Gujarat High Court
Ahmedabad Urban Development Authority vs Deputy Director Of Income Tax on 25 April, 2017
Author: M.R. Shah
Bench: M.R. Shah, B.N. Karia
C/SCA/9654/2010 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9654 of 2010
With
SPECIAL CIVIL APPLICATION NO. 9655 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be
allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair
copy of the judgment ?
4 Whether this case involves a substantial
question of law as to the interpretation of the
Constitution of India or any order made
thereunder ?
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AHMEDABAD URBAN DEVELOPMENT AUTHORITY....Petitioner(s)
Versus
DEPUTY DIRECTOR OF INCOME TAX
(EXEMPTION)....Respondent(s)
======================================
Appearance:
MR SN SOPARKAR, SENIOR ADVOCATE with MRS SWATI
SOPARKAR, ADVOCATE for the Petitioner(s) No. 1
MR MANISH BHATT, SENIOR ADVOCATE with MRS MAUNA M
BHATT, ADVOCATE for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 25/04/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) Page 1 of 5 HC-NIC Page 1 of 5 Created On Tue Aug 15 03:07:24 IST 2017 C/SCA/9654/2010 JUDGMENT [1.0] As common question of law and facts arise in both these petitions they are disposed of by this common judgment and order.
[2.0] By way of these petitions under Article 226 of the Constitution of India the common petitioner - assessee - Ahmedabad Urban Development Authority ("AUDA" for short), a statutory authority constituted under the provisions of the Gujarat Town Planning Act has prayed for an appropriate writ, order or direction to quash and set aside the impugned notice under Section 148 of the Income Tax Act by which the Assessing Officer has sought to reopen the assessment for the Assessment Years 2005-06 and 2006-07 alleging inter alia that the income chargeable to tax has escaped the assessment within the meaning of Section 148 of the Income Tax Act.
[3.0] The facts leading to the present Special Civil Applications in nutshell are as under;
[3.1] Petitioner - assessee was registered under Section 12AA of the Income Tax Act with effect from 01/04/2002 vide order dated 23/10/2003 of the Director of Income Tax (Exemption), Ahmedabad. Petitioner - assessee filed its return of income for the Assessment Year 2005-06 and claimed deduction under Section 11 of the Income Tax Act. The Assessment Order was passed on 22/10/2007 for the Assessment Year 2005-06 granting deduction under Section 11 of the Income Tax Act as claimed by the assessee.
[3.2] Petitioner - assessee filed the return of income for
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C/SCA/9654/2010 JUDGMENT
the Assessment Year 2006-07 declaring the total income at NIL. The Assessing Officer passed the assessment order dated 04/12/2008 for the Assessment Year 2006-07. Thereafter the petitioner - assessee was served with the show cause notice under Section 12AA(3) of the Income Tax Act stating the the activities carried out by the petitioner - assessee were more of commercial nature resulting in commercial income. Director of Income Tax (Exemption) passed an order dated 15/02/2010 cancelling the registration granted on 23/10/2003 under Section 12AA(3) of the Income Tax Act. Thereafter, on the basis of the order passed by the Director of Income Tax (Exemption) dated 15/02/2010 by which the authority cancelled the registration retrospectively, the Assessing Officer has issued the impugned notice under Section 148 of the Income Tax Act for the Assessment Years 2005-06 and 2006-07 for reopening of the assessment. The petitioner - assessee objected to said reassessment proceedings and the notice under Section 148 of the Income Tax Act by filing detailed objections and contending inter alia that against the order passed by the Director of Income Tax (Exemption) cancelling the registration under Section 12AA(3) of the Income Tax Act, the petitioner - assessee had challenged the order before the learned tribunal, and therefore, it was requested to drop the reassessment proceedings. Thereafter, the learned tribunal passed an order in favour of the petitioner
- assessee vide order dated 21/05/2010 quashing and setting aside the order of Director of Income Tax (Exemption) passed under Section 12AA(3) of the Income Tax Act. Despite the above, the Assessing Officer disposed of the objections raised by the petitioner - assessee vide communication dated 09/07/2010 and issued notice under Section 142(1) and 143(2) Page 3 of 5 HC-NIC Page 3 of 5 Created On Tue Aug 15 03:07:24 IST 2017 C/SCA/9654/2010 JUDGMENT of the Income Tax Act and asked the petitioner - assessee to comply with the same. Hence, the common petitioner - assessee has preferred the present Special Civil Applications under Article 226 of the Constitution of India challenging the impugned notice under Section 148 of the Income Tax Act and also challenging the reassessment proceedings for the Assessment Years 2005-06 and 2006-07.
[4.0] Shri S.N. Soparkar, learned Senior Advocate has appeared on behalf of the petitioner - assesee and Shri Manish Bhatt, learned Senior Advocate has appeared on behalf of the revenue.
[5.0] At the outset, it is required to be noted that by way of these petitions the common petitioner - assessee has challenged the impugned notices under Section 148 of the Income Tax Act by which the Assessing Officer has sought to reopen the assessment for the Assessment Years 2005-06 and 2006-07. From the reasons recorded it appears and it is not in dispute that the assessment for the Assessment Years 2005-06 and 2006-07 are sought to be reopened by the Assessing Officer by impugned notice solely on the basis of the order passed by the Director of Income Tax (Exemption) dated 15/02/2010 under Section 12AA(3) of the Income Tax Act by which the Director of Income Tax (Exemption) cancelled the registration granted under Section 12AA of the Income Tax Act retrospectively. However, it is required to be noted and it is not in dispute that the order passed by the Director of Income Tax (Exemption), Ahmedabad dated 15/02/2010 cancelling the registration under Section 12 AA(3) of the Income Tax Act on the basis of which the Assessing Officer has sought to reopen Page 4 of 5 HC-NIC Page 4 of 5 Created On Tue Aug 15 03:07:24 IST 2017 C/SCA/9654/2010 JUDGMENT the assessment for the Assessment Years 2005-06 and 2006-07 has been set aside by the learned tribunal. The order passed by the learned tribunal quashing and setting aside the order passed by the Director of Income Tax (Exemption) dated 15/02/2010 cancelling the registration retrospectively has been confirmed by this Court vide order in Tax Appeal No.2323/2010. Under the circumstances, when the grounds on which the Assessing Officer has sought to reopen the assessment for the Assessment Years 2005-06 and 2006-07 itself do not exist as the same has been set aside by the learned tribunal confirmed by this Court, the impugned notice under Section 148 of the Income Tax Act and reopening of the assessment for the Assessment Years 2005-06 and 2006-07 cannot be further sustained and the same deserves to be quashed and set aside as the cause and the grounds to reopen the assessment for the Assessment Years 2005-06 and 2006-07 do not exist.
[6.0] In view of the above and for the reasons stated hereinabove, both these petitions succeed. The impugned notice under Section 148 of the Income Tax Act to reopen the assessment for the Assessment Years 2005-06 and 2006-07 and the impugned reassessment proceedings for the Assessment Years 2005-06 and 2006-07 are hereby quashed and set aside. Rule is made absolute to the aforesaid extent in each of the petitions. However, in the facts and circumstances of the case, there shall be no order as to costs.
(M.R. SHAH, J.) (B.N. KARIA, J.) Siji Page 5 of 5 HC-NIC Page 5 of 5 Created On Tue Aug 15 03:07:24 IST 2017