MANOJ BALKRUSHNA SHELAR vs. INCOME TAX OFFICER WARD 1(1) AND ORS

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WP/9281/2023HC BombayHCBM01027112202331 July 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Assessment Officer (AO) had not dealt with any of the petitioner's submissions. The petitioner had categorically denied purchasing the properties identified by the AO, suggested potential misuse of their PAN, and provided details of another property purchased with a home loan. The court found that the AO's order did not address these points. Furthermore, the petitioner's request for a personal hearing was not granted. Consequently, the impugned order dated May 13, 2023, was quashed and set aside. The matter was remanded to the respondents for fresh consideration. Before proceeding, the respondent-authority was directed to provide the petitioner with details and documentary evidence available with the Income Tax Department, as referred to in paragraph 5 of the Annexure to the notice dated April 5, 2022, issued under Section 142(1). Upon receiving these details, the petitioner would have two weeks to respond. Subsequently, a personal hearing notice, at least five working days in advance, must be given before any order is passed. Any order passed must be a reasoned order dealing with all of the petitioner's submissions.

What were the facts?

The petitioner, Manoj Balkrushna Shelar, is challenging an order dated May 13, 2023, passed under Section 147 read with Sections 144A(d) and 144B of the Income Tax Act, 1961. The Assessment Officer (AO) alleged escapement of income due to the purchase of two immovable properties worth Rs. 42,56,640/- and Rs. 2,41,91,136/- in Financial Year 2014-15, which were not reflected in the petitioner's returns. The petitioner denied purchasing these properties, suggesting potential PAN misuse, and instead highlighted the purchase of another property for approximately Rs. 35 lakhs with a home loan from DNS Bank, reflected in CIBIL records. The petitioner offered to provide documentation for this property and requested an investigation into PAN misuse. The petitioner also requested a personal hearing, which was not granted.

What were the issues?

1. Whether the Assessment Officer (AO) properly considered the petitioner's reply and submissions when passing the impugned order under Section 147 read with Sections 144A(d) and 144B of the Income Tax Act, 1961? Assessee's Contention: The petitioner argued that despite a reference to the reply filed, the AO failed to consider or deal with the petitioner's submissions. Specifically, the petitioner denied purchasing the properties in question, suggested PAN misuse, and provided details of another property purchased with a home loan. The petitioner also contended that a personal hearing, requested in the reply, was not granted. Revenue's Contention: The judgment does not record specific arguments from the revenue's side regarding the merits of the petitioner's submissions or the AO's consideration thereof. However, the revenue sought to file an affidavit in reply.

Which sections of the Income-tax Act were involved?

Section 147,Section 144A,Section 144B,Section 142(1)

AI-generated summary — verify with the full judgment below

411 wp9281-23.docx IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.9281 OF 2023 Manoj Balkrushna Shelar ….. Petitioner Vs. Income Tax Officer Ward 1(1) and Ors. ….. Respondents Mr.Shrivallabh Panchpor i/b Ms.Pratibha Gavhane for petitioner Mr.Ajeet Manwani a/w Ms.Samiksha Kanani for respondents CORAM: K.R. SHRIRAM, J & FIRDOSH P. POONIWALLA, J. DATED : 31st JULY 2023 P.C. 1. Petitioner is impugning order dated 13th May 2023 passed under Section 147 read with Sections 144A(d) and 144B of the Income Tax Act, 1961 (“the said Act”) on various grounds. 2. Mr.Panchpor submitted that though in the impugned order there is a reference to the reply filed by petitioner to the notice issued, the Assessment Officer (AO) has not considered the reply or dealt with the submissions of petitioner. 3. Mr.Panchpor submitted that the notice issued was alleging that petitioner has purchased two immovable properties of Rs.42,56,640/- and Mohite 1/3 TRUSHA TUSHAR MOHITE Digitally signed by TRUSHA TUSHAR MOHITE Date: 2023.08.05 14:30:05 +0530

411 wp9281-23.docx Rs.2,41,91,136/- in Financial Year 2014-15 but not considered in the I.T. returns for Financial Year 2014-15 and therefore, there has been an escapement of income. Petitioner has replied to the notice stating that both the properties mentioned in the notice were not purchased by Petitioner and therefore, those properties could not have been tagged to petitioner’s PAN. Petitioner also added that Petitioner had purchased another property of about Rs.35 lakhs by taking a home loan having registration date 21st January 2015 and the home loan was granted by DNS Bank which is also reflected in petitioner’s CIBIL record. Petitioner also offered to provide Index 2 of the said property. Petitioner had categorically denied having purchased any property worth Rs.42,56,640/- and Rs.2,41,91,136/-. Petitioner requested AO to investigate if somebody has misused petitioner’s PAN Number. Having considered the impugned order with the assistance of Mr.Panchpor and Mr.Manwani, we find that the AO has not dealt with any of the submissions of petitioner. 4. Another point raised by Mr.Panchpor is in the reply dated 14th August 2022, petitioner had also requested for a personal hearing to justify along with documentary evidence. No personal hearing was also granted. 5. In our view, therefore, we need not grant the request of Mr.Manwani to file affidavit in reply. 6. The impugned order dated 13th May 2023 is quashed and set aside. Matter is remanded to respondents for denovo consideration. Mohite 2/3

411 wp9281-23.docx 7 Before Respondents proceed further in the matter, respondent no.1 shall provide details and documentary evidence as per the information according to respondents that were available with the I.T.Department referred to in paragraph 5 of the Annexure to Notice dated 5th April 2022 issued under Section 142(1) of the Act. If and only when these details are provided, petitioner shall respond within two weeks of receiving the same. Thereafter, further proceedings can be taken but before any order is passed, petitioner shall be given a personal hearing notice whereof shall be communicated atleast 5 working days in advance. 8. Order to be passed shall be a reasoned order dealing with all submissions of petitioner. 9. Petition disposed. (FIRDOSH P.POONIWALLA, J.) (K.R. SHRIRAM, J.) Mohite 3/3

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