Amended Vide Order Dated 01.12.2023 Made In W.m.p v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.12.2023 CORAM THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY W.P.Nos.5394, 24733 & 12844 of 2022 (3 cases) and W.M.P.No.5488, 23670 & 12309 of 2022 W.P.No.5394 of 2022 Mercedes Benz Financial Services India Private Limited,Represented by its Managing Director, Brendon Sissing,Address 5[th] Floor, Plot 8,Baassyam Willow Square 9 and 10, First Street,Thiru Vika Industrial Estate,Guindy, Chennai – 600 032. ... Petitioner (Amended vide order dated 01.12.2023 made in W.M.P.No.33494 of 2022 in W.P.No.5394 of 2022 by KRJ) Vs. 1. The Deputy Commissioner of Income Tax, Corporate Circle-1(1), Chennai – Wanaparthy Block, Aayakar Bhavan, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. Page 1 of 13 https://www.mhc.tn.gov.in/judis 2.Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance, Room No.401, 2[nd] floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi- 110 003. ... Respondents Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorari, calling for the records in DIN & Letter No.ITBA/AST/F/17/2021-22/1038839611(1) dated 18.01.2022 on the file of the respondents relating to the A.Y. 2016 – 17 and quash the same. W.P.Nos.24733 & 12844 of 2022 Mercedes-Benz Financial Services India Private Limited,Represented by its Managing Director, Brendon Sissing,Address: 5[th] Floor, Plot 8,Baashyam Willow Square 9 and 10,First Street, Thiru Vika Industrial Estate, Guindy, Chennai – 600 032. ... Petitioner in both W.P's (Amended vide orders dated 27.01.2023 and 22.02.2023 made in W.M.P.Nos.33495 & 33501 of 2022 in W.P.Nos.24733 & 12844 of 2022 by AQJ) vs. 1.Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Page 2 of 13 Ministry of Finance, Room No.401, 2[nd] floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi- 110 003. 2.The Deputy Commissioner of Income Tax, Corporate Circle-1(1), Chennai – Wanaparthy Block, Aayakar Bhavan, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. ... Respondents in both W.P's Prayer in both W.P's: Writ Petitions filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorari, calling for the records in DIN & Letter No.ITBA/PNL/S/271(1)(c)2021-22/1042255469(1) and ITBA/AST/S/1472021–22/1042255130(1) dated 31.03.2022 respectively on the file of the 1[st] respondent relating to the A.Y. 2016-17 and quash the same. For Petitioner: Mr.G.S.D.Babu [in all W.P's] For Respondents : Mr.B.Ramanakumar Senior Standing Counsel [in all W.P's] Page 3 of 13 https://www.mhc.tn.gov.in/judis COMMON ORDER Totally, there are three Writ Petitions. However, since the issue involved in these Writ Petitions is interconnected, the same were heard together and disposed of vide this Common Order. 2.So far as W.P.No.5394 of 2022 is concerned, the same has been filed challenging the impugned order dated 18.01.2022 passed by the respondent, whereby, the objections filed by the petitioner came to be rejected. 2.1Insofar as W.P.No.24733 of 2022 is concerned, the same has been filed challenging the notice issued by the respondent under Section 274 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), whereby, penalty was imposed on the petitioner. 2.2 In W.P.No.12844 of 2022 the challenge is to the notice of demand issued by the respondent under Section 156 of the Act. Page 4 of 13 3. The learned counsel appearing for the petitioner would submit 2.So far as W.P.No.5394 of 2022 is concerned, the same has been filed challenging the impugned order dated 18.01.2022 passed by the respondent, whereby, the objections filed by the petitioner came to be rejected. 2.1Insofar as W.P.No.24733 of 2022 is concerned, the same has been filed challenging the notice issued by the respondent under Section 274 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), whereby, penalty was imposed on the petitioner. 2.2 In W.P.No.12844 of 2022 the challenge is to the notice of demand issued by the respondent under Section 156 of the Act. Page 4 of 13 3. The learned counsel appearing for the petitioner would submit that the grievance of the petitioners' is that re-assessment order has been passed under Section 167 of the Act, without taking into consideration of the Commercial Paper for Deal No.93, for the AY 2016-17 was repaid. There was an audit objection and for the said audit objection, a reply was also filed and the scrutiny was given by the Deputy Commissioner stating that the commercial paper pertaining to Deal no.93, for a sum of Rs.150 crores was erroneously missed out. Further, the said commercial paper was issued on 24.06.2015 and redeemed on 15.09.2015. Therefore, without taking into consideration of the aspect that the closing balance of Commercial Paper for the Financial Year 2015-16 would remain unaltered and the amount of Rs.150,00,00,000/- pertaining to the Commercial Paper Deal No.93 same would be reflected only if the said amounts remains unpaid at the end of the Financial Year i.e. 31.03.2016. A reply was sought from the petitioner and the petitioner has also filed the following reply/statement dated 25.03.2022 through the Banks wherein they have annexed the following working commercial paper. Page 5 of 13 Page 6 of 13 Page 7 of 13 3.1. The learned counsel by referring to the above Tabulated Column would submit that Deal no.93, pertaining to the claim of Rs.150 crores has been inadvertently ommissioned and hence, these impugned orders came to be passed. If the said error has occurred due to inadvertency, then, the Officials can reply for the audit objections with regard to the difference as falsely stated issuing Rs.150 crore commercial paper in the year 2015 on 24.06.2015 and redeemed on 15.09.2015. However, in the reply it has not been mentioned and therefore, the impugned orders came to be passed as if it is not redeemed. But the fact remains that the said commercial paper pertaining to a sum of Rs. 150 crores has been issued and redeemed on the same year and therefore, it will not appear in the closing balance of Commercial Papers for the Financial Year 2015-16. Therefore, the said sum of Rs.150 Crores cannot be reflected in the closing balance. 4. The learned Senior Standing Counsel for the respondent would contend that if the respondent-Department proceeds on the basis that the value mentioned in Deal No.93 of the Commercial Paper pertaining to the AY 2016-17 was not redeemed, and in the event, if it is added to the closing Page 8 of 13 W.P.No.5394, 24733 and 12844 of 2022 balance, then, automatically, the profit would increase. The learned senior standing counsel would also submit that since the petitioner, in their reply, has failed to furnish any details that the claim of Rs.150 crores pertaining to Deal No.93, has been inadvertently ommissioned under the working sheet and such other details as to when it was redeemed, there is an error apparent on the part of the petitioner, and that is the reason, why, the impugned orders came to be passed against them. 5. Heard both sides and also perused the materials available on record. Page 8 of 13 W.P.No.5394, 24733 and 12844 of 2022 balance, then, automatically, the profit would increase. The learned senior standing counsel would also submit that since the petitioner, in their reply, has failed to furnish any details that the claim of Rs.150 crores pertaining to Deal No.93, has been inadvertently ommissioned under the working sheet and such other details as to when it was redeemed, there is an error apparent on the part of the petitioner, and that is the reason, why, the impugned orders came to be passed against them. 5. Heard both sides and also perused the materials available on record. 6. On a perusal of records, it appears that the petitioner issued the commercial paper for a sum of Rs.150 crores on 24.06.2015 and the same was redeemed on 15.09.2015, which pertains to the deal No.93. However, when the petitioner has filed a reply to the show cause notice dated 25.03.2022, nothing has been mentioned with regard to the deal no.93. Therefore, since the petitioner failed to furnish any details with regard to the ommission and commission of the claim of Rs.150 crores pertaining to Deal No.93, the Officers-respondents took into consideration that the same has not been redeemed, and in such event, if it is added to the closing balance, then, Page 9 of 13 automatically, the profit would increase and accordingly, the impugned orders have been pased. 6.1 However, since the officers-respondents accepted the fact that the commercial paper in deal no.93 to the value of Rs.150 crores was redeemed as early as on 15.09.2015 then, the question of increasing the closing balance by Rs.150 crores does not arise, the respondents shall take into consideration that the commercial paper pertaining to the aforesaid value has been redeemed on 15.09.2015. 7. In the light of the above, this Court passes the following order:- (i)The impugned assessment orders dated 18.01.2022 and 31.03.2022 are set aside. (ii)The respondents are directed to consider the Deal no.93 which was issued and redeemed to the extent of Rs.150 crores on 24.06.2015 and 15.09.2015 respectively, after providing an opportunity of personal hearing to the petitioner and thereafter, pass the appropriate orders within a period of 2 months from the date of receipt of a copy of this order. Page 10 of 13 Accordingly, the writ petitions stands disposed of. No costs. Consequently, connected miscellaneous petitions are closed. vedaInternet:YesIndex : Yes / No 01.12.2023 3/3 To 1.The Deputy Commissioner of Income Tax, Corporate Circle-1(1), Chennai – Wanaparthy Block, Aayakar Bhavan, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. 2.Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance, Room No.401, 2[nd] floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi- 110 003. 3.The Deputy Commissioner of Income Tax, Corporate Circle-1(1), Chennai – Wanaparthy Block, Aayakar Bhavan, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. Page 11 of 13 Page 12 of 13 https://www.mhc.tn.gov.in/judis KRISHNAN RAMASAMY, J. veda W.P.Nos.5394, 24733 & 12844 of 2022 (3 cases) 01.12.2023 3/3 W.M.P.No.33494 of 2022 in W.P.No.5394 of 2022 Krishnan Ramasamy,J., This Writ Miscellaneous Petition is filed by the petitioner seeking for amendment of the prayer in the main Writ Petition. Heard both sides. Having satisfied with the reasons set out in the affidavit filed in support of the Miscellaneous Petition, this Petition is allowed. 01.12.2023 (1/3) veda Note :Office is directed to carryout the amendment in the causetitle of the Writ Petition before issuing the order copy. Page 13 of 13 https://www.mhc.tn.gov.in/judis