SURINDER GUPTA vs. COMMISSIONER OF INCOME TAX & ANR

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CWP/25211/2015HC Punjab & HaryanaPHHC01089828201528 January 2020Author: MR. JUSTICE AJAY TEWARI,MR. JUSTICE AVNEESH JHINGAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the facts of the present case were identical to the case of Jagan Nath Singhal (supra). In Jagan Nath Singhal, the Court had held that an affidavit from the daughter of the petitioner formed a reasonable ground for the Assessing Officer to entertain a prima facie reason to believe about the escapement of income, and thus the proceedings were not initiated without jurisdiction. The Court in Jagan Nath Singhal had clarified that it was only examining the validity of the proceedings at the initiation stage and not the merits of the case. The assessee was permitted to lead evidence in reassessment proceedings to prove the actual expenditure. Applying this precedent, the High Court dismissed the writ petition, finding no jurisdictional defect in the initiation of reassessment proceedings. The Court did not go into the merits of the assessee's case.

What were the facts?

The petitioner, Sh. Surinder Gupta, filed a writ petition challenging a notice dated March 19, 2015, issued under Sections 147 and 148 of the Income Tax Act, 1961, for reassessment of his income for the assessment year 2008-2009, and an impugned order dated November 2, 2015. The reassessment proceedings were initiated based on a complaint made by the petitioner himself, wherein he stated that he had incurred expenses of Rs. 50 lakhs on a marriage and gifted 120 tolas of gold to his daughter-in-law's family. The petitioner contended that this constituted a fishing and roving inquiry.

What were the issues?

1. Whether the issuance of notice under Section 147/148 of the Income Tax Act, 1961, for reassessment of income for assessment year 2008-2009, based on the petitioner's own complaint regarding marriage expenses and gold gift, constitutes a fishing and roving inquiry, thereby being without jurisdiction. Assessee's Contention: The reassessment proceedings initiated on the basis of the petitioner's own disclosure of expenses and gifts amounts to a fishing and roving inquiry and is therefore without jurisdiction. Revenue's Contention: The revenue relied on the decision in Jagan Nath Singhal Vs. Deputy Commissioner of Income-Tax and another, 242 ITR 554 (P&H), which held that a complaint made by a person regarding dowry and expenses could form a reasonable basis for the Assessing Officer to believe that income had escaped assessment. The revenue also relied on the Supreme Court's decision in Calcutta Discount Co. Ltd. Vs. ITO (1961) 41 ITR 191 (SC).

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

CWP-25211-2015 1 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP-25211-2015 Date of Decision: 28.01.2019 SH.SURINDER GUPTA. ....Petitioner. Versus COMMISSIONER OF INCOME TAX, CHANDIGARH AND ANOTHER .....Respondents CORAM: HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE AVNEESH JHINGAN ***** Present: Mr.Alok Mittal, Advocate for the petitioner. Mr.Yogesh Putney, Advocate for the respondents. AJAY TEWARI, J.(ORAL)

1.

By this petition, the petitioner has challenged the issuance of notice dated 19.03.2015 under Section 147 and 148 of the Income Tax Act, 1961 (for short the Act) for the purpose of re-assess the income for the assessment year 2008-2009 and impugned order dated 02.11.2015. 2. The issue came up because of the complaint made by the petitioner himself in which he claimed that he had incurred expenses of Rs.50 lakhs on the marriage and had given 120 tolas of gold to the family of his daughter-in-law.

3.

The challenge is that on the basis of this the re-opening of assessment is a fishing and roving inquiry. Learned counsel for the revenue has relied upon the decision of this Court in “Jagan Nath Singhal Vs. Deputy Commissioner of Income-Tax and another, 242 ITR 554 of P&H” wherein also a person had filed a complaint against his son-in-law in which he had stated that he had given certain amount as dowry and incurred RAMAN KUMAR 2020.02.04 10:49 I attest to the accuracy and integrity of this document

CWP-25211-2015 2 had held in Jagan Nath (supra) as under:- “Applying the aforesaid tests to the present case, we have no hesitation in holding that the affidavit of the daughter of the petitioner formed a reasonable ground for the Assessing Officer to entertain a prima facie reason to believe about the escapement of income. It cannot, therefore, be held that the proceedings had been initiated without jurisdiction. We may, however, clarify that we have merely examined the validity of the proceedings at the initiation stage only and have not gone into the merits of the case of the assessee. The assessee would be free to lead evidence in the reassessment proceedings to show that the expenditure incurred by him on the marriage of his daughter was not Rs.7 to 8 lakhs but was Rs.70 to 80 thousand as alleged by him and, therefore, no income had escaped assessment. With the above observations, the writ petition stands dismissed.”

4.

The fact of the present case are identical. In the circumstances, the petition stands dismissed.

5.

Since the main case has been decided, the pending application, if any, also stands disposed of.

28.01.

2020 [AJAY TEWARI] Raman

JUDGE [AVNEESH JHINGAN] JUDGE Whether speaking/reasoned Yes/No Whether reportable

Yes/No RAMAN KUMAR 2020.02.04 10:49 I attest to the accuracy and integrity of this document

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