Reopening of assessment beyond four years without fresh tangible material or proper disposal of objections is illegal under the Income Tax Act.

JUDGMENT :

Advait M. Sethna, J.

1. Rule, made returnable forthwith. Respondents waive service. Heard finally with the consent of the parties.

A. Issue Before The Court:-

2. The pivotal issue for consideration is whether the assessment order dated 29 March 2022 (“impugned order” for short) read with the notice under Section 148 of the Income Tax Act, 1961 (“IT Act” for short) dated 27 March 2021 (“impugned notice” for short), reopening the assessment of the petitioner under Section 147 read with Section 144B of the IT Act for the Assessment Year 2014-2015 (“A.Y. 2014-15” for short), are illegal, without jurisdiction, non-est as urged by the petitioner.

3. The substantive prayers in the petition read thus:-

“(a) that this Hon'ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction, calling for the records of the Petitioner's case and after going into the legality and propriety thereof, to quash and set aside the said (i) Notice dated 27th March, 2021 u/s 148 for A.Y. 2014-15 (Exh. A) and (ii) Assessment Order u/s 147 r.w. 143(3) dated 29th March, 2022 being (Exh. "B") and after examining the legality and validity thereof to quash and set aside the same;

(b) This Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction, directing the Respondents, its servants, subordinates, agents and successors in office;

(i) To forthwith withdraw and/or cancel and/or quash the (i) Notice dated 27th March, 2021 u/s 148 for A.Y. 2014-15 (Exh. A) and (ii) Assessment Order u/s 147 r.w. 143(3) dated 29th March, 2022 being (Exh. "B");

(ii) To forthwith forbear from taking any steps whatsoever pursuant to or in implementation of the (i) Notice dated 27th March, 2021 u/s 148 for ΑΥ 2014-15 (Exh. A) and (ii) Assessment order u/s 147 r.w.143(3) dated 29^th March, 2022 being (Exh. “B”).”

B. Factual Matrix:-

4. The petitioner is a registered partnership firm engaged in the business of real estate development, having partners in the name of Mr. Mukesh Doshi and Mrs. Harsha Doshi carrying on business of builders and developers of immovable property. During the assessment year in question, i.e., A.Y. 2014-15. The assessee was carrying on construction of residential project in Oshiwara with other two co-owners. By a supplementary partnership deed dated 1 April 2010, it was mutually agreed between the partners that no partner shall be charged interest on withdrawal by any other partner.

5. The original return of income for the relevant assessment year being A.Y. 2014-15 was filed on 27 November 2014, declaring loss of Rs. 5,53,822/-. The return was duly acknowledged by the respondent. The petitioner also furnished copy of its audited accounts along with the tax audit report filed under section 144B of IT Act, both dated 1 September 2014. The Assessing officer respondent no. 1 issued a notice to the petitioner dated 10 May 2016 under section 142 (1) of the IT Act seeking details/documents qua the return of the petitioner. The petitioner filed its reply dated 24 May 2016 to such notice, furnishing the information as sought by respondent no. 1.

6. Thereafter, Respondent n