2017 (9) TMI 1409 - HC - Income Tax

Reopening of assessment - as the partnership firm having been dissolved the notice for reopening of the assessment is issued to a wrong person - Held that - Where the assessment is yet to be carried out we are not inclined to enter into the disputed questions of facts in a writ petition. The department was not oblivion of the stand of the firm that it was already dissolved and that therefore no longer engages in the same business. This would be clear from the reasons recorded by the Assessing Officer. Despite which the Assessing Officer on the basis of materials on record noted that TDS was deducted by the payee on the amounts paid or credited in favour of M/s. Vinay Printing Press which would suggest that the said firm was in existence during the period relevant to assessment year 2010-11. He also noted that the ledger account in case of Narayan Sai and Aasaram Bapu showed sizable cash loan transactions with the firm. Such account showed credit and debit of several cash loan transactions running into crores of rupees. Admittedly since the firm had not filed the return of income for the said assessment year the Assessing Officer issued the impugned notice. Such being the facts in exercise of writ jurisdiction we do not find any reason to interfere on the ground raised by the petitioner. Petition is therefore dismissed.

Summary

Issues: Challenge to notice for reopening assessment of dissolved partnership firm.

Analysis:
The petitioner, a former partner of a dissolved partnership firm, challenged a notice issued by the Assessing Officer for reopening the assessment of the firm for the assessment year 2010-11. The petitioner argued that since the firm had been dissolved in 2007, the notice was issued to the wrong person. The department, however, contended that documents seized during a search operation indicated that the firm continued its printing business and received substantial cash amounts from certain individuals.

The High Court refrained from delving into disputed factual matters at the assessment stage through a writ petition. The court noted that despite the firm's claim of dissolution, the Assessing Officer, based on available evidence, concluded that the firm was still operational during the relevant period. The officer highlighted TDS deductions made on payments to the firm and significant cash transactions with specific individuals, indicating the firm's existence. As the firm had not filed its income tax return, the Assessing Officer issued the challenged notice.

Ultimately, the court, in its writ jurisdiction, found no grounds to interfere with the Assessing Officer's decision based on the facts presented. Consequently, the petition challenging the notice for reopening the assessment of the dissolved partnership firm was dismissed.