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2018 Supreme(Mad) 444
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DURAISWAMY, J.
Mala Exports Corporation, Rep by Partner V. Sadasivam – Appellant
Versus
The Assistant Commissioner of Income Tax, Circle-XV, Chennai – Respondent
W.P. No. 10666 of 2006
Decided on : 23-02-2018
Advocate Appeared:
For the Petitioner:R. Thiagarajan, Senior Counsel for V. Sanjeevi, Advocate.
For the Respondent: Hema Muralikrishnan, Senior Standing Counsel.
The central legal point established in the judgment is the importance of following the directions of the Income Tax Appellate Tribunal and adhering to the principles of natural justice in conducting assessments under the Income Tax Act.
Headnote:
Certiorari - Income Tax - Section 132, Section 143(3), Section 263 - The court discussed the provisions of Section 132, Section 143(3), and Section 263 of the Income Tax Act. The court emphasized the importance of following the directions of the Income Tax Appellate Tribunal and the principles of natural justice in conducting assessments. The court set aside the impugned order and remanded the matter for fresh consideration, directing the respondent to furnish all relevant documents and provide an opportunity for cross-examination.
Fact of the Case:
The petitioner filed a Writ Petition to quash the assessment order dated 30.03.2006, alleging that the assessment was completed without following the directions of the Income Tax Appellate Tribunal and in violation of principles of natural justice.
Finding of the Court:
The court found that the impugned order was passed without following the directions of the Income Tax Appellate Tribunal and erroneously following earlier orders that were set aside. The court concluded that the assessment was conducted in violation of principles of natural justice.
Issues: The main issue was whether the assessment order dated 30.03.2006 was valid, considering the failure to follow the directions of the Income Tax Appellate Tribunal and the violation of principles of natural justice.
Ratio Decidendi: The court held that the respondent should have followed the directions of the Income Tax Appellate Tribunal and provided the petitioner with an opportunity for cross-examination. The court emphasized the importance of adhering to the principles of natural justice in conducting assessments.
Final Decision: The Writ Petition was allowed, and the impugned order dated 30.03.2006 was set aside. The matter was remitted back to the respondent for fresh consideration, with directions to furnish all relevant documents and provide an opportunity for cross-examination.
1. The petitioner has filed the above Writ Petition to issue a writ of certiorari to call for the records of the respondent relating to the assessment order dated 30.03.2006 in respect of the Assessment Year 1987-88 and quash the same.
2. It is the case of the petitioner that there was a search and seizure under Section 132 of the Income Tax Act in relation to the transaction during the year 1985-86 (Assessment Year 1987-88) on 13.12.1988. The petitioner's assessment was completed for the Assessment Year 1987-88 under Section 143(3) of the Income Tax Act on 27.03.1989. Thereafter, under Section 263 of the Income Tax Act, the assessment was reopened on 13.09.1989.
2.1. Against the order of reopening of the assessment, the petitioner filed an Appeal before the Income Tax Appellate Tribunal on 01.12.1989. While the said Appeal was pending, the reassessment was completed and an order was passed on 31.03.1992. Challenging the same, the petitioner filed an Appeal before the Commissioner of Income Tax (Appeals) on 28.04.1992. On 21.09.1992, the Income Tax Appellate Tribunal passed the order in the Appeal filed against the order of reopening of the assessment stating that when fresh assessment was made, the assessee was not given the copies of the statement recorded behind the back of the assessee and further directed to give opportunity of hearing.
2.2. Pursuant to the order of the Tribunal, the Commissioner of Income Tax (Appeals), by order dated 16.02.1993, remanded the matter to the Assessing Officer directing the Officer to record the statements from V.Subramaniam and V.K.Berlia, the Author of the Agreement dated 04.12.1985. Pursuant to the order of remand passed by the Commissioner of Income Tax (Appeals), the Assessing Officer recorded the statement of V.Subramaniam on 10.09.1993. However, the Assessing Officer has not recorded the statement of V.K.Berlia. On 30.07.2003, the Commissioner of Income Tax (Appeals) passed the final order in the Appeal preferred by the petitioner, confirming the assessment order dated 31.03.1992.
2.3. The petitioner contended that the Assessing Officer and the Commissioner of Income Tax (Appeals) had not followed the directions of the Income Tax Appellate Tribunal, dated 21.09.1992, in not recording the statement of V.K.Berlia. As against the order passed by the Assessing Officer dated 31.03.1992, which was confirmed by the Commissioner of Income Tax (Appeals), the petitioner filed a Second Appeal to the Income Appellate Tribunal.
2.4. By order dated 16.06.2004, the Income Tax Appellate Tribunal set aside the orders of the Commissioner of the Income Tax (Appeals) and the Assessing Officer and allowed the Appeal and remanded the matter to the Assessing Officer with certain directions.
2.5. On 20.02.2006, the respondent issued a letter calling for a hearing on 23.02.2006. On receipt of the notice, the petitioner sent a letter dated 21.02.2006 to the respondent to fix another date for hearing as their Auditor was away from India. Since no reply fixing any hearing date was fixed, on 14.03.2006, the petitioner himself voluntarily appeared in person before the respondent and requested to furnish all the documents relied upon and provide opportunity for cross examination. On 16.03.2006, the petitioner was furnished with copies of some of the seized documents from Wavin. The petitioner filed a petition under Section 144-A of the Income Tax Act to the Additional Commissioner of Income Tax on 20.03.2006. On 27.03.2006, the petitioner filed his objections, along with a number of relevant documents and notes. The petitioner also filed the details sought for by the respondent on 28.03.2006. Thereafter, by order dated 30.03.2006, the respondent completed the assessment and passed the impugned order without following the directions of the Income Tax Appellate Tribunal and in violation of principles of natural justice. The petitioner has filed the above Writ Petition.
3. The respondent, in their counter, has sta
