WP376_20.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.376 OF 2020 Aarti Dharmen Shah Petitioner Vs. Income Tax officer, Ward 25(1)(1), Mumbai and another Respondents Mr. Mihir Naniwadekar a/w. Ms Farzeen Khambatta for Petitioner. Mr. Sham Walve for Respondent No.1. CORAM : UJJAL BHUYAN, MILIND N. JADHAV, JJ. DATE : MARCH 06, 2020 P.C. : Heard Mr. Naniwadekar, learned counsel for petitioner and Mr. Walve, learned standing counsel Revenue for respondent No.1. 2. Smt. Sheela Venkatesan, Income Tax Officer, Ward 25(1)(1), Mumbai is also present before Court. 3. By filing this petition under Article 226 of Constitution of India, petitioner has assailed legality and validity of order dated 01.12.2019 passed by respondent No.1 i.e., Income Tax Officer, Ward 25(1)(1), Mumbai under Section 188A of Income Tax Act, 1961 (briefly 'the Act' hereinafter) directing her to make payment of tax arrears as mentioned in order. 4. Case of petitioner is that she is assessee under Act assessed to tax as individual. Prior to 31.03.2012, petitioner was partner in partnership firm M/s. Sambhav Enterprises registered under Indian Partnership Act, 1932, referred to hereinafter as 'firm'. With effect from 31.03.2012, petitioner retired from said firm and ceased to be partner. 1/3 Uploaded on - 16/03/2020 Downloaded on - 18/03/2020 10:51:03 WP376_20.doc 5. Notice under Section 188-A dated 06.11.2019 was issued by respondent No.1 to petitioner as partner of firm stating that demand of Rs.30,85,40,488.00 was raised in case of firm for assessment years 2011-12 and 2012-13, break-up being Rs.3,79,370.00 for first assessment year and Rs.34,61,410.00 for second assessment year. It was stated that being one of partners of firm with share of profit / loss @20%, respondent No.1 proposed to invoke provisions of Section 188-A of Act to recover outstanding demand from petitioner in capacity of partner for assessment years 2011-12 and 2012-13 that is upto 31.03.2012 to extent of Rs.38,40,780.00 plus interest under Section 220(2) of Act. Hence, show cause notice. 6. Petitioner replied to show cause notice on 11.11.2019. It was mentioned therein that there was no demand pending in case of firm relating to aforesaid two assessment years because against relevant assessment orders, firm had preferred appeals before Commissioner of Income Tax (Appeals) - 37, Mumbai and Commissioner of Income Tax (Appeals) i.e., first appellate authority had allowed appeals by deleting additions / disallowances except some minor additions / disallowances. Copies of orders passed by first appellate authority dated 02.05.2017 were enclosed with show cause reply. 7. However, by impugned order dated 01.12.2019, respondent No.1 while taking note of reply given by t he petitioner observed that reply was given only after service of notice. Considering firm and partners as defaulters, it was held that petitioner as partner of firm is jointly and severally liable along with firm for payment of tax arrears. 8. It may be mentioned that in body of said order not only 2/3 Uploaded on - 16/03/2020 Downloaded on - 18/03/2020 10:51:03 WP376_20.doc demand for assessment years 2011-12 and 2012-13 were raised but also for subsequent assessment year 2013-14 when admittedly petitioner had retired as partner of firm with effect from 31.03.2012. 9. Aggrieved by above, present writ petition has been filed. 10. When learned counsel for petitioner pointed out anomaly, Mr. Walve, learned standing counsel submitted on basis of instructions received from respondent No.1 who is present in Court that there is no demand payable by firm for assessment years 2011-12 and 2012-13 and consequently, question of raising of any demand against petitioner does not arise. Further, petitioner having retired as partner of firm with effect from 31.03.2012 raising any demand against petitioner for assessment year 2013-14 and onwards also does not arise. 11. In view of statements made, we set aside impugned order dated 01.12.2019 issued by respondent No.1. 12. Writ petition is accordingly allowed but without any order as to costs. (MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.) Minal Parab 3/3 Uploaded on - 16/03/2020 Downloaded on - 18/03/2020 10:51:03 Aarti Dharmen Shah v. Income-tax officer, Ward-25(1)(1), Mumbai And Another