PARIKH BHANJI VANMALIDAS & SONS vs. DY.COMMISSIONER OF INCOME TAX

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SCA/12655/2000HC GujaratGJHC24020315200009 April 2001Author: HONOURABLE MR. JUSTICE B.C.PATEL,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
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What did the High Court hold?

The High Court allowed the application and quashed the notice issued under Section 148 of the Income Tax Act. The Court found it difficult to conclude that there was any failure on the part of the assessee in disclosing fully and truly all material facts during the original assessment. The reasoning was based on a perusal of the reassessment reasons and the material placed before the court, which did not indicate any omission or suppression by the assessee that would warrant reassessment. The ratio decidendi is that a notice for reassessment under Section 148 cannot be sustained if the assessee has demonstrated full and true disclosure of material facts during the original assessment proceedings, and there is no material to suggest otherwise.

What were the facts?

During a search under Section 132 of the Income Tax Act in September 1988, silver ornaments and gun metal were found, with a deficit of 84.005 Kgs of silver ornaments. A partner of the assessee firm, Parikh Bhanji Vanmalidas & Sons, made a disclosure of Rs. 4,30,000/- as unaccounted income under Section 132(4). This disclosure was reflected in the assessment order passed under Section 143(3) on March 16, 1992. Subsequently, on March 30, 2000, a notice under Section 148 was issued for reassessment. The assessee challenged this notice.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act for reassessment is valid, considering the facts and circumstances, including the prior assessment under Section 143(3) and the disclosure made under Section 132(4). Assessee's Contention: The assessee contended that there was no failure on their part to disclose fully and truly all material facts during the original assessment proceedings. Therefore, the issuance of a notice for reassessment under Section 148 was not justified. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding the validity of the Section 148 notice. The court's decision appears to be based on its own assessment of the material placed before it.

Which sections of the Income-tax Act were involved?

Section 132,Section 132(4),Section 143(3),Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

SPECIAL CIVIL APPLICATION No 12655 of 2000

For Approval and Signature:

Hon'ble MR.JUSTICE B.C.PATEL and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO

3.

Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO

PARIKH BHANJI VANMALIDAS & SONS Versus DY.COMMISSIONER OF INCOME TAX Appearance: MR SN SOPARKAR for Petitioner MR MANISH R BHATT for Respondent

CORAM : MR.JUSTICE B.C.PATEL and MR.JUSTICE D.A.MEHTA

Date of decision: 09/04/2001

ORAL JUDGEMENT (Per : MR.JUSTICE B.C.PATEL)

Rule. Mr. M.R. Bhatt waives service of rule. At the request of learned advocates appearing for the parties, we have heard the matter today for final disposal.

#. It appears that search proceeding was taken under section 132 of the Income Tax Act in the month of September, 1988. Silver ornaments and gun metal were found. There was deficit of silver ornaments to the tune of 84.005 Kgs. Statement under section 132 (4) of the Income Tax Act was recorded of one Shri Pravinbhai Parekh, a partner of the assessee firm who disclosed that in the return of income, amount of Rs. 4,30,000/- will be declared as unaccounted income. In the assessment order, page 18 of the paper book, same is reflected, in the addition by way of disclosure under section 132(4) of the Income Tax Act and ultimately taking into consideration this income, the assessee was assessed under section 143(3) of the Income Tax Act on 16.3.92, against which an appeal was also preferred.

#. On 30th March, 2000, notice under section 148 of the Income Tax Act was issued for reassessment. We have perused the reasons recorded for reassessment. Considering the assessment order and the material placed before us, it is difficult to say that there was any failure on the part of the assessee in the disclosing fully and truly all material facts. In this view of the matter, we allow this application and quash and set aside the notice at Annexure : A. Rule is made absolute accordingly. No order as to costs.

[B.C. PATEL, J.] [D.A. MEHTA, J.] * pirzada/-

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