Madras High Court
The Commissioner Of Income Tax vs M/S Qatalys Software Technologies Ltd on 29 July, 2008
Bench: K.Raviraja Pandian, P.P.S.Janarthana Raja
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 29.07.2008 CORAM: THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case(Appeal) Nos.1026 and 1027 of 2008 and M.P.No.1 of 2008 in T.C.1027/08 The Commissioner of Income Tax Chennai .. Appellant -vs- M/s Qatalys Software Technologies Ltd, 544, TTK Road, Chennai 18. .. Respondent TAX CASES filed under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, MADRAS 'B' Bench, Chennai dated 03.01.2008 passed in ITA.Nos.1565/1760/Mds/2006 For Appellant : Mr.T.Ravikumar J U D G M E N T
(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J) The revenue on appeal against the order of the Tribunal dated 03.01.2008. The relevant assessment year is 2003-04.
2. The material facts culled out from the statement of facts stated in the memorandum of appeals are as follows:-
The assessee is engaged in the business of software export. For the assessment year under consideration, the assessee company has filed its return of income on 13.11.2003 admitting a total income of Rs.2,34,810/- after claiming deduction u/s 10A in a sum of Rs.3,09,382. The return of income was processed under Section 143(1) on 20.12.2003. Thereafter, notice under section 148 was issued on 05.10.2004. The assessment was reopened under Section 147 as the Assessing Officer was of the view that income chargeable to tax has escaped assessment as the assessee has included interest receipt from bank in a sum of Rs.17,09,661/- in the profits of business eligible for deduction under Section 10A of the Act. Subsequently, the Assessing Officer has issued notice under Section 143(2) and after calling for further details and clarifications, has completed the assessment on 23.12.2005 whereby he has computed the business loss at Rs.3,46,544/- in respect of unit eligible for deduction u/s 10A and brought to tax the interest income mentioned above as 'income from other sources'. The appeal against the order at the instance of the assessee to the Commissioner of Income Tax (Appeals) was not successful, though the point of reopening of assessment has been taken before him. The assessee carried the matter on further appeal to the Tribunal. The Tribunal has taken the issue as to whether the Assessing Officer can take action under Section 148 when the time for issuing notice under Section 143(2) has not been expired. After hearing the parties, the Tribunal held in favour of the assessee on the issue of reopening of the assessment when the time for issuing notice under Section 143(2), was not expired, by following the decision of this Court in the case of CIT VS. K.M.Pachayappan in T.C.A.No.870 of 2007 dated 4.7.2007, wherein this Court has held that no reassessment proceeding could be initiated so long as the assessment proceedings pending on the basis of the return already filed are not terminated. The revenue, aggrieved over that portion of the order, filed the present appeal by formulating the following questions of law:-
"1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that reassessment proceedings are not valid since the assessing officer is barred in initiating the proceedings under section 148 when the time for issuance of notice under section 143(2) had not expired?
2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the appeal by the revenue is infructuous?".
3. We have heard the argument of the learned counsel for the revenue, who submitted that the issue has already been decided against the revenue by the above cited Judgement of the Division Bench of this Court.
4. We have also perused the above referred Judgment of the Division Bench of this Court dated 4.7.2007, wherein it is held as follows:-
"Applying the principles enunciated in the judgments of the Supreme Court as well as the Delhi High Court, cited supra, the Tribunal is right in coming to a conclusion that no action could be initiated under section 147 of the Act, when there is a pendency of the Return before the Assessing Officer. The reasons given by the Tribunal are based on valid materials and evidence and we do not find any error or illegality in the order of the Tribunal so as to warrant interference".
5. Following the said decision, these appeals are dismissed. Consequently, connected miscellaneous petition is also dismissed.
(K.R.P.J.) (P.P.S.J.J) 29.07.2008.
rg Index:Yes/ Internet:Yes To
1. Commissioner of Income Tax, Chennai.
2. Income Tax Appellate Tribunal, "B" Bench, Chennai K.RAVIRAJA PANDIAN,J AND P.P.S.JANARTHANA RAJA,J rg Tax Case(Appeal) Nos.1026 and 1027 of 2008 29.07.2008