2024:BHC-AS:33789-DB IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2896 OF 2022 Aashish Niranjan Shah, Age: 55, Occupation: Business Residing at: 39, Mantri Court Ambedkar Road, Next to RTO Pune- 411001, Maharashtra …Petitioner Versus

1. Union of India Notice to be served upon The Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi- 110001

2. Assistant Commissioner of Income Tax, Circle-7 Office of The Assistant Commissioner of In-

come Tax, Circle-7, Room No.316, 3^rd Floor, Aaykar Sadan, Bodhi Towers, Salisbury Park, Gultekadi, Pune- 411037, Maharashtra

3. The Principal Commissioner of Income Tax-4, Aaykar Sadan, Bodhi Towers, Salisbury Park, Gultekadi, Pune- 411037, Maharashtra …Respondents Mr. Sagar Tilak, a/w Sachin Hande, Payal Rathod, Advocates for the Petitioner.

Mr. Suresh Kumar, Advocate for Respondent.

CORAM : G. S. KULKARNI &

SOMASEKHAR SUNDARESAN, JJ.

Digitally signed by ASHWINI ASHWINI JANARDAN JANARDANVALLAKATI VALLAKATIDate: Page 1 of 21

2024.08.23

12:07:13

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RESERVED ON: AUGUST 06, 2024 PRONOUNCED ON: AUGUST 23, 2024 JUDGEMENT: (Per, Somasekhar Sundaresan J.)

1. Rule. With the consent of the parties, taken up for final hearing and disposal.

2. This petition is a challenge to reassessment proceedings initiated in respect of assessment year 2013-14 (“AY-2013-14”). The Petitioner, an individual had filed the relevant tax returns on 27^th September, 2013, offering taxable income of Rs.73,08,942/-. The returns were subjected to scrutiny assessment under Section 142(2) of the Income-tax Act, 1961 (“the Act”). The assessment order came to be passed on 11^th March, 2016. An addition of Rs.1,14,329/- was made to the returned income. In compliance with the same, the additional tax amount as assessed was paid on 12^thApril, 2016.

3. On 31^st March, 2021 i.e. seven years after the end of the relevant assessment year, a notice under Section 148 (“Impugned Notice”) was issued to the Petitioner by the Assistant Commissioner of Income-tax, Circle 7 in Pune, Respondent No.2. The sanction for the issuance of the notice under Section 148 had been issued by the Principal Commissioner of Income-tax-4, Pune, Respondent No.3. In response, the Petitioner submitted that he had no change to make to the originally filed returns and therefore, the very same returns were again filed by him on 28^th April, 2021. On 30^th June, 2021 Respondent No.2 issued a notice under Section 143(2) along with the reasons for reassessment. The stated reason provided for the proposed reassessment was that the returns had not been subjected to scrutiny assessment.

4. On 3^rd July, 2021, the Petitioner submitted his written objections to the impugned notice questioning the validity of the reasons for which reassessment had been proposed. The Petitioner asserted that his returns for AY-2013-14 had indeed been subjected to scrutiny assessment. He also submitted that under Section 147 as then applicable, no reassessment would be permissible after the expiry of four years from the end of the relevant assessment year unless the escapement of income was attributable to failure on his part to disclose fully and truly all material facts necessary for assessment at the time of the original assessment. In short, the Petitioner’s primary objection was that since he had filed his return for AY-2013-14 without default, and such return had been subjected to a scrutiny assessment, unless and until there had been a demonstrated failure on his part to disclose fully and truly any material facts, the jurisdictional fact necessary to effect reassessment cannot be said to be in existence.

5. On 21^st December, 2021, the Revenue communicated a rebuttal of objections raised by the Petitioner against the issuance of the notice for reassessment. In a nutshell, the case of Respondent No.2 was that income from trading in shares to the tune of Rs.20,69,450/- had escaped assessment, because of which reassessment was being proposed. The b