Reopening of assessment under Section 148 is impermissible if the issues were previously examined under Section 263 without fresh material.

JUDGMENT :

Jitendra Jain, J.

1. Rule. By consent of the parties, since pleadings are completed, taken up for final disposal. By consent of the parties, both the writ petitions are disposed of by common order since the issue involved is identical. We propose to treat Writ Petition No.2771 of 2022 as a lead matter.

2. The petitioner challenges notice dated 25 March 2021 issued under Section 148 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2013-14.

Brief facts :

3. The petitioner is engaged in the business of real estate and has filed his return of income on 27 September 2013 declaring total income of Rs.54,91,960/-. On 31 December 2015, an assessment order under Section 143(3) of the Act came to be passed accepting the return income.

Proceedings u/s 263 :

4. On 29 November 2017, a notice under Section 263 of the Act came to be issued by the Commissioner of Income Tax on the ground that M/s. Orchid Builders and Developers has sold 6 flats on behalf of the petitioner for Rs.2,74,94,950/-. However, the same is not reflected in the profit and loss account for the year ending 31 March 2013. The notice further seeks to examine disallowance on account of interest payment and proposes to examine income from house property which wwaass nnoott ooffffeerreedd ffoorr ttaaxx.. TThhee ppeettiittiioonneerr ffiilleedd hhiiss rreeppllyy ttoo tthhee ssaaiidd sshhooww cause notice vide letter dated 1 March 2018. On 16 March 2018, an order under Section 263 was passed by the Commissioner of Income-tax setting aside the assessment order with a direction to conduct proper inquiries, investigation and examine all the issues raised in 263 notice and pass a fresh order. Pursuant to the said direction, Assessing Officer on, 14 December 2018, passed an assessment order under Section 143 (3) read with Section 263 assessing income of the petitioner at Rs.57,06,250/- by making additions on account of notional rent under the head ‘income from house property.’

Proceedings u/s 148 :

5. On 25 March 2021, a notice under Section 148 of the Act was issued to the petitioner calling upon the petitioner to file his return of income for assessment year 2013-14 since the respondents proposed to reassess the income under Section 147 of the Act. The petitioner on 4 January 2022 filed his return of income in compliance with the said impugned notice. On a request being made by the petitioner, the reasons recorded for reopening the case were furnished on 22 March 2021. The petitioner vide letter dated 2 March 2022 objected to the reasons for reopening on the ground that the issue for which the reopening is sought was subject matter of 263 proceedings and, therefore, reopening is bad- in-law. The petitioner also raised objection with respect to there being no failure to disclose fully and truly all material facts and further challenged the sanction obtained from the Commissioner of Income Tax under Section 151 of the Act. On 11 March 2022, an order rejecting the objections came to be passed. In the said order, the reopening was justified on the grounds that, if in the original assessment, the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Assessing Officer, the assessment can be reopened on the basis of information obtained from the original assessment. In the said order, reliance was placed on the decision of the Supreme Court in the case of Kalyanji Mavji & Co. Vs. CIT, [(1976) 102 ITR 287 (SC)]

6. It is on the above backdrop that the petitioner is before us challenging the order rejecting the objections dated 11 March 2022 and notice under Section 148 of the Act dated 25 March 2021.

7. Ms. Pawar, learned counsel for the petitioner submits that in the absence of any failure to disclose fully and truly all material facts, the impugned proceedings cannot be initiated and for this submission, she placed reliance on the first proviso to Section 147 of the Act. She further relied upon the third proviso to Section