ABHIJEET ANILKUMAR GAIKWAD vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1 AND ORS

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WP/6410/2022HC BombayHCBM01011753202220 June 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned order dated 22/02/2022 was required to be quashed and set aside on the ground that no personal hearing was granted to the petitioner. The Court also found merit in the petitioner's contention of non-application of mind, noting that the respondents did not deny the allegations of factual inaccuracies in the impugned order. Consequently, the Court quashed and set aside the impugned order. Without making any observations on the merits of the matter, the case was remanded to the Jurisdictional Assessing Officer (JAO). The JAO is directed to dispose of the petitioner's objections within four weeks of receiving supplementary objections, which the petitioner is to file within two weeks. The JAO must pass a reasoned order addressing all objections, grant a personal hearing at least five working days after providing notice, and provide a list of judgments intended to be relied upon along with the hearing notice. The petitioner is to file written submissions within three days of the personal hearing.

What were the facts?

The petitioner, Abhijeet Anilkumar Gaikwad, is aggrieved by a notice dated 31/03/2021 issued under Section 148 of the Income Tax Act, 1961, and an order dated 22/02/2022 rejecting his objections. The petitioner contends that no personal hearing was granted before the impugned order and that the order was passed without application of mind. Specifically, the petitioner points out factual inaccuracies in the impugned order regarding cash deposits and gross receipts, which were not denied by the respondents. The respondents, represented by the Assistant Commissioner of Income Tax and others, did not offer comments on certain contentions pertaining to the National E-Assessment Centre.

What were the issues?

1. Whether the impugned order dated 22/02/2022, rejecting the petitioner's objections to a notice under Section 148, is liable to be quashed and set aside on the ground that no personal hearing was granted to the petitioner, as required by principles of natural justice. 2. Whether the impugned order dated 22/02/2022 is liable to be quashed and set aside due to a non-application of mind by the authority passing the order, evidenced by factual inaccuracies and misstatements concerning the petitioner's income and deposits, as averred in the petition. Assessee's Contentions: - No personal hearing was granted before the impugned order was passed. - The order was passed mechanically without considering the petitioner's contentions, conducting further enquiry, and contained incorrect facts. - Specific inaccuracies were highlighted regarding the amount of cash deposits and gross receipts, which were not denied by the respondents. Revenue's Contentions: - The respondents did not offer comments on contentions pertaining to the National E-Assessment Centre, Delhi.

Which sections of the Income-tax Act were involved?

Section 148,Section 151

AI-generated summary — verify with the full judgment below

908.

WP 6410.22.docx IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 6410 OF 2022 WITH WRIT PETITION NO. 3410 OF 2022 WITH WRIT PETITION NO. 6411 OF 2022 WITH WRIT PETITION NO. 3428 OF 2022 Abhijeet Anilkumar Gaikwad ….. Petitioner Vs. Assistant Commissioner of Income Tax-Circle 1 and ors. ….. Respondents Mr.Dharan Gandhi, for Petitioner. Mr. Ajeet Manwani a/w Ms. Samiksha Kanani, for Respondents. CORAM: K.R.SHRIRAM, J & FIRDOSH P. POONIWALLA, J. DATED : JUNE 20, 2023 P.C. WRIT PETITION NO. 6410 OF 2022 1. The petitioner is aggrieved by notice dated 31/03/2021 issued under Section 148 of the Income Tax Act, 1961 (‘the Act’) and the order dated 22/02/2022 rejecting petitioner’s objections. 2. Though various grounds have been raised, two grounds that Mr. Gandhi highlighted at the outset are: (a) no personal hearing was granted before the impugned order dated 22/02/2022 was passed and (b) there has been non-application of mind while passing the order dated 22/02/2022. Mr. Gandhi of course also adds that the application for sanction and the approval under Section 151 of the Act has been made available Urmila Ingale 1/4

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WP 6410.22.docx despite called for only in the affidavit-in-reply. 3. The fact that no personal hearing was given is not disputed. 4. On the ground of non-application of mind, it was submitted, as averred in the petition, that respondent no.4 has passed the impugned order in a mechanical way without considering the contentions raised by petitioner, without conducting any further enquiry and by stating incorrect facts. 5. Mr. Gandhi submitted that in paragraph 4 of the impugned order, it has been stated “From the perusal of ITR, it is not established that the gross receipts of the assessee are in Cash”, but this allegation has not been raised in the reasons recorded for reopening. Mr. Gandhi also submitted that in the same paragraph 4 of the impugned order, it is stated “Hence, the source of cash deposits amounting to Rs.85,94,597/- and Rs.6,00,000/- against insurance premium to HDFC Life Insurance Company through demand draft cannot be presumed to include the amount of gross receipts of the assessee.” This finding is incorrect inasmuch as the reasons recorded itself indicate that cash deposit in the account is only Rs.3,94,600/- and non-cash is Rs.81,99,997/-. Mr. Gandhi further submitted that in paragraphs 5 and 6 of the impugned order also there are incorrect findings. These allegations which are made in ground (J) to the petition Urmila Ingale 2/4

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WP 6410.22.docx have not been denied by respondents. In the affidavit-in-reply filed through Abdhesh Kumar Jha affirmed on 13/04/2022, respondents state “it is respectfully submitted that the contentions of the assessee in this ground are pertaining to National E-Assessment Centre, Delhi i.e. Respondent No. 4. Hence, no comments are being offered.” 6. Therefore, on this ground alone, the impugned order dated 22/02/2022 is required to be quashed and set aside, which we hereby do. 7. At the same time, without making any observations on merits of the matter and keeping open all rights and contentions of petitioner, the matter be remanded to the Jurisdictional Assessing Officer (JAO) who shall dispose petitioner’s objections within 4 weeks of receiving supplementary objections from petitioner, which Mr. Gandhi undertakes will be filed within 2 weeks from today. 8. The order to be passed shall be a reasoned order dealing with every objection of petitioner and before passing any such order, a personal hearing shall be granted to petitioner, notice whereof shall be communicated atleast 5 working days in advance. 9. If JAO is going to rely on any judgment, a list thereof shall Urmila Ingale 3/4

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WP 6410.22.docx be provided to petitioner along with the notice for personal hearing so that petitioner will be able to deal with/distinguish the same during the personal hearing. 10. If petitioner wishes to file written submissions stating what transpired during the personal hearing, the same to be filed within 3 days from the personal hearing. 11. Petition disposed. 12. Petitioner’s statement that petitioner shall co-operate and will not seek any adjournment unless the notice is not given in accordance with our directions above is accepted. WRIT PETITION NO. 3410 OF 2022 WITH WRIT PETITION NO. 6411 OF 2022 WITH WRIT PETITION NO. 3428 OF 2022 13. Mr. Gandhi states that identical grounds in Writ Petition No. 6410 of 2022 have been raised in these three petitions as well which Mr. Manwani does not dispute. 14. Therefore, the impugned orders in these three petitions, being order dated 22/02/2022, are quashed and set aside. 15. The directions given above in paragraphs 7 to 10 shall also apply to these petitions. (FIRDOSH P. POONIWALLA, J) (K.R.SHRIRAM, J) Urmila Ingale 4/4

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