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11-02-2019, Pawan Sood, Section 148, 133-A, 154, HIGH COURT OF ALLAHABAD
By means of the present writ petition, the petitioner has challenged the re-assessment proceedings initiated against him for the Assessment Year 2007-08 and prayed for issuing a writ of certiorari quashing the impugned notice dated 29.03.2014 issued under section 148 of the Income Tax Act, 1944 (hereinafter referred to as, 'the Act').
The facts of the case are that the petitioner is an individual assessee and is running a Proprietorship concern in the name and style of “M/s National Thread Manufacturing Company” at Kanpur. The original assessment order dated 05.05.2009 was passed under section 143(3) of the Act, in which a total income of Rs. 6,54,620/- was assessed to tax. It was alleged that a survey under section 133-A of the Act was conducted at the business premises of M/s Indian Overseas Trading Company on 23.10.2007 and it was found that in the partnership concern, the petitioner is one of the partners and also, the business as Proprietorship is run by him in the name and style of M/s National Thread Manufacturing Company from the same premises.
The case of the petitioner was selected for scrutiny as per the guidelines of Central Board of Direct Taxes, New Delhi.
Thereafter, proceedings under section 154 of the Act were initiated. It was found that sundry credit amounting to Rs. 79,88,253/- shown by the petitioner were not verified during the course of original assessment proceedings under section 143(3) of the Act. It was further alleged by the Department that the petitioner has created fake and fictitious liability, which is not ascertainable; hence, the same should be disallowed and added back to the income of the petitioner, which resulted in escapement of tax to the tune of Rs. 24,44,404/-. Proceedings under section 154 of the Act were initiated and subsequently, the same were dropped vide order dated 25.03.2014.
Thereafter, proceedings under section 148 of the Act were initiated by issuing a notice dated 29.03.2014 on the ground that the petitioner has declared a huge amount of sundry creditors as on 31.03.2007 in the name of two concerns, viz., M/s Dulbecco Meyer & Company Limited and La-grand Consumables at Rs. 34,30,503/- and Rs. 45,57,750/- respectively, which lacked due confirmation/ verification.
This impugned re-assessment notice dated 29.03.2014 has been assailed in the present writ petition.
We have heard Ms. Bhavna Mehrotra, assisted by Shri Abhinav Mehrotra, learned counsel for the petitioner and Shri Ashish Agarwal, learned counsel for the respondent – Department.
Ms. Mehrotra has vehemently argued that there is no fresh material for initiating re-assessment proceedings against the petitioner, as at the time of passing of the original assessment order, the petitioner has disclosed fully and truly all material facts necessary for his assessment; hence, the present proceedings have been initiated only on the basis of a change of opinion, which is not permissible under the Act.
It has further been argued that the proceedings under section 154 of the Act were initiated on the same fact as mentioned in the impugned notice and the proceedings under section 154 of the Act have already been dropped by the order dated 25.03.2014. Learned counsel for the petitioner submits that the alleged issue for initiating re-assessment proceedings has been