TULSI DEVELOPERS Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By this petition under Art. 226 of the Constitution of India, the petitioner has challenged the notice dated 5th Feb., 2010 issued by the respondent under s. 148 of the IT Act, 1961 (the Act) reopening the petitioners assessment for asst. yr. 2005-06.

(2.) The petitioner, a partnership firm, submitted a return of income for asst. yr. 2005-06 on 29th Oct., 2005. The return was accompanied by the computation of income and audit report wherein the petitioner had specifically claimed a deduction of Rs. 5,50,000 by way of remuneration to partners and interest to partners of Rs. 2,74,905. During the course of scrutiny assessment under s. 143, the AO sent a questionnaire along with notice under s. 142(1) dated 4th Sept., 2006. The petitioner complied with the requisition by a letter dated 18th Sept., 2006. The AO, thereafter, framed assessment under s. 143(3) of the Act on 10th Oct., 2007 computing the business income at Rs. 22,59,221 and specifically gave deduction of interest of Rs. 2,74,905 and salary to partners of Rs. 5,50,000 and thus computed the total income at Rs. 14,34,316 which came to be rounded off at Rs. 14,34,320.

(3.) Thereafter, the petitioner received the impugned notice dated 5th Feb., 2010 for asst. yr. 2005-06 stating that income had escaped assessment and asking the petitioner to file the return of income. Reasons for reopening also came to be furnished to the petitioner whereupon, the petitioner filed objections to the proposed reassessment by a letter dated 6th April, 2010. The respondent rejected the said objections by an order dated 12th Oct., 2010. After passing the objections disposal order, even before the petitioner received the same, the respondent issued notices dated 14th Oct., 2010 under s. 133(6) of the Act to various parties who had deposits with the petitioner and also reminded them of the provisions of s. 272A(2)(c) in case of non-compliance of s. 133(6) notices. Being aggrieved, the petitioner has filed the present petition challenging the notice issued under s. 148 of the Act as well as the order rejecting the objections, dated 12th Oct, 2010.