Bombay HC dismisses Chhagan Bhujbal’s challenge to re-open an IT assessment – Times of India

MUMBAI: The Bombay high court dismissed a petition filed by Maharashtra minister for food and civil supply Chhagan Bhujbal against assessment proceedings by Income Tax department. The IT office had in March 2019 issued him notice saying income of over Rs 3 crore for 2012-13 had escaped its notice for assessment. Bhujbal challenged the notice.
The HC agreed with submissions made by Walve counsel for IT who said once he has participated in the assessment proceedings, he could not challenge it before the court.
Justice K R Shriram in his order said, “the test to be applied is whether there was reason to believe that income had escaped assessment and whether the assessing officer has tangible material before him for the formation of that belief.
Once a tangible basis has been disclosed for re-opening the assessment, it would not be appropriate for this court to prevent an enquiry whatsoever by the assessing officer. In this case, the reasons indeed disclose what is that tangible material.’’
The HC agreed with Bhujbal’s counsel K Gopal that the IT “commissioner is duty bound to apply his mind to the proposal put up to him for the approval in the light of the material relied upon by the assessing officer and such power cannot be exercised casually, in a routine and perfunctory manner.’’
But the HC added, in Bhujbal’s case there is “nothing to indicate that there was non-application of mind.’’
The IT department had in September 2019 giving reasons for re-opening of the assessment said, Bhujbal had filed returns for 2012-13 declaring total income of around Rs 4 lakh. But, it said “credible information received’’ from the deputy director of Income Tax said “suspect person have defrauded the Maharashtra government by preparing fabricated documents and used them as genuine documents …and gain the developer M/s. K.S. Chamankar Enterprises”.
K Gopal counsel for Bhujbal said the March 2019 notice was “without jurisdiction’’ and did not indicate the amount. Besides, the politician had replied to the IT notice in October 2019 objecting to the re-opening of the assessment. The department rejected the objections and Bhujbal in November 2019 complied with the notice. And on December 11 2019, the IT issued him a notice to show cause why Rs 3 crore –as transaction effected on May 11, 2011 and October 1, 2022 should not be added as taxable income. That’s when Bhujbal moved the HC and was granted a stay on the IT action, on December 19, 2019.
Walve said since Bhujbal had responded to the IT department in November 2019, he could not “suddenly’’ wake up and challenge the proceedings. He said if Bhujbal is aggrieved by the assessment order, he may challenge that order but Bhujbal’s counsel said he had challenged the notice as soon as they got to know the reasons on receiving the December 2019 notice.
The HC saw no reason to intervene or to prohibit the IT department from proceeding further and dismissed Bhujbal’s petition.