The assessing officer is empowered to invoke section 147 of the Income Tax Act, if there is reason to believe that the income chargeable to tax has escaped assessment, even in cases where no assessment orders are passed under sub clause (4) to section 144C of the Act.

JUDGMENT

(Prayer: Appeal filed under Clause 15 of Letters Patent against the Order dated 16.07.2021 passed by the learned Judge in W.P. No. 28176 of 2018.)

R. Mahadevan, J.

The appellant/assessee has filed this intra-court appeal, challenging the order dated 16.07.2021 passed by the learned Judge in W.P. No. 28176 of 2018.

2. The case put forth by the appellant before the writ court would run thus:

(i) The appellant is a company engaged in the business of design, manufacture, supply, erection and installation of lifts and supply, erection and installation of escalators, besides engaged in maintenance of erected elevators and escalator. For the Assessment year 2013-2014, the appellant filed their return of income on 29.11.2013 admitting a taxable income of Rs.196,13,24,550/-. Along with the same, they also enclosed Form No.3CEB disclosing the international transactions that they had during the previous year. On scrutiny of the return of income, as there were overseas transactions involved, the assessing officer referred the matter to the Transfer Pricing Officer (TPO) as contemplated under section 92CA(1) of the Income Tax Act (in short, “the Act”) on 31.08.2015. The said Transfer Pricing Officer, in turn, issued a notice dated 08.09.2015 under section 92CA(2) calling upon the appellant to furnish certain information. In response, the appellant, through their representative, submitted the documents sought for by the Transfer Pricing Officer.

(ii) The Transfer Pricing Officer, by his report dated 31.10.2016, recommended an upward adjustment of Rs.25,73,41,261/- towards international transactions effected by the appellant. On receipt of the same, the Assessing Officer passed a draft assessment order dated 30.12.2016, as required under Section 144C of the Act, which was served on the assessee on 03.01.2017. Even though the draft assessment order was received by the appellant, they did not file any objection before the Assessing Officer within 30 days as required under Section 144C(2) of the Act. Similarly, the assessing officer also did not pass further orders within the period of limitation. Thereafter, notice dated 27.03.2018 under Section 148 of the Act was issued by the Assessing Officer, after expiry of the period of limitation to proceed further on the basis of the report submitted by the Transfer Pricing Officer. In response, the appellant filed their return electronically on 19.04.2018 and subsequently, sent a letter dated 20.04.2018 seeking the reasons for reopening the assessment. The respondent also sent a communication dated 20.08.2018 intimating the reasons for reopening the assessment.

(iii) On receipt of the communication dated 20.08.2018, the appellant submitted their objections vide letter dated 14.09.2018 on the ground that due to the failure on the part of the assessing officer to complete the assessment in time, the appellant cannot be made to suffer. Notwithstanding the objection so raised, the Assessing Officer issued a notice under section 143 (2) of the Act requiring the appellant to attend an enquiry in the office of the assessing officer on 09.10.2018 with all documentary evidence. Accordingly, the representative of the appellant appeared and produced the required documents. However, the assessing officer passed an order of rejection dated 11.10.2018 stating that there is no irregularity or illegality in issuing the notice under Section 148 of the Act for taking up the assessment with respect to the provisions of section 153 of the Act.

(iv) Assailing the order dated 11.10.2018 passed by the respondent, the appellant preferred Writ Petition bearing No. 28176 of 2018 stating inter alia that the reopening of assessment is illegal and beyond the scope of jurisdiction.

3. The learned Judge, on appreciation of the rival submissions, dismissed the aforesaid writ petition by observing that the power of reopening under section 147 of the Act cannot be restricted