VINAYAK BUILDERS Vs. BD GARSAR (OR) SUCCESSOR

JUDGEMENT

(1.) By way of filing the present petition under article 226 of the Constitution of India, the petitioner has challenged the notice dated April 11, 2001, issued by the respondent seeking to reopen the petitioner's assessment for the assessment year 2000-01 as illegal and contrary to the provisions of the law and without jurisdiction. The petitioner, a registered firm, filed its return of income for the assessment year 2000-01, on August 1, 2000, declaring total income of Rs. 11,143 which was accepted by the respondent on February 19, 2001, vide intimation issued under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The petitioner received the impugned notice dated April 11, 2001 and, therefore, the petitioner addressed a letter dated April 23, 2001, asking for the reasons for issuance of the impugned notice and reopening the assessment for the assessment year 2000-01. The respondent addressed a letter dated May 8, 2001, wherein without supplying the reasons for reassessment, stated therein that the request for the supply of reasons for reopening will be considered on the receipt of return of the income as envisaged in the notice dated April 11, 2001.

(2.) Mr. S.N. Soparkar with Ms. Bhumi Thakore, learned advocate for the petitioner, submitted that the notice issued under section 148 of the Act is illegal and contrary to the provisions contained under section 148 of the Act. The learned advocate for the petitioner submitted that notice under section 148 of the Act can be issued if the Assessing Officer has reason to believe that the income chargeable to tax has escaped assessment. It is settled principle that the words "reason to believe" suggest that the belief must be that an honest and reasonable person based upon the reasonable ground and not a mere change of opinion, suspicion, gossip or rumour and the belief must lead to the conclusion that income has escaped assessment. It is submitted that the Income-tax Officer, Ward No. 2, Junagadh, recorded the reasons as under :

(3.) Learned advocate for the petitioner submitted that the reopening of the assessment is based on the survey operation under section 133A of the Act and it was carried out by the Assistant Commissioner of Income-tax, Junagadh. Learned advocate submitted that the decision rendered by the apex court in the case of Asst. CIT v. Dhariya Construction Co., 2010 328 ITR 515, squarely applies to the facts of the present case and the opinion given by the District Valuation Officer is not per se information for the purpose of reopening an assessment under section 147 of the Income-tax Act, 1961. The learned advocate submitted that in view of the aforesaid ratio laid down by the apex court, the present petition deserves to be allowed and the order issuing the notice at annexure A to the petition, which is under challenge, be quashed and set aside.