2018 (12) TMI 1775 - HC - Income Tax

Reopening of assessment u/s 147 - case reopened on the basis of facts disclosed by the petitioner in wealth tax return - HELD THAT - As pointed out that the petitioner has drawn the attention of the Assessing Officer to all these facts in the objections raised against the reopening to the effect that the property being stock-in-trade is reflected in the books of accounts of the petitioner's proprietary concern C.R. Patil Sankul in respect of which the petitioner is maintaining separate books of accounts. As pointed out that in this case the impugned notice is issued on 31.3.2018; vide letter dated 9.4.2018 the petitioner had called upon the respondent Assessing Officer to furnish a copy of the reasons recorded for reopening the assessment, however, such reasons came to be furnished only on 14.9.2018, and hence, there was some delay in raising the objections. Assessing Officer is, therefore, not disposing of the objections on the ground of delay and is proceeding further with the assessment. Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 11th February, 2019. By way of ad-interim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not pass the final order without the permission of this court. Direct service is permitted.

Summary

Issues involved: Reopening of assessment based on undisclosed investment in property under section 68 of the Income Tax Act, delay in furnishing reasons for reopening, objections raised by the petitioner against the reassessment.

Analysis:

The judgment by the High Court of Gujarat involves the petitioner challenging the reopening of assessment by the Assessing Officer based on undisclosed investment in property under section 68 of the Income Tax Act, 1961. The petitioner had disclosed the investment in the wealth tax return, but the Assessing Officer contended that the property was not booked in the personal books, although it was reflected in the balance sheet of "C.R. Patil Sankul," a proprietary concern of the petitioner. The petitioner raised objections against the reassessment, highlighting that the property was stock-in-trade reflected in the books of accounts of the proprietary concern. The petitioner also pointed out a delay in receiving the reasons for reopening, leading to objections being raised after a significant period.

The learned advocate for the petitioner argued before the court, emphasizing the discrepancies in the assessment and the objections raised against the reassessment. The court, after considering the submissions, issued a notice returnable on 11th February, 2019. As an ad-interim relief, the respondent was permitted to proceed further pursuant to the impugned notice, with the condition that the final order should not be passed without the permission of the court. Direct service was also permitted in this regard.

In conclusion, the High Court of Gujarat addressed the issues raised by the petitioner regarding the reopening of assessment based on undisclosed investment in property, the delay in furnishing reasons for reassessment, and the objections raised against the reassessment. The court provided interim relief to the respondent while issuing a notice returnable on a specified date, allowing further proceedings subject to court permission for passing the final order.