IBRAHIM ASGHERALI SOMJI THR HIS ATTORNEY NEELESH KHAMDELWAL vs. THE INCOME TAX OFFICER WARD 4 PUNE

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WP/3778/2022HC BombayHCBM01009146202211 March 2024Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. The Court noted that the counsel for both parties agreed that the findings in Writ Petition No. 3780 of 2022 would squarely apply to the present case. Although the assessment order in this case did not specifically discuss the capital loss issue as it did in the related petition, a specific query was raised during the assessment proceedings and answered by the petitioner. Citing the Court's own precedent in Aroni Commercials Limited v. Deputy Commissioner of Income Tax–2(1), the Court held that if a specific query was raised and answered during assessment, it would be a subject of consideration during those proceedings. Therefore, a notice to reopen based on such matters would be considered a change of opinion. The Court quashed the notice under Section 148 and the order on objections, finding them to be without jurisdiction, illegal, and arbitrary. The petition was disposed of in terms of prayer clause (a).

What were the facts?

The petitioner, Ibrahim Asgherali Somji, challenged a notice under Section 148 of the Income Tax Act, 1961, dated March 31, 2021, and an order on objections dated January 17, 2022, pertaining to Assessment Year 2015-16. The petitioner argued that the notice to reopen the assessment was based on a change of opinion by the Assessing Officer. This contention was supported by the petitioner's counsel, who stated that the findings in a related case, Writ Petition No. 3780 of 2022, would apply. The revenue was represented by Mr. Suresh Kumar. The assessment order itself did not specifically discuss the capital loss issue, unlike in the related case, but a specific query had been raised during assessment proceedings and answered by the petitioner.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2015-16 is valid, or if it is based on a change of opinion by the Assessing Officer, rendering it without jurisdiction, illegal, and arbitrary. Assessee's Contention: The notice to reopen the assessment is based on a change of opinion. This is supported by the Court's decision in Aroni Commercials Limited v. Deputy Commissioner of Income Tax–2(1), which held that issues raised and answered during assessment proceedings cannot form the basis for reopening. The petitioner's counsel stated that the findings in Writ Petition No. 3780 of 2022 would apply to this case. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

1/2 446-aswp-3778-2022.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.3778 OF 2022 Ibrahim Asgherali Somji …Petitioner Versus The Income Tax Officer (International Taxation), Ward-4, Pune & Anr. …Respondents Mr. Mihir Naniwadekar, with Mr. Rohan Deshpande, i/b. Ms. Farzeen Khambatta, for Petitioner. Mr. Suresh Kumar, for Respondents-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 12th March 2024 PC:- 1. Counsel state that our findings in Writ Petition No.3780 of 2022 will squarely apply to the facts and circumstances of the case even though in this case the assessment order does not specifically discuss the capital loss issue as it was discussed in the case of Petitioner in Writ Petition No. 3780 of 2022. Counsel state that this was because specific query was raised during the assessment proceedings which have been answered and as held by this Court in Aroni Commercials Limited v. Deputy Commissioner of Income Tax– 2(1),1 it will be a subject of consideration during the assessment proceedings and, hence, the notice to reopen issued in this case is based on change of opinion. 1 (2014) 44 taxmann.com 304 (Bombay). Gaikwad RD 2024:BHC-AS:12455-DB

2/2 446-aswp-3778-2022.doc 2. Therefore, this Petition is also allowed in terms of prayer clause (a), which reads as under: “(a) Issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction under Article 226 of the Constitution of India, quashing the Impugned Notice u/s 148 of the Act dated 31st March 2021 (Exhibit A) and the Impugned Order on objections dated 17th January 2022 (Exhibit C) and the impugned reassessment proceedings for AY 2015-16 as being wholly without jurisdiction, illegal and arbitrary;” 3. Petition disposed. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Gaikwad RD Signed by: Raju D. Gaikwad Designation: PS To Honourable Judge Date: 14/03/2024 21:36:22

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