Dilip Gangaram Patil v. ACIT

Case snapshot

Sections / provisions: 147; 148; 263

Questions before the Court / Tribunal

• See the source-driven case record below.

Material facts and background

under Section 148 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2013-14. Brief facts : 3.

The petitioner is engaged in the business of real estate and has

filed his return of income on 27 September 2013 declaring total income of Rs.54,91,960/-. On 31 December 2015, an assessment order under Section 143(3) of the Act came to be passed accepting the return income. Proceedings u/s 263 : 4.

On 29 November 2017, a notice under Section 263 of the Act

came to be issued by the Commissioner of Income Tax on the ground that M/s. Orchid Builders and Developers has sold 6 flats on behalf of the petitioner for Rs.2,74,94,950/-. However, the same is not reflected in the profit and loss account for the year ending 31 March 2013. The notice further seeks to examine disallowance on account of interest payment and proposes to examine income from house property which was not offered for tax. The petitioner filed his reply to the said show cause notice vide letter dated 1 March 2018. On 16 March 2018, an order under Section 263 was passed by the Commissioner of Income-tax

setting aside the assessment order with a direction to conduct proper inquiries, investigation and examine all the issues raised in 263 notice and pass a fresh order. Pursuant to the said direction, Assessing Officer on, 14 December 2018, passed an assessment order under Section 143 (3) read with Section 263 assessing income of the petitioner at Rs.57,06,250/- by making additions on account of notional rent under the head ‘income from house property.’ Proceedings u/s 148 : 5.

On 25 March 2021, a notice under Section 148 of the Act was

Appellant / assessee submissions

Ms. Pawar, learned counsel for the petitioner submits that in the

We have heard learned counsel for the petitioner and respondent

The learned counsel for the petitioner is justified on relying upon

the decision in the case of Samet Estates (P.) Ltd. (Supra) where on very similar ground where 263 proceedings were initiated, reopening was quashed by Co-ordinate bench of this Court. The learned counsel for the petitioner is justified in stating that the decision in the case of Kalyanji

Revenue / respondent submissions

Mr. Sharma, learned counsel for the respondent defended the

Court / Tribunal analysis and reasoning

sought was subject matter of not only proceedings under Section 263 of the Act but also an order passed pursuant to the directions under Section 263 of the Act and, therefore, the impugned proceedings are based on change of opinion. She further submitted that the reliance placed by the respondent on the Supreme Court’s decision in the case of Kalyanji

Commissioner of Income-tax2. Therefore, she submitted that the impugned notice should be quashed. 9. 1

was set aside by the PCIT in revisional proceedings under Section 263 of the Act vide order dated 16 March 2018. The assessing officer passed a fresh assessment order pursuant to the direction issued under Section 263 of the Act on 14 December 2018. Therefore, the original assessment dated 31 December 2015 which is sought to be reopened did not exist on the date of recording the reasons and, therefore, on this ground itself the proceedings are bad in law. The assessing officer glossed over the assessment order passed under Section 143(3) read with Section 263 of the Act on 14 December 2018 which was the order in existence on the date of recording reasons and sought to reopen the assessment order which was not in existence. 14.

reopening are identical to the reasons for which revisional proceedings under Section 263 of the Act were initiated by the PCIT on 29 November 2017. The said revisional order under Section 263 of the Act was passed on 16 March 2018 directing the assessing officer to examine the issues raised in the revisional proceedings and pass a fresh order. Therefore, on the same ground the assessing officer is not justified to reopen the case, moreso, after a period of 4 years. In our view, even the approving authority should not have given his approval after he himself having passed the order under Section 263 of the Act. Therefore, even on this ground since the issues were subject matter of 263 proceedings, the impugned proceedings are barred by 3rd proviso of Section 147 of the Act. 15.

disclosure of material facts necessary in the assessment but, what were the material facts which were not disclosed has not been stated. On perusal of the reasons recorded it is observed that the officer himself has

recorded that it is based on the perusal of records and verification of records that reopening proceedings are initiated. In our view, on this ground also the pre-condition required of failure to disclose truly and material facts necessary for the assessment is not satisfied and therefore, the proceedings are bad in law as per the proviso of Section 147 of the Act. 16.

the officer states that the reopening is permissible if in the original assessment the Assessing Officer has through inadvertence oversight given relief. In our view, if that be the case, then, certainly no proceedings could have been initiated by the respondent by virtue of first proviso to Section 147 of the Act because according to the respondent, it is the mistake of the predecessor Officer and, therefore, the issue of any failure to disclose fully and truly all necessary facts for the assessment by the petitioner would not arise. In any case, pursuant to the direction under Section 263 of the Act, the Assessing Officer examined all the issues which are also subject matter of the present proceedings and passed the assessment order on 14 December 2018. Therefore, any attempt now to re-agitate the issues which were already examined while passing the assessment order pursuant to directions in 263 proceedings would be based on change of opinion and review of the earlier order which is not permissible. 17.

Operative decision and relief

the Act for the assessment year 2013-14 dated 25 March 2021 is quashed and set aside. The Rule is made absolute in the above terms. Writ Petition No.2021 of 2022 :19.

notice under Section 148 of the Act dated 25 March 2021 for the assessment year 2014-15 is also quashed and set aside. 20.

Authorities and precedents appearing in the judgment

• No reliable precedent list was extracted automatically; use the full judgment for the citation chain.

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on the statutory and factual issues recorded above. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Income Tax. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Reconstruct the reassessment timeline: original assessment, section 148A notice/reply, approval authority, notice date and the applicable section 149 limitation window.
• Preserve the complete response to section 148A(b), objections and proof of disposal; jurisdictional defects are often decided from the documentary chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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