MUSHTAQUE AHMED TAJAMMUL HUSAIN RIZVI vs. INCOME TAX OFFICER , WARD-1, MALEGAON AND ORS

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WP/2112/2022HC BombayHCBM01041953202128 February 2022Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE N. J. JAMADAR2 pages
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What did the High Court hold?

The High Court held that the notice dated March 29, 2021, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-2017, was based on a change of opinion, which is not permissible. The Court noted that in the assessment order dated November 30, 2018, the Assessing Officer had explicitly stated that the assessee had explained the sources of the cash deposit of Rs. 78,00,000/-. Therefore, reopening the assessment on the same grounds without any new material amounted to a review of the previous order, which is impermissible. The Court allowed the petition, quashing and setting aside the impugned notice and the entire reopening proceedings under Section 147 of the Act. Consequently, the order rejecting the petitioner's objection, dated August 12, 2021, was also quashed and set aside.

What were the facts?

The petitioner, Mushtaque Ahmed Tajammul Hussain Rizvi, is challenging a notice dated March 29, 2021, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-2017. The notice was issued within four years of the relevant assessment year. The reasons for reopening, provided on June 15, 2021, stated that the petitioner had made a cash deposit of Rs. 78,00,000/- during the Financial Year 2015-2016. The petitioner had previously explained this deposit as being set aside for his daughter's medical college admission, family medical treatment, and his mother's and brother's Haj Yatra. The reopening notice alleged that the petitioner had not provided the necessary corroborating details. However, the assessment order dated November 30, 2018, had already discussed this cash deposit and noted that the assessee had explained its sources.

What were the issues?

1. Whether the notice dated March 29, 2021, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-2017, is valid and based on tangible material, or if it is based on a change of opinion, thereby rendering it illegal and void ab initio. Assessee's Contention: The petitioner argued that the notice for reopening was based on a mere change of opinion by the Assessing Officer, which is impermissible. The original assessment order had already addressed and accepted the explanation for the cash deposit of Rs. 78,00,000/-, making the subsequent attempt to reopen the assessment based on the same issue invalid. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the reasons recorded for reopening suggest the revenue's belief that the petitioner had not provided sufficient details to corroborate his explanation for the cash deposit.

Which sections of the Income-tax Act were involved?

Section 148,Section 147

AI-generated summary — verify with the full judgment below

1/2 905-wp-2112-22.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2112 OF 2022 Mushtaque Ahmed Tajammul Hussain Rizvi ….Petitioner V/s. Income Tax Officer, Ward-1, Malegaon, & ors. …Respondents ---- Mr. Dinesh Ramesh Gulabani for Petitioner Mr. Suresh Kumar for Respondents ---- CORAM : K.R. SHRIRAM & N.J. JAMADAR, JJ

DATED : 28th FEBRUARY 2022 P.C. : 1 Petitioner is impugning a notice dated 29th March 2021 issued under Section 148 of the Income Tax Act, 1961 (the Act) for A.Y.-2016-2017. Since the notice issued is within 4 years, we have to only see whether reasons recorded shows any tangible material for reopening. The reasons recorded, which has been provided to petitioner vide letter dated 15th June 2021 indicates that the basis for reopening is petitioner had made cash deposit to the extent of Rs.78,00,000/- during F.Y.-2015-2016 relevant to A.Y.-2016-2017 and during the assessment proceedings, petitioner had stated that he will submit certain details to corroborate his statement that this amount was kept aside for his daughter’s admission in medical college, medical treatment of his family and for the purpose of Haj Yatra of his mother and brother. According to the officer proposing to reopen, petitioner has not provided the details. Meera Jadhav MEERA MAHESH JADHAV Digitally signed by MEERA MAHESH JADHAV Date: 2022.03.01 11:09:31 +0530

2/2 905-wp-2112-22.doc 2 In our view, this reason is only due to change of opinion, which is not permissible. We say this because in the assessment order dated 30th November 2018, this cash deposit of Rs.78 lacs has been discussed and the Assessing Officer categorically stated “During assessment proceedings, the assessee has explained the sources of the cash of Rs.78,00,000/- deposited in his saving bank account running with ICICI Bank.” 3 In the circumstances, we allow the petition in terms of prayer clause (a), which reads as under: “(a) That this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate writ order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside the said impugned notice dated 29/03/2021 issued u/s 148 which is illegal and void ab initio and quash the entire reopening proceedings u/s 147 of the Act.” 4 Since the notice itself has been quashed and set aside, the order rejecting the objection passed on 12th August 2021 also stand quashed and set aside. 5 Petition accordingly stands disposed. (N. J. JAMADAR, J.) (K.R. SHRIRAM, J.) Meera Jadhav

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