Madras High Court
Ayyappan Pillai Kumaresan vs The Income Tax Officer on 12 September, 2022
Author: Anita Sumanth
Bench: Anita Sumanth
W.P.No.24376 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12.09.2022
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.No.24376 of 2022
and WMP Nos.23376 and 23377 of 2022
Ayyappan Pillai Kumaresan
... Petitioner
Vs
The Income tax Officer,
Ward – 1, Nagercoil – 629 001.
... Respondent
Prayer:Writ Petition filed under Article 226 of the Constitution of India, to issue
Writ of Certiorari calling for the records of the respondent in DIN and Letter
No.ITBA/COM/F/17/2022-23/1044271520(1) dated 29.7.2022 and in furtherance
to it, the notice u/s. 148 dated 29.7.2022 issued in Din and Letter
No.ITBA/COM/F/17/2022-23/104427679(1) for the A.Y.2015-16 and quash the
same.
For Petitioner : Mr.T.Vasudevan
For Respondent : Mr.ANR.Jayaprathap
Junior Standing Counsel
1
https://www.mhc.tn.gov.in/judis
W.P.No.24376 of 2022
ORDER
The petitioner has challenged an order passed under Section 148A(d) of the Income Tax Act, 1961 (in short 'Act') issued by the Assessing Officer relating to proceedings for re-assesment for assessment year (AY) 2015-16 (assessment year in question).
2. The petitioner has not filed a return of income for the assessment year in question. The respondent issued a notice under Section 148A(b) on 18.05.2022 on the basis of information received to the effect that the petitioner has purchased immovable property for a sum of Rs.6,74,93,000/- and has also received salary of a sum of Rs.4,50,000/-, but has not filed a return of income for the relevant assessment year.
3. Thus and on the prima facie basis there is escapement of income from assessment, the petitioner was asked to show cause why an order under Section 148A(d) not be passed. In issuing the show cause notice, the respondent refers to the evidences available with him in support of his prima facie belief of escapement of tax.
4. The petitioner, vide response dated 20.05.2022, stated that he is an employee of a company by name Sheng Long Bio-tech (India) Pvt. Ltd. that had 2 https://www.mhc.tn.gov.in/judis W.P.No.24376 of 2022 entered into a long term lease of 99 years with State Industries Promotion Corporation of Tamilnadu Ltd. (SIPCOT). He acceded to the position that, in the documentation entered into by the company with SIPCOT, his Permanent Account Number (PAN) had been used for reporting the transaction. He adopted the stand that despite the aforesaid admitted circumstances, the transaction did not pertain to him at all.
5. In response to the show cause notice, the petitioner filed a return of income only on 31.05.2021 offering not just the salary income of Rs.4,50,000/- earned from Sheng Long Bio-tech (India) Pvt. Ltd., but a sum of Rs.15,08,081/- earned as a salary income from another entity, by name UPEC (India) Foods Private Limited, as well.
6. Thus, it is clear that there had been escapement of income to tax insofar as even salary income admittedly received by the petitioner had not been offered to tax by him at the first instance and this would not have come to light had notice under Section 148A(b) not been issued. In fact, the tax deducted at source does not cover the tax due for the year and the return filed along with tax computation pursuant to receipt of notice under Section 148A(b) establishes this position categorically.
3 https://www.mhc.tn.gov.in/judis W.P.No.24376 of 2022
7. Upon consideration of the reply filed by the petitioner, the impugned order under Section 148A(d) has come to be passed reiterating that the agreement filed had, indeed, contained the PAN of the petitioner. At paragraphs 2 and 3, the Assessing Officer states as follows:
2. Assessee vide its reply stated that the assessee is an employee of a company M/s.Sheng Long Bio-tech (India) Private Limited and for the FY 2015-16 the company had entered into a long term lease of 99 years with SIPCOT by making a payment of Rs.6,51,79,400/- for construction of factory by the said company.
Being a Project Officer, assessee had signed in agreement and his PAN may be used by the company for this transaction etc.
3. It is to be noted that the details and data shown by the assessee is for the FY 2015-16 relevant to AY 2016-17. The issues involved in this case is relevant for the FY 2014-15 relevant to the AY 2015-16 and hence the reply filed by the assessee is irrelevant and therefore, it is considered that THIS IS A FIT CASE for reopening u/s.147 of the IT Act 1961 for the reasons stated above.
8. The Officer categorically states that the details set out by the petitioner relate to financial year 2015-16, relevant to assessment year 2016-17, whereas the issue raised by the officer in this case would be relevant to financial year 2014-15, relevant to assessment year 2015-16.
9. Thus, on the basis of the discussion as above, he proceeds to issue notice under Section 148A of the Act holding it to be a fit case for reopening of 4 https://www.mhc.tn.gov.in/judis W.P.No.24376 of 2022 assessment. Necessary approvals have also been obtained that have not been challenged.
10. On the basis of the discussion as above, I find absolutely no infirmity in the order that has been passed assuming jurisdiction for re-assessment. After all the proceedings on merits involve the appreciation and determination of various relevant facts and it is very clear from the discussion as above that the petitioner has not (i) filed his return when taxable income had been received, (ii) not paid the tax on the salary income earned and (iii) utilised his PAN for sale transaction involving consideration of Rs.6.74 crores (approx) that had not been reported by him.
1. The reference to the judgment of the Hon'ble Supreme Court in the case of Calcutta Discount Company Limited V. Income Tax Officer (41 ITR 191) does not advance the case of the petitioner in the least. My attention is drawn to paragraph No.27, wherein the Hon'ble Supreme Court has opined that an assessee must not be subjected to a lengthy process of assessment where it was clear that the Assessing Officer had assumed jurisdiction without any authority.
2. 5 https://www.mhc.tn.gov.in/judis W.P.No.24376 of 2022 Dr.ANITA SUMANTH,J.
12. In the present case, I am of the categoric view that there is no lacuna in the assumption of jurisdiction by the Assessing Authority and there is no infirmity that is made out in this regard. For all the aforesaid reasons, the impugned order is upheld and this Writ Petition, dismissed. No costs. Connected Miscellaneous Petitions are also dismissed.
sl 12.09.2022
Index : Yes
Speaking Order
To
The Income tax Officer,
Ward – 1, Nagercoil – 629 001.
W.P.No.24376 of 2022
and WMP Nos.23376 and 23377 of 2022
6
https://www.mhc.tn.gov.in/judis