MAGESTI C PREMISES PRIVATE LIMITEDversusASSISTANT COMMISSIONER OF INCOME TAX AND ANR

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                              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                         CIVIL APPELLATE JURISDICTION

                                         WRIT PETITION NO.3318 OF 2022

                      Magestic Premises Private Limited                    .. Petitioner

                                Versus

                      Assistant Commissioner of Income Tax,
                      Central Circle-2, Thane & Anr.                       .. Respondents

                           Mr.K. Gopal a/w Neha Paranjpe, Akhilesh Deshmukh,
UTKARSH
KAKASAHEB                  Advocates for the Petitioner.
BHALERAO
Digitally signed by
UTKARSH KAKASAHEB
BHALERAO
                           Mr.Ashok Kotangle a/w Suresh Kabra, Kishore
Date: 2026.02.21
15:19:11 +0530
                           Walanju, Nikhil Kamble, Advocates for the Respondents.

                                          CORAM     : B. P. COLABAWALLA &
                                                      FIRDOSH P. POONIWALLA, JJ.
                                          DATE      : FEBRUARY 17, 2026

                      P. C.



                      1.            Rule. Respondents waive service. With the consent of

                      parties, Rule made returnable forthwith and heard finally. The above

                      Writ Petition is filed challenging the notice issued under Section 148

                      dated 12th January 2021 and the order dated 2 nd December 2021

                      disposing of the objections filed by the Petitioner to the reasons for

                      reopening the assessment. The assessment year in question is A.Y.2013-

                      14.

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2.          The Return of Income for A.Y.2013-14 was filed on 26 th

December 2013 declaring a total income of Rs.17,50,690/-. Thereafter a

notice under Section 142(1) dated 29 th December 2015 was issued to the

Petitioner raising certain queries with respect to cash deposits in

various bank accounts as well as certain other issues. On 7 th January

2016 the Petitioner files its response to the above notice explaining the

cash deposits and its source. Thereafter, on 29 th February 2016, during

the course of assessment, a detailed explanation was sought by the

Assessing Officer with respect to the transfer of Transferable

Development Rights (TDR). The explanation with reference to the

transfer of TDR was not to the satisfaction of the Assessing Officer, and

therefore, whilst passing the Assessment Order under Section 143(3), an

addition of Rs.1,34,87,990/- was made on account of the profit from

sale of TDR. What is important to note is that the Assessing Officer

made no addition with reference to the query raised by him regarding

the cash deposits. In other words, the explanation furnished by the

Petitioner for the cash deposits was accepted by the Assessing Officer

whilst passing the Assessment Order dated 29 th February 2016 [under

Section 143(3) of the Act].



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3.           Be that as it may, against the said Assessment Order, the

Petitioner preferred an Appeal before the CIT (Appeals). The CIT

(Appeals) partly allowed the Appeal of the Petitioner vide its order dated

9th March 2022 and upheld the addition [with reference to profit from

sale of TDR] to the extent of Rs.1,03,83,721/-. Being dissatisfied with

the order of the CIT (Appeals), the Petitioner approached the ITAT. The

ITAT, vide its order dated 30 th November 2022, deleted the entire

addition made on account of the transfer of TDR.



4.           In the interregnum, the impugned notice dated 12 th January

2021 under Section 148 was issued to the Petitioner. On 11 th February

2021 the Petitioner, through its letter, requested Respondent No.1 to

provide a copy of the reasons recorded. The reasons for reopening were

accordingly furnished to the Petitioner on 28 th June 2021. On 20th July

2021 the Petitioner filed its objections to the reasons recorded. Finally,

the order disposing of the objections was passed on 2 nd December 2021,

a copy of which was provided to the Petitioner on 17 th February 2022. It

is in this light that the present Petition was filed by the Petitioner on 7 th

March 2022 challenging the notice issued under Section 148 as well as

the order disposing of the objections.



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5.               From the record we find that the reasons recorded for

reopening the assessment [for A.Y.2013-14] are from page 96 onwards.

The first reason for reopening reads as under:-

          “As pointed out in the above table there is clerical mistake in working
          of change in inventory which should be at Rs.14,62,97,393 instead of
          Rs.14,62,61,640/- which resulted into under assessment of income by
          Rs.35,752/- (Rs.1,35,23,742 – Rs.1,34,87,990) (Rs.14,62,97,392 –
          Rs.13,27,73,650 = 1,35,23,742).”



6.               As far as this reason is concerned, we find that the reasons

for reopening the assessment appears to be some clerical mistake in the

working of the change in inventory, and which according to the

Assessing Officer, has resulted into as under assessment of Rs.35,752/-.

As far as this reason is concerned, we find that as on date, the said

reason does not survive for the simple reason that this entire addition

has been deleted by the ITAT vide its order dated 30 th November 2022

referred to by us above. This is not even disputed by the Revenue. We,

therefore, find this reason today does not survive for reopening the

assessment.



7.               The second reason for reopening the assessment was that

there were certain cash deposits that have been made during the year

totaling to Rs.5,11,47,000/-. The Assessing Officer was of the view that

according to the Assessee, cash deposits were made out of opening Cash
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in hand of Rs.5,74,72,858/- as per the cash book (which included

additional income offered in the last assessment year). According to the

Assessing Officer, from the cash book it was clear that it had been

prepared to justify the expenditure of Rs.14,46,19,165/- and income

earned of Rs.1,55,14,891/-. The Assessing Officer observed that neither

any major amount was credited nor other amounts debited in the cash

book. In light of these facts the Assessing Officer opined that to justify

the expenses, the Assessee had made the said cash deposits in banks,

out of his unexplained cash in hand of Rs.5,74,72,858/-, which were

nothing but unexplained cash credits and deposits in the hands of the

Assessee under Section 68 of the Act. For the sake of convenience the

reason for reopening assessment on this ground by the Assessing Officer

is reproduced hereunder:-


          “2.2 Underassessment of Income: On perusal of the records, it is
          observed the following cash deposits have been made during the year in
          the Bank accounts maintained which are as under:
          Kotak Mahindra Bank           Rs.89,05,000 (17 April 2012 to 8 Dec 2012)
          NKGSB Bank                    Rs.3,49,41,000 (7 April 2012 to 8 March 2013)
          CIB details                   Rs.73,00,000 (8 Sept 2012 to 8 March 2013)
          Total                         Rs.5,11,47,000


          In this respect, the assessee submitted that cash deposits were made out of
          opening Cash in hand of Rs.5,74,72,858 as per the cash book (which
          includes additional income offered in the last assessment year), it is clearly
          seen from the cash book, the cash book has been prepared to justify the
          expenditure of Rs.14,46,19,165/- and income earned of Rs.1,55,14,891/-. It
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          is observed neither credited any major amount nor debited other amount to
          the cash book. In the light of these facts as such to justify the expenses the
          assessee has made the said cash deposits in the banks out of its unexplained
          cash in hand of Rs.5,74,72,858/- which are nothing but unexplained cash
          credit and taxable in the hands of assessee u/s 68 of the Act.”


8.               As mentioned earlier, there was a scrutiny assessment in

the case of the Petitioner which was undertaken by the Assessing

Officer. In that scrutiny assessment, a specific query was raised [in the

questionnaire] about the cash deposits that were made in each of the

banks. In relation to each of these banks the Petitioner was asked to

furnish the source of the cash deposit made as mentioned in the table of

the questionnaire. In reply to this query, the Petitioner gave its

explanation, and which can be found page 57 of the paper book. Against

each of the entries mentioned in the questionnaire, an explanation was

given, namely, that the amount deposited was out of the cash balance

available in the cash book which was duly recorded in the books of

accounts. Alongwith this explanation, the Petitioner also enclosed a

copy of the cash book for the verification by the Assessing Officer. This

exercise was done not only with reference to Kotak Mahindra Bank and

NKGSB Bank, but also with reference to cash deposits as per the CIB

details. After examining all this material, the Assessing Officer, being

satisfied with the explanations furnished, did not make any addition in


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relation to the cash deposits in the scrutiny assessment proceedings

under Section 143(3).



9.           On perusing all this material, we fail to understand how the

Assessing Officer has now come to the conclusion that there was any

failure on the part of the Petitioner to disclose fully and truly all

material facts in the original scrutiny proceedings. As mentioned earlier,

in the original scrutiny proceedings, a specific query was raised by the

Assessing Officer in relation to the cash deposits and a sufficient

explanation was given in relation thereto. In fact, even the cash book

was produced before the Assessing Officer (during the scrutiny

proceedings) for verification. It is after examining the cash book, as well

as the explanations given by the Petitioner, that the Assessing Officer

chose not to make any addition in relation to these cash deposits. Once

these are the facts, the Assessing Officer, in reassessment proceedings,

could not have come to the conclusion that there was any failure on the

part of the Petitioner to fully or truly disclose all facts in relation to the

cash deposits. To our mind, the present case is nothing but a mere

change of opinion on the part of the Assessing Officer to re-open the

assessment for A.Y.2013-14. It is now too well settled that a mere

change of opinion cannot be a ground for reopening the assessment.

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10.           In these circumstances, we find that the Petition succeeds

and is allowed in terms of prayer clause (a) which reads thus:-

      “(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 including a writ in the nature of ‘certioraris’ calling
           for the records of the case and after satisfying itself as the
           legality thereof quash the notice under section 148 of the Act
           issued by the Respondent No.1 dated 12.01.2021 being Exhibit-
           ‘F’ and the order dated 02.12.2021 being Exhibit ‘N’ as bad in
           law.”


11.           Rule is made absolute in the aforesaid terms, and the Writ

Petition is also disposed of in terms thereof. However, there shall be no

order as to costs.



12.           This order will be digitally signed by the Private Secretary/

Personal Assistant of this Court. All concerned will act on production by

fax or email of a digitally signed copy of this order.



[FIRDOSH P. POONIWALLA, J.]                        [B. P. COLABAWALLA, J.]




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