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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. SUBRAMANIAM, J.
M/s. Vishwataj Developers Pvt Ltd & Ors. - Petitioners
Versus
Assistant Commissioner of Income Tax, Company Circle V(2) & Ors. - Respondents
W.P. Nos. 1103 and 1104 of 2011 And W.M.P. Nos. 36297 and 36299 of 2018 And M.P. Nos. 1 & 1 of 2011
Decided On : 15-06-2021
Tax Act, 1961 – Sections 68 and 143(3) - Companies Act - Assessment orders - Foreign Investment Implementation Authority - That is the reason why Appellate Authorities are vested with the power to adjudicate the facts and law, so as to provide findings in respect of those mixed question of facts and law - It is admitted that the petitioners-Assessees have not preferred any appeal and moved these writ petitions - Learned Senior Counsel appearing on behalf of writ petitioners strenuously contended that it is case where respondents themselves admitted certain vital facts and those admitted facts were not considered by Assessing Authority and therefore order impugned is liable to be set aside - Petitioners-Company are registered under Companies Act and involved in business to acquire purchase hire or obtain by exchange of any land buildings or other structures for purpose of development and for carrying on developmental activities on such lands buildings or other structures and to rent transfer sell or otherwise dispose of such land buildings structures before or after development - Held, Point raised in this regard are statutory violations - However even such statutory violations can be dealt with by Appellate authorities or Appellate Tribunal - This apart in a writ petition if such orders passed with jurisdictional errors and quashed without any remand then an injustice would be caused to very spirit of Statute enacted for benefit of public at large - Courts are expected to be cautious while granting exoneration of liability merely on ground of jurisdictional errors if any committed by authorities competent - On some occasions jurisdictional errors are committed wantonly or in collusion with assessees knowingly that there is a possibility of escaping from clutches of law - Procedures to be followed in department for assessment is well settled - Writ petitions stand disposed
ORDER :
The assessment orders dated 30.12.2010 passed under Section 143(3) of the Income Tax Act, 1961, are under challenge in these writ petitions.
2. It is admitted that the petitioners-Assessees have not preferred any appeal and moved these writ petitions.
3. The learned Senior Counsel, appearing on behalf of the writ petitioners, strenuously contended that it is the case where the respondents themselves admitted certain vital facts and those admitted facts were not considered by the Assessing Authority and therefore, the order impugned is liable to be set aside.
4. The petitioners-Company are registered under the Companies Act and involved in the business to acquire, purchase, hire or obtain by exchange of any land, buildings or other structures, for the purpose of development and for carrying on developmental activities on such lands, buildings or other structures and to rent, transfer, sell or otherwise dispose of such land, buildings, structures, before or after development.
5. It is contended on behalf of petitioners that the share capital made is in accordance with law and the Ministry of Finance in letter dated 19.05.2008 approved the capital share of the petitioners-Company. Clauses 4 and 22 of the said order reads as under:-
“22. In case of any problem encountered during implementation of this foreign collaboration approval, you are advised to contact Foreign Investment Implementation Authority (FIIA) at email address fiia@ub.nic.in or write to Foreign Investment Implementation Authority, Department of Industrial Policy and Promotion, Ministry of Commerce and Industrial, Udyog Bhawan, New Delhi-110 011.”
6. Relying on the said order passed by the Government of India, petitioners state that there was no illegal flow of money nor the investment is made in an inappropriate manner. When the share capital was made the approval of the Competent Authorities of the Government of India, there is no reason whatsoever to pass the impugned order of assessment contrary to the legality of investments made by petitioners-Company.
7. The learned Senior Counsel, appearing on behalf of the petitioners, relied on the averments made in the counter-affidavit filed on behalf of the respondents on 28.10.2018 and paragraph-3 of the said counter-affidavit reads as under:-
8. In the abovesaid counter, it is stated that during the period March 2007 to April 2008, Rakeen (P) Ltd., Mauritius had received a remittance of 30.95 US$ (Rs.12.75 crores) from its parent company in the UAE viz., Rak Properties PJK UAE and that out of this amount, the Mauritius Company invested in the Share Capital of the Assessees-Company. However, a cursory glance of the financial statement of the UAE Company for the period ending 31.12.2008 indicates that the UAE Company had only invested in the Assessees-Company.
9. Relying on the abovesaid statement, it is contended on behalf of petitioners that the legality of investments has been approved by the
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