Gujarat High Court
Maulik Girish Nanavati vs Assistant Commissioner Of Income Tax, ... on 2 July, 2019
Author: Harsha Devani
Bench: Harsha Devani
C/SCA/11265/2019 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11265 of 2019
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MAULIK GIRISH NANAVATI
Versus
ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4(2)
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Appearance:
MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1
for the Respondent(s) No. 1
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CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MR.JUSTICE V. B. MAYANI
Date : 02/07/2019
ORAL ORDER
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. Mr. Tushar Hemani, learned advocate with Ms. Vaibhavi Parikh, learned advocate for the petitioner, has invited the attention of the court to the reasons recorded for reopening the assessment under section 147 of the Income Tax Act, 1961 to submit that merely because on the basis of search conducted in the case of Shri Shailesh Shah and Shri Jignesh Shah it was found that they have been manipulating the scrips of M/s. Parikh Herbals Ltd. / Safal Herbs Ltd. and the petitioner herein has made a transaction of shares in respect of the said scrip in the year under consideration, the assessment of the petitioner is sought to be reopened. It was Page 1 of 3 Downloaded on : Wed Jul 10 01:43:34 IST 2019 C/SCA/11265/2019 ORDER submitted that the statements of Shri Shailesh Shah and Shri Jignesh Shah do not indicate that any accommodation entries were given to the petitioner and no material has been seized, which discloses any connection between them and the petitioner. The details of transactions, such as the number of shares allocated, etc. have not been provided and hence, there is nothing to show that any accommodation entry had been taken by the petitioner.
2. It was submitted that in the present case, what the Assessing Officer seeks to do is to first reopen the assessment and thereafter, try to find out the connection between the petitioner and Shri Shailesh Shah and Shri Jignesh Shah. It was submitted that it is not permissible to reopen the assessment for carrying out a roving and / or fishing inquiry, without any specific finding of escapement of income.
3. It was submitted that the reopening is also bad on the ground that it is based upon borrowed satisfaction on the part of the Assessing Officer who has not applied his mind independently to reach to the conclusion that income chargeable to tax has escaped assessment. It was submitted that the petitioner has traded on the BSE platform and the scrip in question is not banned and it is Page 2 of 3 Downloaded on : Wed Jul 10 01:43:34 IST 2019 C/SCA/11265/2019 ORDER open for anyone to invest in the same. It was submitted that there is no live nexus between Shri Shailesh Shah and Shri Jignesh Shah and the petitioner, without which, the Assessing Officer has no jurisdiction to reopen the assessment.
4. Having regard to the submissions advanced by the learned advocate for the petitioner, issue Notice, returnable on 05.08.2019.
By way of adÂinterim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not frame the final assessment without the prior permission of this Court.
Direct service is permitted.
(HARSHA DEVANI, J) (V. B. MAYANI, J) PRAVIN KARUNAN Page 3 of 3 Downloaded on : Wed Jul 10 01:43:34 IST 2019