1 wp17-20dt.18-02-20 Santosh IN HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO. 17 OF 2020 M/s. Anand Developers, partnership firm constituted under provisions of Partnership Act, 1932, having office at 801, Anand Square B, Near Sanjeevani Hospital, Baina, Vasco Da Gama 403 802, Goa, India P. A. No.AAMFA 9496L, through its Authorized Representative Mr. Ashish V. Prabhu Verlekar, son of Mr. V. B. Prabhu Verlekar, major of age, Indian National, having office at 201, Govinda Building, M. G. Road, Panaji, Goa. Petitioner Versus 1. Asst. Commissioner of Income Tax Circle 2(1), having office at Patto, Panaji Goa. 2. Commissioner of Income-Tax Patto, Panaji, Goa. Respondents. Mr. Shivan Desai, Advocate for Petitioner. Ms. Susan Linhares, Standing Cousnel for Respondents. 2 wp17-20dt.18-02-20 Coram : M. S. Sonak & Kum. Nutan D. Sardessai, JJ. Date : 18th February, 2020. ORAL JUDGMENT : (Per M. S. Sonak, J.) Heard Mr. Shivan Desai for Petitioner and Ms. S. Linhares, learned Standing Counsel for Respondents. 2. Rule. Rule is made returnable forthwith with consent of and at request of learned Counsel for parties. 3. Challenge in this Petition is to Notice dated 29 th March, 2019, issued under Section 148 of Income Tax Act, 1961 (IT Act) and order dated 17th December, 2019, disposing of Petitioner's objections to reopening of assessment in pursuance of notice dated 29th March, 2019. 4. Mr. Shivan Desai, learned Counsel for Petitioner submits that in present case, true and complete disclosures were made by Petitioner vide letter dated 20 th February, 2015 in course of assessment proceedings itself. Upon consideration of such disclosures, Assessing Officer (AO) made assessment order dated 16th March, 2015 under Section 143(3) of IT Act. Mr. Desai submits that in such circumstances, merely on basis of 3 wp17-20dt.18-02-20 change of opinion, AO lacked jurisdiction to issue notice under Section 148 of IT Act, seeking to reopen assessment. In any case, Mr. Desai submits that since, there was absolutely no failure to make true and full disclosures, there was no jurisdiction to issue notice under Section 148 of IT Act, after expiry of period of 4 years from date of assessment. On both these grounds, he submits that Rule is liable to be made absolute in present Petition. He relies on cases of Mrs. Parveen P. Bharucha vs. Deputy Commissioner of Income Tax Circle 2 and anr.1; Zuari Foods and Farms Pvt. Ltd. vs. Asst. Commissioner of Income-Tax and another2; and Bombay Stock Exchange Ltd. vs. Deputy Director of Income-Tax (Exemption) and others (No.2) 3 in support of Petition. 5. Ms. Linhares, learned Standing Counsel for Respondents submits that since Petitioner had admitted vide letter dated 20th February, 2015 that it had violated provisions of Section 80IB of IT Act and further, failed to make true and full disclosures, there was absolutely no jurisdictional error in issuing impugned notice or making impugned order. She submits that scope of interference with notices under Section 147/148 of IT Act is quite limited. She submits that at this stage, it will not be 1 (2012) 348 ITR 325 2 WP No.1001 of 2007 decided on 11/4/2018 3 [2014] 365 ITR 181 (Bom) 4 wp17-20dt.18-02-20 appropriate to go into merits of matter, for which, Petitioner will have ample opportunity during reassessment proceedings. She, therefore, submits that present Petition is liable to be dismissed. She relies on Calcutta Discount Co. Ltd. vs. Income-tax Officer4; S. Narayanappa vs. Commissioner of Income- tax5; Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers (P) Ltd.6 and Raymond Woollen Mills Ltd. vs. Income Tax Officer & Ors. in support of her defence. 6. rival contentions now fall for our determination. 7. In present case, we are concerned with Assessment Year 2012-13, for which, Petitioner had submitted returns within prescribed period, declaring total income of Rs.62,233/-. case was selected for scrutiny through CASS and notice was issued to Petitioner under Section 143(2) of IT Act, which was served upon Petitioner on 28-08-2013. Based upon details furnished by Petitioner to AO, assessment order dated 16 th March 2015 was made by AO in terms of Section 143(2) of IT Act. 8. Paragraphs 3 and 4 of assessment order dated 16 th 4 [1961] 41 ITR 191 (SC) 5 [1967] 63 ITR 219(SC) 6 (2007) 291 ITR 0500 5 wp17-20dt.18-02-20 March, 2015 are relevant to issues raised in present Petition and, therefore, same are prescribed below for convenience of reference : 3. In response to notices issued, Shri Rajan Ramani, Chartered Accountant and Authorized Representative of assessee appeared from time to time and submitted details. details produced have been verified and case was heard. assessee is carrying on Real Estate/Builders & Developers. 4. After perusing details submitted by assessee, assessment is concluded by accepting return of income of assessee. 9. In fact, it is case of Petitioner that Petitioner, vide letter dated 20th February, 2015, in course of assessment proceedings before AO had itself submitted that few flats may have been allotted to persons in violation of Clause 10(f ) of Section 80IB of IT Act. However, in same letter, it was contended that this ought not to be regarded as any breach of provisions of Section 80IB or in any case, this ought not to be regarded as any breach of provisions of Section 80IB in its entirety and at highest, benefit may be denied in respect of transfers made in breach of Clause 10(f) of Section 80IB of IT Act. 10. Petitioner has pleaded that for present, Petitioner does not have copy of letter dated 20 th February, 6 wp17-20 dt. 18-02-20 2015 and, therefore, letters were addressed to Respondents to furnish copy of same. However, copy of same has till date not been furnished by Respondents. 11. factum of address of letter dated 20th February, 2015 is indisputable, because Respondents have themselves not only referred to letter dated 20 th February, 2015, but also quoted from letter dated 20th February, 2015 in Show Cause Notice dated 17th December, 2019 issued to Petitioner along with impugned Order dated 17th December, 2019, by which objections of Petitioner to reopening of assessment came to be rejected. Even impugned order dated 17 th December, 2019, rejecting Petitioner's objections, makes specific reference to Petitioner's own letter dated 20th February, 2015 submitted during assessment proceedings under Section 143(3) of IT Act. 12. Both, Show Cause Notice dated 17th December, 2019 and impugned Order dated 17th December, 2019, specifically state that Petitioner, in course of assessment proceedings before AO, had furnished list of flat owners to whom flats were sold in project 'Bay Village'. notice and impugned order proceed to state that upon perusal of this list, coupled with letter dated 20th February, 2015, it transpires that there was non- compliance on part of Petitioner with provisions of 7 wp17-20dt.18-02-20 Section 80IB, at least in so far as some of sales were concerned. 13. Since, it is virtually admitted fact that Petitioner had submitted list of flat owners and further, itself vide letter dated 20th February, 2015 pointed out that there may be breach in so far as sale of some of flats are concerned, it can really not be said by Respondents that there was no truthful or complete disclosures on part of Petitioners in course of assessment proceedings itself. Merely making of bald statement that assessee had not disclosed fully and truly all material facts, is really never sufficient in such matters. 14. In case of Bombay Stock Exchange Ltd. (supra), Division Bench of this Court has held that though it is true that reasons for initiating reassessment proceedings do, in fact, state that there was violation on part of Petitioner to disclose fully and truly all material facts necessary for its assessment, however, making of such bald assertion was not enough. Relying upon Hindustan Lever Ltd. vs. R. B. Wadkar, Assistant CIT, [2004] 268 ITR 232 (Bom), Division Bench held that there is requirement of giving details as to which fact or material was not disclosed by Petitioner, leading to its income escaping assessment. In said matter as well, there was only bald assertion in reasons that there was failure on part of Petitioner to disclose fully and 8 wp17-20 dt. 18-02-20 truly all material facts, without giving any details thereof. notice proposing to reopen assessment was quashed in such circumstances. 15. In present case as well, apart from bald assertion that Petitioner had not disclosed fully and truly all material facts, no details have been disclosed as to material which was allegedly not disclosed either truly, or fully. Rather, record indicates that entire list of flat owners was disclosed. Further, vide letter dated 20 th February, 2015, disclosures were made in relation to sale transactions and it was even suggested that some of sale transactions may not be compliant with provisions of Clause 10(f) of Section 80IB of IT Act. Clearly, therefore, Respondents have failed to make out any case that there was no true and full disclosures by Petitioner. 16. Section 147 of IT Act empowers AO who has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, to reassess such income, no doubt, subject to provisions of sections 148 to 153 of IT Act. proviso to Section 147, however, makes clear that where assessment under sub- section (3) of section 143 has been made for relevant assessment year, no action shall be taken under Section 147 of IT Act, after expiry of four years from end of 9 wp17-20dt.18-02-20 relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee, inter alia, to disclose fully and truly all material facts necessary for its assessment for that assessment year. 17. This means that normally, limitation period for reassessment under Section 147 of IT Act is 4 years. However, in case where assessment has been made under Section 143(3) of IT Act where, inter alia, assessee fails to disclose fully and truly all material facts necessary for assessment for that assessment year, reassessment can be made even beyond period of 4 years in terms of Section 148 of IT Act. Therefore, in order to sustain notice seeking to reopen assessment beyond normal period of 4 years, it is necessary for Respondents to establish, at least, prima facie that there was failure to disclose fully and truly all material facts necessary for assessment for that assessment year. 18. In facts of present case, Respondents have failed to establish this precondition even prima facie. Rather, material on record establishes that there were full and true disclosures of all material facts necessary for assessment of Petitioner for Assessment Year 2012-13. Despite this, impugned notice seeking to reopen assessment for Assessment Year 2012-13 has been issued beyond normal period of 4 years. According to us, on this 10 wp17-20dt.18-02-20 short ground impugned notice dated 29th March, 2019 and impugned order dated 17th December, 2019 are required to be quashed and set aside. 19. view which we have taken finds support in decisions of Division Bench of this Court in case of Mrs. Parveen P. Bharucha (supra) and Zuari Foods and Farms Pvt. Ltd. (supra). 20. decisions relied upon by Ms. Linhares are quite distinguishable and will not apply to fact situation in present matter. 21. S. Narayanappa (supra) provides that where it was clear from material on record that there was nondisclosure on part of assessee which led to underassessment of income, Revenue was entitled to issue notice, seeking reopening of assessment. In present case, material on record is clear, on that there was no failure to disclose true and full material facts on part of Petitioner-assessee. Therefore, decision in S. Narayanappa (supra) can be of no assistance to Respondents-Revenue. 22. In Raymond Woollen Mills Ltd. (supra), Hon'ble Apex Court has held sufficiency or correctness of material on basis 11 wp17-20dt.18-02-20 of which AO may have had 'reasons to believe' is not to be examined at stage of determining validity of notices, seeking to reopen assessment. In present case, we have not at all adverted to sufficiency or correctness of material. In fact, that issue is not being addressed, since one of essential parameters precedent to reopening of assessment, has not at all been complied with by Revenue. 23. In Rajesh Jhaveri Stock Brokers (P) Ltd. (supra), there is discussion as to circumstances in which it can be held that notice seeking reassessment is based on mere change of opinion by AO. Again, we have not gone into this issue in present matter and, therefore, decision is really not attracted in present case. 24. decision in Calcutta Discount Co. Ltd. (supra) in fact, assists case of Petitioner rather than Respondents. In this decision, Hon'ble Supreme Court has held that it is duty of assessee to disclose fully and truly all primary relevant facts and once all primary facts are before assessing authority, he requires no further assistance by way of disclosure and it is for him to decide what inference of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. However, if there are some reasonable grounds for thinking that there had been under- assessment as regards any primary facts which could have material 12 wp17-20dt.18-02-20 bearing on question of under-assessment, that would be sufficient to give jurisdiction to ITO to issue notice for reassessment. 25. In present case, as noted earlier, there is absolutely no reference to any alleged material facts which Petitioner failed to disclose in course of assessment proceedings. Rather, impugned notice refers to list, as well as letter issued by Petitioner itself, which is sought to be made basis for reopening of assessment. In this case, it is apparent that all primary facts were disclosed by Petitioner. In fact, Petitioner had disclosed truly and fully all material facts and it was open to AO to take same into account in course of assessment proceedings or, in any case, it was open to AO to issue notice for reassessment within normal period of 4 years from date of assessment. 26. For all aforesaid reasons, we allow present Petition and quash and set aside impugned notice dated 29 th March, 2019 and impugned order dated 17th December, 2019. Rule is accordingly made absolute in terms of prayer clauses (a), (b) and (c) of Petition. There shall be no order as to costs. Nutan D. Sardessai, J. M. S. Sonak, J. Anand Developers v. ACIT, Circle-2(1), Panaji / CIT, Panaji