KALPATARU STHAPATYA (P.) LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) BY way of present petition under Article 226 of the Constitution, the petitioner -assessee questioned the legality of assumption of jurisdiction by respondent -Income Tax Officer under section 147 read with section 148 of the Income tax Act, 1961, and prayed to quash and set aside notice dated 18.03.2011 issued by the respondent to reopen the assessment for Assessment Year 2005 -2006

(2.) SETTING out the relevant facts of the case, the petitioner -assessee was engaged in the business of development and construction of real estate. The petitioner developed a housing project known as 'Sheth Nagar' at Jamnagar road, Rajkot. In the return of income for Assessment Year 2005 -2006 filed on 28.10.2005, the petitioner -assessee declared total income of Rs. 19,479/ -, and inter alia claimed deduction under section 80 -IB(10) of the Income Tax Act, 1961 (hereinafter referred to as' the Act' for sake of brevity) for Rs. 11,50,649/ - in connection with the profit earned from that project. The return was initially processed under section 143 of the Act. Thereafter, the case was taken up for scrutiny and notice dated 29.9.2007 under section 143 (2) came to be issued, which was served on the petitioner on 9.10.2006. Another notice along with a questionnaire was issued on 7.9.207, and served on the assessee on 12.09.2007. The assessment order under section 143 (3) was passed5.12.2007.

(3.) LEARNED Senior Counsel Mr. S. N. Soparkar assisted by Mrs. Swati Soparkar appearing for the petitioner submitted that the respondent erroneously exercised powers to reopen the assessment after four years as the petitioner -assessee had duly disclosed all the material facts regarding its claim for deduction. It was submitted that there was no failure on part of the petitioner to fully and truly disclose the facts, and hence, reopening after four years was not permissible in any case. It was submitted that after taking into account the relevant facts, the Assessing Officer allowed deduction under section 80 -IB(10), and thus, now on the same facts, the power was being exercised which was impermissible in law being against conditions circumscribed under sec. 147 and in particular, in the First proviso to that section.