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2019 Supreme(Mad) 2334
IN THE HIGH COURT OF JUDICATURE AT MADRAS
K. Ravichandrabaabu, J.
Doosan Bobcat India Private Limited (Formerly known as Doosan Infracore India Private Limited), Rep. by its Chief Financial Officer, Kibong Nam, Chennai - Petitioner
Versus
Deputy Commissioner of Income Tax, Corporate Circle-1(1), Chennai & Others - Respondent
W.P. No. 539 of 2018 & W.M.P. Nos. 32917 & 649 of 2018
Decided On : 21-11-2019
For the Petitioner:N.V. Balaji, Advocate.
For the Respondents: Hema Muralikrishnan, Senior Standing Counsel.
The Court emphasized the importance of availing the alternative appellate remedy and raising all points before the Appellate Authority, rather than challenging the order of assessment directly before the Court.
Headnote:
Income Tax - Assessment Order - Section 143(3), Section 147 - Summary
Fact of the Case:
The petitioner, a Private Limited Company, filed a return of income for the Assessment Year 2010-11 declaring a loss. The Assessing Officer issued a notice under Section 148 of the Income Tax Act for reassessment, alleging false information regarding the date of audit report.
Finding of the Court:
The Court found that the petitioner repeatedly furnished a wrong date of audit report, which prima facie did not appear to be inadvertent. The Court directed the petitioner to file a regular appeal against the impugned order of assessment before the Appellate Authority.
Issues: Reopening based on change of opinion, limitation, and violation of principles of natural justice.
Ratio Decidendi: The Court held that the issue of wrong input in the return of income by incorporating a bogus date for completion of the Audit Report under Section 44AB had no connection with the disclosure of materials. The Court also emphasized that the question of whether the wrong committed by the assessee in referring to the date of the audit report would affect the assessment proceedings is a matter to be considered and decided by the next fact-finding authority.
Final Decision: The Court directed the petitioner to file a regular appeal against the impugned order of assessment before the concerned Appellate Authority within a period of four weeks from the date of receipt of the order.
JUDGMENT :
Prayer: Writ petition filed under Article 226 of the Constitution of India for issuance of a writ of certiorari to call for the records on the file of the second respondent and quash the impugned order passed by the second respondent in PAN:AACCD6529L dated 12.12.2017 along with notice in PAN: AACCD6529L dated 31.03.2017 in Letter No.ITBA/AST/S/148/2016-17/1003811296(1) issued under Section 148 of the Income Tax Act for the assessment year 2010-11.
1. This writ petition is filed challenging the assessment order dated 12.12.2017 passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961 along with notice dated 31.03.2017 issued under Section 148 of the Income Tax Act.
2. The case of the petitioner is as follows:
It is a Private Limited Company and an assessee before the respondent Department. The petitioner filed a return of income for the Assessment Year 2010-11 under Section 139(1) of the Income on 08.10.2010 declaring loss of Rs.17,30,25,913. The original return was filed within the due date. On the date of filing of the return, the petitioner did not get its account audited and had sought approval from the Registrar of Companies for extending the time limit to hold its Annual General Meeting. The petitioner was required to file an electronic return of income and such electronic return would get uploaded only when all the mandatory fields are filled, one such being the details of audit under section 44AB of the said Act. Since the petitioner was liable for audit under Section 44AB of the said Act, the online return could not be uploaded without filling details of the audit return. Therefore, the petitioner mentioned the date of audit report as 29.09.2010, an adhoc date to enable the online filing of the return. The accounts of the petitioner were eventually audited under the Companies Act, 1956 and subsequently under Section 44AB of the said Act on 12.01.2011. Based on the tax audit report dated 12.01.2011, the petitioner filed a revised return on 05.02.2011 declaring loss of Rs.10,93,69,356/-. The first respondent passed an order under Section 143(3) of the said Act dated 13.03.2014, accepting the loss declared in the revised return. During the course of assessment proceedings, the petitioner provided all the material information required for the purpose of assessment, including the tax audit report and Auditor's report under the Companies Act. The first respondent later issued the impugned notice under Section 148 of the said Act dated 31.03.2017. In response to the said notice, the petitioner filed these return of income on 21.04.2017. They also sought for furnishing reasons for reopening through its letter dated 26.04.2017. The reasons were furnished through proceedings dated 15.06.2017. The petitioner filed their objections against the reopening on 02.08.2017. The Assessing Officer rejected the objections by proceedings dated 29.09.2017. Consequently, the Assessing Officer issued notice under Section 143(2) of the said Act dated 27.10.2017 for scrutiny for reassessment under Section 147 of the Act. Thereafter, the impugned reassessment order under Section 143(3) read with 147 of the Act was passed on 12.12.2017. Subsequent to the notice issued under Section 143(2), no further opportunity was provided or notice of hearing was issued to the petitioner. Hence, the impugned order of assessment violates the principles of natural justice. The reopening is made after the expiry of four years from the end of the assessment year 2010-11. The notice under Section 148 is served after the end of the four years from the end of the assessment year 2010-11. Since the petitioner had truly and fully disclosed all material facts necessary for the purpose of assessment in the course of original assessment, the limitation of four years as provided in the first Proviso to Section 147 is attracted. The reasons p
