JUDGMENT :

K.R. Shriram J.

1. Pleadings are complete. With the consent of the Parties we decided to dispose this Petition at this admission stage. Therefore, Rule, made returnable forthwith.

2. Petitioner is an individual, who filed return of income on 13th January 2014 for Assessment Year 2013-14 declaring total income of Rs.2,32,81,270/-. Petitioner’s case was selected for scrutiny and Petitioner received notice under section 143(2) of the Income Tax Act, 1961 (“the Act”).

3. During Financial Year 2012-13 corresponding to Assessment Year 2013-14, Petitioner along with other co-owners had entered into a Development Agreement on 15th June 2012 with one Sai Ashray Developers ("Sai Ashray") for developing the land situated at Chikhloli, Ambernath. During the assessment proceedings under Section 143(3) of the Act, Petitioner, vide letter dated 17th March 2016, had filed a copy of the Development Agreement before the Assessing Officer (“AO”). The AO asked Petitioner as to why the Development Agreement should not be treated as ‘transfer of the said land’ resulting in capital gains and taxed accordingly. Petitioner filed a reply and in the reply Petitioner explained that by entering into the Development Agreement, Petitioner has not transferred the land to Sai Ashray and specific reference was made to provisions of Section 2(47)(v) of the Act and Section 53A of the Transfer of Property Act, 1882. Petitioner’s explanation was accepted and the assessment order under Section 143(3) of the Act came to be passed on 31st March 2016 without making any addition on account of capital gains. Petitioner’s income was, however, determined as Rs.3,32,85,240/- wherein other additions to the total income of Petitioner were made.

4. Petitioner received a notice dated 22nd March 2021 under Section 148 of the Act stating that Respondent No.1 had reasons to believe that Petitioner’s income chargeable to tax for Assessment Year 2013-14 had escaped assessment within the meaning of Section 147 of the Act. Petitioner also received a notice dated 6th January 2022 under Section 142(1) of the Act. Petitioner was also served the reasons recorded for re-opening the assessment.

5. Petitioner filed detailed objections vide its communication dated 8th February 2022 that came to be disposed by an order dated 14th February 2022. It is this order along with notice issued under Section 148 of the Act which is impugned in this Petition.

6. It is Petitioner’s case that since the notice under Section 148 of the Act has been issued after the expiry of four years from the end of the relevant assessment year, as provided in Section 147 of the Act, re-opening of the assessment was not permissible unless there was failure on the part of Petitioner to fully and truly disclose material facts required for assessment. Mr. Jain submitted that the reasons to believe does not indicate that there was any failure on the part of Petitioner to truly and fully disclose material facts.

7. Mr. Suresh Kumar submitted that Petitioner has filed original return of income treating the land in question as ‘stock in trade’ in the books of accounts and hence, not a ‘capital asset’ within the meaning of Section 2(47) of the Act. But the screenshot of the schedule of fixed assets held by Petitioner as seen in the balance sheet as on 31st March 2012 required for Assessment Year 2012-13, the land in question was treated as a ‘capital asset’ and, therefore, Petitioner had misrepresented the facts by treating the land as ‘stock in trade’ in her books of accounts instead of treating it as a ‘capital asset’ within the meaning of Section 2(47) of the Act.

8. The entire basis as we could gather from the reason for reopening which prompted the AO to conclude that there was reason to believe escapement of income is that Petitioner along with two other co-owners had granted development rights in respect of land at Chikhloli, Ambernath to Sai Ashray. As per the Development Agreement, Sai Ashray shall develop the propert