Karnataka High Court
The Asst. Commissioner Of Income Tax vs M/S Mphasis Ltd on 24 January, 2023
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
-1-
WA No. 919 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JANUARY, 2023
PRESENT
THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE G BASAVARAJA
WRIT APPEAL NO. 919 OF 2019 (T-IT)
BETWEEN:
Digitally signed
by YASHODHA N 1. THE ASST. COMMISSIONER OF INCOME TAX
CIRCLE-4(1)(2), ROOM NO.230
Location: HIGH
COURT OF 2ND FLOOR, BMTC DEPOT BUILDING
KARNATAKA 80 FEET ROAD, KORAMANGALA
BENGALURU-560 095
2. THE JOINT COMMISSIOENR OF INCOME TAX
SPECIAL RANGE-4, ROOM NO.245, 2ND FLOOR
BMTC DEPOT BUILDING, 80 FEET ROAD
KORAMANGALA
BENGALURU-560 095
3. PRINCIPAL COMMISSIONER OF INCOME TAX-4
BMTC BUILDING
KORMANGALA 6TH BLOCK
BENGALURU-560 085 ...APPELLANTS
(BY SHRI. E.I. SANMATHI, STANDING COUNSEL)
AND:
M/S. MPHASIS LTD.
BAGAMANE WORLD TECHNOLOGY CENTRE
WTC-3, 1ST FLOOR
K.R.PURAM, MARATHAHALLI OUTER RING ROAD
DODDANEKUNDI
BANGALORE-560 048
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WA No. 919 of 2019
(REPRESENTED BY ITS
EXECUTIVE VICE PRESIDENT
& CFO MR. VENKATASUBRAMANIAN
SURYANARAYANAN) ...RESPONDENT
(BY SHRI. T. SURYANARAYANA, SENIOR ADVOCATE FOR
MS. TANMAYEE RAJKUMAR, ADVOCATE)
THIS WRIT APPEAL FILED IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED
14.02.2019 IN WRIT PETITION NO.3533/2019(T-IT) PASSED BY THE
HON'BLE LEARNED SINGLE JUDGE.
THIS WRIT APPEAL, COMING ON FOR FINAL HEARING, THIS DAY,
P.S.DINESH KUMAR J., DELIVERED THE FOLLOWING:
JUDGMENT
This intra Court appeal by the Revenue is directed against the order of this Court dated February 14, 2019 in W.P.No.3533/2019 allowing assessee's writ petition.
2. Heard Shri E.I.Sanmathi, learned Standing Counsel for the appellant-Revenue and Shri T.Suryanarayana, learned Senior Advocate for the respondent-Assessee.
3. Briefly stated the facts are, a notice under Section 148 of the Income Tax Act, 19611 was issued by the Revenue on 23.03.2018 (Annexure-B). The assessee sought for the reasons by its communication dated 10.04.2018 1 'The Act' for short -3- WA No. 919 of 2019 (Annexure-C). Without passing the preliminary order, the Assessing Officer2 has passed the final assessment order on 28.12.2018. The assessee challenged the same in the instant writ petition and the petition has been allowed. Feeling aggrieved, Revenue has filed this appeal.
4. Shri Sanmathi submitted that reasons were sought by the assessee on 10.04.2018 and reasons were given on 28.09.2018. Assessee wrote to the A.O. stating that it had not received the communication dated 28.09.2018. Hence, the assessee was called upon for hearing on 18.12.2018 and a copy of the communication dated 28.09.2018 containing the reasons was given. The assessee submitted its objection on 20.12.2018 and it was discussed with the assessee on the same day. In view of paucity of time, final assessment order was passed on 28.12.2018.
5. In substance, Revenue's case is, though reasons were made known to the assessee on 28.09.2018, the assessee did not file objections, but pleaded non-receipt of 2 'AO' for short -4- WA No. 919 of 2019 reasons only during the hearing on 18.12.2018. Thereafter, the assessee filed its objection and the same was discussed and assessment order was passed. According to him, it is a curable defect under Section 292(B) of the Act. Placing reliance on Home Finders Housing Ltd. Vs. Income Tax Officer3 he submitted that Hon'ble Madras High Court in the said case has remanded the matter to the A.O. He submitted that SLP filed against the said order has been dismissed. With these submissions, he prayed for allowing this appeal.
6. Shri T.Suryanarayana though did not dispute that in the case of Home finders, the matter was remanded to the A.O., submitted that as held this Court in Deepak Extrusions (P) Ltd. Vs. Deputy Commissioner of Income Tax, Central circle 1(4), Bangalore, the mandatory procedure for disposal of objections by the A.O. before proceeding with assessment has not been followed. He argued that said finding has been given after considering the authority in G.K.N.Driveshafts (India) Ltd. Vs. Income Tax Officer4 and in view of the 3 (2018) 404 ITR 0611 (MAD) 4 (2003) 259 ITR 19 -5- WA No. 919 of 2019 authority in Deepak Extrusions, this appeal does not merit any consideration and there are no extraordinary reasons to take a view different from the view in Deepak Extrusions. With these submissions, he prayed for dismissal of this appeal.
7. We have carefully considered rival submissions and perused the records.
8. In this case, the following dates are relevant:
notice was issued on 23.03.2018; assessee has sought for reasons on 10.04.2018 (Annexure-C); the order sheet maintained by the A.O. produced by the Revenue, shows that assessee's representative appeared before the A.O. on 18.12.2018 and A.O has recorded thus:
"The Assessee was told that notice u/s 148 had been issued on 23rd March 2018 and the same was duly acknowledged and replied to by the Assessee vide letter dated 10th April 2018 though Under Protest as mentioned in the letter head. The reasons for reopening was duly intimated vide this Office letter dated 28.09.2018 and the same was handed over to the Company officials at the time of hearing requesting them to furnish their reply by 20.12.2018. In the absence of reply it was intimated that the hearing would be concluded as per -6- WA No. 919 of 2019 the material available on record without according any more opportunity thereof"
the next date was 20.12.2018. The order sheet recorded by the A.O. on the said date is also relevant and it reads as follows:
"The A/R, Shri. Abhay Ruia appeared on behalf of the company and stated that they had filed their submission in this regard. The submission was perused and case discussed. The main issue pertains to reopening u/s 147 and the disallowance matter, and the same was addressed in detail during the hearing"
The matter was discussed and heard in full to the satisfaction of A/R with both company representatives and the AO having made clear their respective stand."
9. The above order shows that the A.O has heard the company representatives with regard to objections. Annexure-E is the objection filed by the assessee. We have carefully perused the same and assessee has taken a specific stand in the objection that after seeking reasons on 10.04.2018, it had again sought for the reasons on 12.12.2018. It appears that after receipt of the letter dated 12.12.2018, the A.O. has called the assessee for final hearing keeping in view the paucity of time. No explanation is -7- WA No. 919 of 2019 forthcoming as to why the reasons were not furnished, though it is an admitted position that reasons were sought as back as in April 2018. The order sheet and assessment order clearly indicate that entire proceeding has been hurriedly completed between 18.12.2018 and 28.12.2018 in order to complete the same within the time limit i.e. 31.12.2018.
10. The main contention urged by Shri Sanmathi is that it is a curable defect and Hon'ble Gujarath High Court in Banaskantha District Oilseeds Growers Co-op Union Ltd. Vs. Assistant Commissioner of Income Tax5 & the Hon'ble Madras High Court in Home finders Housing Ltd., have remanded the matter to the A.O. for reconsideration. We may record that this Court by following the authority in GKN Driveshafts has held that procedure is mandatory. The dates and events recorded by us hereinabove clearly indicate that from April 2018 to December 2018, the A.O has not taken any action which is more or less similar in the case of Deepak Extrusions. The Hon'ble single Judge has rightly noticed in para 8 of the impugned order that by no stretch of imagination, it could be 5 2015 taxman.com 50 -8- WA No. 919 of 2019 held that speaking order is passed by the A.O considering the objection raised by the assessee. The writ petition has been allowed by following the decision in the case of Deepak Extrusions. This is an intra-court appeal. There is no patent error to interfere with the view taken by the Hon'ble Single Judge more so, when a Division Bench of this Court following an authority of the Hon'ble Supreme Court of India has held that provision is mandatory in nature.
11. In view of the above, this appeal must fail and it is accordingly dismissed.
No costs.
Sd/-
JUDGE Sd/-
JUDGE YN List No.: 1 Sl No.: 67