Raimaladitya Textile Pvt Ltd v. ITO

Case snapshot

Sections / provisions: 147; 148 & 151

Questions before the Court / Tribunal

• Mistake in Recorded reason- No reason to believe – Approval u/s 151 is mechanical. A mistake in recorded reason could certainly not be the reason to believe that petitioner’s income has escaped assessment. Approval under Section 151 of the Act also has been given on the same reasons, which would also indicate total non application of mind by not only the JAO but also by the Revenue Head who had recommended the case to the Principal CIT and also Principal CIT himself. One thing is evident that the approval is granted in a mechanical way without applying their
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

1/3 950-WP-2199-2021.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2199 OF 2021 Raimaladitya Textile Pvt. Ltd. ….Petitioner V/s. Income Tax Officer 4(3)(1), Mumbai and Ors. …Respondents ---- Mr. Rahul Hakani a/w Mr. Ajay Singh i/b Mr. Sameer G. Dalal for Petitioner. Mr. Anil C. Singh, ASG a/w Mr. Sham V . Walve for Respondents-Revenue. ---- CORAM : K.R. SHRIRAM & N. R. BORKAR, JJ. DATED : 22nd MARCH, 2022 P .C. : 1. The pleadings in the petition are complete and therefore we decided to consider the petition finally at this stage itself. 2. Petitioner has approached this court aggrieved by a notice dated 31st March, 2021 issued under Section 148 of the Income Tax Act, 1961 (the Act) where the Jurisdictional Assessing Officer (JAO) has asserted that he has reasons to believe that petitioner’s income chargeable to tax for A.Y. 2013-14 has escaped assessment within the meaning of Section 147 of the Act. The reasons recorded for coming to such a belief can be found in a letter dated 2nd June, 2021 addressed by the JAO to petitioner. The reasons read as under : Issues as per reasons recorded for reopening The Income Tax Department has collected information about taxpayers from various sources such as Annual Purti Parab

2/3 950-WP-2199-2021.doc Information Return (AIR), Central Information Branch (CIB), Tax Deduction at Source (TDS) Statement and information uploaded by Investigation Wings/Central Circle/I & CI on Insight Portal. As per the information summary available in Insight Portal, the following information relating to Assessment Year 2013-14 pertains to the assessee company. Sr. No. Source of PAN Source of PAN Name Information F .Y. Information Type Information Value 1 AABCR3382E RAIMALADITYA TEXTILE PRIVATE LIMITED 2012-13 Loan Taken 40,88,06,800/- 1. As the above mentioned bogus entities managed, controlled and operated by M/s. RAIMALADITYA TEXTILE PRIVATE LIMITED for providing bogus accommodation entries, hence, all the transactions entered into between the above mentioned entities and the assessee/beneficiary are bogus accommodation entries in nature. 3. The allegations in the reasons recorded are that as per information summary available to Revenue there is company by the name Raimaladitya Textile Pvt. Ltd., from whom bogus loan has been taken in F .Y. 2012-13 in the sum of Rs.40,88,06,800/- and the said Raimaladitya Textile Pvt. Ltd., provided bogus accommodation entries and hence all the transactions entered into between the said entity and petitioner are bogus accommodation entries in nature. But what is strange is petitioner itself is Raimaladitya Textile Pvt. Ltd., the assessee. It is incomprehensible that petitioner would provide bogus accommodation entries to itself by loan having been given to itself which amount therefore has escaped assessment. 4. Learned ASG submitted that there was a mistake. If that was a mistake that could certainly not be the reason to believe that Purti Parab

3/3 950-WP-2199-2021.doc petitioner’s income has escaped assessment. We further note that approval under Section 151 of the Act also has been given on the same reasons, which would also indicate total non application of mind by not only the JAO but also by the Revenue Head who had recommended the case to the Principal CIT and also Principal CIT himself. One thing is evident that the approval is granted in a mechanical way without applying their mind. 5. In the circumstances, petition is allowed in terms of prayer clause – (a) and (b) which reads as under : (a) that this Hon’ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or a writ, calling for the records of the case and after satisfying itself as to the legality thereof quash and set aside the notice dated 31.03.2021 issued by the Respondent No.1 under section 148 of the Income Tax Act, 1961, being Ex.- ‘ J’ hereto; (b) that this Hon’ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or a writ, calling for the records of the case and after satisfying itself as to the legality thereof quash and set aside the order passed by the Respondent No.1 disposing off the objections raised by the Petitioner against the reopening of assessment under section 147 of the Income Tax Act, 1961 dated 26/08/2021, being Ex.- ‘P’ hereto.

6. Petition disposed with no order as to costs. (N. R. BORKAR, J.) (K.R. SHRIRAM, J.) Purti Parab

Appellant / petitioner / assessee submissions

The judgment does not separately label this side’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Revenue / respondent submissions

The judgment does not separately label the respondent’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Court / Tribunal analysis and reasoning

The concise order integrates its reasoning with the operative directions. The complete packaged record controls.

Operative decision and relief

The operative relief must be read from the final paragraphs of the complete packaged judgment.

Ratio and legal principle

The narrow proposition associated with Raimaladitya Textile Pvt Ltd v. ITO concerns mistake in recorded reason- no reason to believe – approval u/s 151 is mechanical. a mistake in recorded reason could certainly not be the reason to believe that petitioner’s income has escaped assessment. approval under section 151 of the act also has been given on the same reasons, which would also indicate total non application of mind by not only the jao but also by the revenue head who had recommended the case to the principal cit and also principal cit himself. one thing is evident that the approval is granted in a mechanical way without applying their The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in WRIT PETITION NO. 2199 OF 2021.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Quashed / set aside” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: Mistake in Recorded reason- No reason to believe – Approval u/s 151 is mechanical. A mistake in recorded reason could certainly not be the reason to believe that petitioner’s income has escaped assessment. Approval under Section 151 of the Act also has been given on the same reasons, which would also indicate total non application of mind by not only the JAO but also by the Revenue Head who had recommended the case to the Principal CIT and also Principal CIT himself. One thing is evident that the approval is granted in a mechanical way without applying their Its practical value lies in the way the Bombay High Court connected the governing provisions—147; 148 & 151—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of 147; 148 & 151 and the decision date 2022-03-22; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is Raimaladitya Textile Pvt Ltd v. ITO, the proceeding is WRIT PETITION NO. 2199 OF 2021, and the decision is dated 2022-03-22. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as K.R. SHRIRAM & N. R. BORKAR, JJ.. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with 147; 148 & 151. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Quashed / set aside. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• 147 — apply the exact version considered in the judgment.
• 148 & 151 — apply the exact version considered in the judgment.

Case network

• Adityaraj Builders v. State of Maharashtra — Bombay High Court · Quashed / set aside
• Sanket Vinayak Nagvekar v. ITO — Bombay High Court · Quashed / set aside
• Hero Products India Pvt. Ltd. v. NFAC — Bombay High Court · Quashed / set aside
• Pr. CIT v. Macleods Pharmaceuticals Ltd. — Bombay High Court · Quashed / set aside

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