The court emphasized the need for tangible material to believe that income had escaped assessment and held that the power to grant approval for re-opening an assessment is coupled with a duty and cannot be exercised casually.

JUDGMENT

K.R. Shriram, J. - Since pleadings in the petition are completed, we have decided to dispose the petition at admission stage itself.

2. Petitioner is impugning notice dated 31st March, 2019 issued under Section 148 of the Income Tax Act, 1961 (the Act) stating that respondents have reasons to believe that income chargeable to tax for the A.Y. 2012-13 has escaped assessment within the meaning of Section 147 of the Act.

3. Thereafter, petitioner was provided reasons for re-opening by communication dated 28th September, 2019. The reasons reads as under :

1. The assessee has filed return of income for the A. Y. 2012-13 on 30.03.2013 declaring total income of Rs.3,72,997/-.

2. In this case credible information received vide letter bearing No.DDIT(Inv)/Unit-6(3)/Information/2018-19 dated 30.03.2019 has been received in this office on 31.03.2019 by email at 05:47 PM, from Dy. Director of Income Tax (Inv.)-6(3), Mumbai wherein it is stated that "the suspect person have defrauded the Maharashtra Government by preparing fabricated/bogus documents and used them as genuine documents. The accused persons especially the public servants by misusing their designation under criminal conspiracy committed acts like to cheat government and to cause financial loss and to gain the developer M/s. K.S. Chamankar Enterprises". It is also mentioned that accused mentioned has in criminal conspiracy misrepresented the facts to the Govt and dishonestly got the plot for the building of State Central Library on BOT basis allocated to M/s.India Bull Real Tech Limited.

3. In view of the above facts, I have reasons to believe that income to the extent of more than Rs.1,00,000/- chargeable to tax has escaped assessment for A. Y. 2012-13. Accordingly, the proceedings u/s. 147 of the Income Tax Act, 1961 are duly attracted in order to frame proper assessment to bring to tax appropriate income. It is therefore a fit case for issuance of notice u/s. 148 of the Income Tax Act, 1961.

4. In this case more than four years but not more than six years have lapsed from the end of the assessment year under consideration. Thus, the notice u/s. 148 is issued after obtaining prior approval of the Pr. Commissioner of Income Tax, Range-20, Mumbai as required under the provisions of section 151(1) of the Income Tax Act, 1961.

4. Petitioner replied to this notice with the reasons by a letter dated 10th October, 2019 objecting to the re-opening. The objections filed by petitioner was disposed by an order dated 17th October, 2019 rejecting the objections. Thereafter, petitioner, by submissions dated 5 th November, 2019, complied with notice issued under Section 142(1) of the Act. On 11th December, 2019 petitioner was issued notice to show cause as to why the amount of Rs.3,13,00,000/- being transaction effected on 10th May, 2011 and 1st October, 2011 in a particular bank account between two parties should not be added to the income under Section 69A of the Act being unexplained money. It is at that stage petitioner filed this petition and ad-interim stay was granted by an order dated 19th December, 2019.

5. We have heard Mr. Gopal, counsel for petitioner and Mr. Walve, counsel for respondents.

6. Mr. Gopal submitted that the notice dated 31st March, 2019 issued under Section 148 of the Act has not been validly issued and is without jurisdiction. Mr. Gopal submitted that (a) the reasons does not indicate what was the amount of income which has escaped assessment; and (b) the information based on which this notice itself has been issued was received only at 5.47 p.m., by respondent and the notice was issued at about 10.49 p.m., and therefore how could the authority which has granted the sanction by issuance of notice could be said to have applied his mind to the proposal put up before him for approval.

Mr. Gopal relied on judgment of this court in German Remedies Ltd. vs. Deputy Commissioner of Income-Tax, [2006] 287 ITR 494 (Bom) to submit that to grant or not to grant approval under