocate For Respondent/s : Ms. Naushina Afrin Ali with Mr. Amit Choudhary & Mr. Ajay Kumarni, Advocates. Hon'ble Shri Justice P. Sam Koshy Order on Board 17/12/2019

1.

Being aggrieved by the decision of the Assistant Commissioner of Income Tax (in short 'ACIT') dated 18.11.2019 rejecting the objections filed by the petitioner in respect of reopening of the assessment of tax made for the assessment year 2013-14 under Section 147 of the Income Tax Act. The petitioner has also challenged the notice issued by the respondents under Section 148 of the Act dated 31.03.2019. 2. According to the petitioner, the proceedings initiated by the respondents is one which is totally barred by limitation and that there

-2- -3-

5.

The Gujrat High Court in the case of Shree Chalthan Vibhag Khand Vs. Deputy Commissioner of Income-Tax, [2015] 376 ITR 419 (Guj) and the order passed by the Bombay High Court in the -4- present writ petition becomes only an academic interest as allowing of the writ petition also would not lead to the automatic quashment of the subsequent final order of assessment dated 17.12.2019, unless the same is also questioned in a separate independent proceeding before an appropriate forum.

9.

In view of the same, this Court is of the opinion that the present writ petition has become infructuous leaving open the issues raised in the present writ petition to be considered in an appropriate case and also leaving open these grounds to be agitated by the petitioner while challenging the order of assessment itself. Accordingly, the writ petition stands dismissed as having become infructuous. (P. Sam Koshy) Judge Rohit

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