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2020 Supreme(Mad) 1880
HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, J.
Maya Appliances Private Limited, Represented by K. Uma Shankar, Senior Manager – Appellant
Versus
Assistant Commissioner of Income Tax, Company Circle 4(1) & Others – Respondents
W.P. No.1212 & 1216 of 2020 & WMP.No.1477 of 2020
Decided On : 08-10-2020
For the Petitioner:Ragavan Ramabadran, Advocate
For the Respondents: Hema Muralikrishnan, Senior Standing Counsel
The central legal point established in the judgment is the requirement of full disclosure of all material particulars in the return of income filed by the assessee to prevent re-assessment beyond the specified period.
Headnote:
Income Tax Act - Re-assessment - Section 147 - Section 143(3) - Section 139 - Section 142 - Section 148 - Section 153
Fact of the Case:
The petitioner filed two writ petitions challenging the rejection of objections to the jurisdiction assumed by the respondent for re-assessment under the Income Tax Act, 1961 for Assessment Year 2012-13.
Finding of the Court:
The court found that the alleged escapement of income was not attributable to non-disclosure of material particulars by the petitioner, and the conditions precedent in the proviso to Section 147 were not attracted in this case.
Issues: The issues included disallowance under section 14A, non-deduction of tax at source under Section 194J, provident fund contribution, legal and professional fees, CSR expenses, employee benefit expenses, and long term capital gains.
Ratio Decidendi: The court relied on the Supreme Court case of ACIT vs ICICI Security Primary Dealership Ltd, which emphasized the requirement of full disclosure of all material particulars in the return of income filed by the assessee to quash the re-assessment proceedings.
Final Decision: The court allowed the writ petitions and quashed the impugned orders rejecting the objections of the petitioner and the order of re-assessment.
JUDGMENT :
(Prayer in WP No.1212 of 2020: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari calling for the final assessment order (Second Impugned Order) passed by the 1st respondent in u/S 143(3) r/w Section 147 in DIN 20121173482 dated 27.12.2019 for the AY 2012-13 and quash the same.
Prayer in WP No.1216 of 2020: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari calling for the records relating to the order disposing objections (First Impugned Order) passed by the 1st respondent in ITBA/AST/f/17/2019-20/1022914389(1) dated 23.12.2019 for the AY 2012-13 and quash the same.)
1. The petitioner has filed these two writ petitions, one challenging order dated 23.12.2019 rejecting the objections of the petitioner to the jurisdiction assumed by the respondent for proceedings in connection with re-assessment under the Income Tax Act, 1961 (in short ‘Act’) for Assessment Year 2012-13, and the second, the order of re-assessment dated 27.12.2019.
2. Proceedings for re-assessment have admittedly been initiated after a period of four years from the end of the relevant year and this is thus, a case, that attracts the proviso to Section 147 of the Act. The provision, to the extent to which it is relevant to this matter, is extracted below:
147. Income escaping assessment:
If the Assessing Officer 3 has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year).
Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year:
........
3. Normally, the time limit for initiation of proceedings for assessment would be four years from the end of the relevant Assessment Year. An additional period of two (2) years is granted in those cases where the original assessment was completed under the provisions of Section 143(3) and the escapement of income has been occasioned on account of the non-filing of the return of income either under Section 139 or under Section 142 by an assessee or on account of the failure of the assessee to have made a full and true disclosure of income at the original instance.
4. In the present case, the petitioner has filed a return of income in time and therefore, the first two conditions are not attracted. The only issue to be examined is whether the alleged escapement of income, if any, is attributable to failure on account of the assessee/petitioner to have made a full and true in disclosure of income in that regard. For this purpose, one would have to examine the reasons on the basis of which jurisdiction has been assumed, and test the same in the light of the enquiry conducted and the responses filed by the petitioner prior to the framing of the original scrutiny assessment.
5. Each issue in the reasons for re-assessment dated 08.03.2019 is extracted with the comparative p
