M/S Bemco Hydraulics Ltd vs Deputy Commissioner Of Income Tax on 20 September, 2008

[Cites 9, Cited by 0]

Karnataka High Court

M/S Bemco Hydraulics Ltd vs Deputy Commissioner Of Income Tax on 20 September, 2008

Bench: Anand Byrareddy

IN THE HIGH COURT OF KARNATAKA

CIRCUIT BENCH AT DHARWAD

DATED THIS THE 20?}! DAY OF SEPFEMBF§R,2{i(}é   A'

BEFORE'  

THE HONBLE MR.JUS'I'ICE .€£:~;Ai=i:)" JiE3Y':I?A I§ E,DDY;.:"'~.ﬁ 'i

wan' PETITION N¢~.. j_§_562[A.2007.[ﬁ1"'f_I;i;j""' 

BETWEEN:

M/s Bemco   *

Udyambag,  % 

Bclgatflm.   _V  _' 

Rcpresmltexi    "  

General --Managc1f---   ~ < é «'

S/0 Bapusaheb Patti}, 

Ageﬁ about 58"ysars. ..Pctitioner

'V    Senior Clounsel for Smt.Van;i H. Adv.)

  

1.   Commissioner of
incpme Tax, Cixcked,
Beigaum.

 _ "   . 5Asst. Commissioner of

Income Tax, Circle-I,
Belgaum. ..Respondc3:1ts

(By Sri. K. V. Aravind for Sri.M.V. Scshachala, CGSC)

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This writ petition is ﬁled under Articles 226 and'??? of
the Constitution of India praying to quash the :1ot;i<:eT
section 148 dated 20.12.2006 issued by the reagxzndent in

1e-assess the income for the assessment year  j€rizi_e" _

Annexure--C, and etc.

B~gmup, this day, the Court madezethei  =   ~

This mt petition coming onvftii'  

The petition coming on   in B-
grcrund is taken up forvfiiaal    

 «_  learned Senior Counsel
for Smt.'«ii;<.~1'_jiA~ Id,  the petitioner and Sri.K. V.

  appearing for Sri. MV. Scshachala,

  'V   fejspondcnt

  are as follows:

A  'I'1_;e'  is a Company carrying on business at

 In mspcct of the assessment ywrs 1998-99, the

V."V'petii2:&}13ser had ﬁled income Tax Returns with a nzport under

   44«-AB ofthe Income Tax Act, 1961. The petitienefs

 income as declared in the return was not accepted and

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certain additions were made by way of prima facic
adjustments vide intimation dated 19.3.1999 ﬁsued _}_;nder

section l43(1)(a) of the Income Tax Act, 1961.5'

petitioner being aggrieved by this intimation   

before the Commissioner of Income    'A "

who by his order dated 4.9.2009   

Aggricved by this, the pessoa{e;.e;c   *

before the Income Tax    Bench,
Panaji. The appeal'   'sf by order dated

27. 1 . Q 9'    helsi  foﬁowsz

 V' 'W':  the ﬁzvai submissions.

The  mpresentaﬁve for the
,5.251ssessee'is.V:eor1jz:*:ct in his submission that the
 9 "the A0 in making adjustment
  9.1:112;;i.cz'*' 143(1) does not extend to the
   are of debatable nature or which
  examination into factual or legal aspects

A sfﬁihc case. In the present case, the assesses
 'T  had credited a sum of Rs.6,67,361/- to the Proﬁt
9  Gr. Loss Account on sale of building. It was
claimed by the assesses in 3 written note ﬁled
along with the xetum of income that the
aforesaid entzy was made under a mistaken

3



impression. The said entry  A' 

subsequently reversed. The issue,  'M 

1equmed' cxam1na' tion into the   '-the   

assessec. in our view, the édju{3maé3ﬁt.xnade   A'

the A0 is clearly outsidg: = of  
143(1), if the A0  {o.. 
mater, he shank; havcAi%roi;awe4 rm; 
prescribed by   under
section 143(2). The  made
under   t}1cz§c2 foz=e, stand.
The   _Ii}<f::paqt£nt;sﬁi'i§a:i"'é1uthoﬁﬁes in
this   set aside. mg

 

Assiéésg    free to take such
gigﬁbn  ﬁe  in Law to tsrin.s,..m
afofcsaﬁi ;-to tax." (underlining for

 

--._.....-....-man-n-an-ua-u.u«

  <':1:;;phasis)  " "

  the porﬁon underlined in the above

(ﬂier,  section 148 of the Act was issued on

 for the assessment year 1998-99. In reply to the

 k.   thc petitioner hm ﬁled objections to prim' anly'

 that the respondent had no jmisdiction to issue the

hitiotice since the 'l'ribuna1 has not given any ﬁndings or directions as such. It was ftlrther urged that the procﬂings under Section 150 of the Act wen: not callw for. E interim order by this court for stay of further proceedings. The respondents have proceeded to complete assessment and have also passed order of m--asseés1nen.t:'e' Notwithstanding the same, the learned Senior submit that the Income Tax Act, 1961}, iv e of limitation in respect of the escaped asse$smen.t"ef being brought to tax under 147 ef the income Tax Act, 1961. to take refuge, as aforesaid, of the Tribune! to take such action as may be the aforesaid amount to tax, doesu nottéhaxxfe. the teaﬁeét of extending the period of the-re \eas'"no' pmceeding in respect of eueh nseesement The reading. of section 150 and snb¥Seeiisnn 153 cannot be pressed into sexvice Iespenctente in seeldng to contend that the proceedings within time.

5{ The learned Senior Counsel would take this . ' " elaborately through the provzisionsto substantiate the circumstances and it is further emphasised that it is not in 5 serious dispute, that in terms of Section 149 _ reassessment were barred by time. it is u upon the observation of the iv e deparment has proceeded as 8f01'&3as.8.i(i &';;('l"' submit that the action is without ~ that there is no direction the period of limitationetood to invoke the being taken in under section 159 or _of Iﬁcweme Act.

6. Cojn&a.,"'V V Aravind, learned Counsel _ for the "m_ej>endent~department, woum vehemently direction is a clear indication that the its have proceeded under section 143(2). The ii.=a,p1;.@.:2«;:1:"<A)bse1va1:iQn made under section 143 oouki _. , fﬂﬁtn be sustained and that it was open for the to take appropriate action, which Wonk! clearly that there was every liberty provided to the iespondents to initiate appropriate action, which they have done well within the time from the date of the order. Hence, 6 Secﬁon 150 of the Income Tax Act speciﬁcally _ such a situation. If there is no '_vfo"r«:the u tenor of section 150 of the Income Act; .A proceedings for re-assessment wéts«._}jve1l7wi_tf1in limitation, there was no to initiate such action. It 1ap§e-. time enabling the respondents to wk'.-ﬁon that the observation is 'V 7, ._ the assessment of income «em: escaped assessment is in relation to the ' of petitioner for a panic' ' ular _. .assess:znent~ year: " proceedings under section 143(1) to be bad', does not preclude the xeepo'ndent-;£iepan*tnxent from proceeding as directed by the V anﬁ't.ﬁerefore, it can only be construed as direction N K 'take appropriate acﬂtwn, and further the respondents re-assessment pmceedings there is no Vt for interference by this Court. The xemedy of the " " petitioner is, to take recourse to the pmvisbns for appeal under the Income Tax Act and the present proceedings are 3 an abuse of process of the court and hence be A' with costs.

8. Having given my if rival contentions, from a bf ﬂ1:=._ % Appellate 'I'ribunal, whichjs qu9tcd 3}crei;:1 be said that the there is 4 to enable the respondents 'tiic impuwed notice. The contraxy is ﬁalacious xm; gs at the outset is without p s said to have been the peﬁon is allowed.

all consequent proceedings are held are quashed.

Si'-1/F:

Iud§3 " Sub]

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