Commissioner Of Income Tax,Corporate Circle – 3Chennai v. M/S.tamil Nadu Urban Finance & Infrastructure Development Corporation Limited

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 04.12.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN andTHE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.No.411 of 2018 Commissioner of Income Tax,Corporate Circle – 3Chennai.... Appellant/Respondent Vs M/s.Tamil Nadu Urban Finance & Infrastructure Development Corporation Limited,No.460/1-2, Anna Salai, Nandanam,Chennai 600 035PAN: AAACT1259R... Respondent/Appellant PRAYER : Appeal under Section 260-A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras“C” Bench, dated 27.07.2017 passed in ITA.No.1315/MDS/2015,against the order of the Commissioner of Income Tax (Appeals)-II, Chennai, dated 26.02.2015 for the assessment year 2006-07 inold ITA No.2059/2013-14, New ITA No.731/CIT (A)-II/2013-14 andagainst the assessment order of the Assistant Commissioner ofIncome Tax Company Circle-III (1), Chennai-34 dated 28.11.2008vide GIR No./PA:AAACT1259R/31023-T for the assessment year2006-07. (Judgment of the Court was delivered by N.KIRUBAKARAN, J) This Tax Case Appeal has been preferred by the Revenueagainsttheorderdated27.07.2017passedinITA.No.1315/MDS/2015 on the file of the Income Tax AppellateTribunal, Chennai 'C' Bench for the assessment year 2006-07. https://hcservices.ecourts.gov.in/hcservices/ 2.The appeal was admitted on 29.06.2018 on the followingsubstantial questions of law : “(i)Whether the Tribunal is right in quashing the re-opening assessment order under Section 147 though thecase was re-opened as per Explanation (2)(c)(iv) toSection 147 for excessive allowance computed? (ii)Whether the Tribunal was right in holding that theassessment cannot be reopened unless the negligence ison the part of the assessee though the income hasescaped from assessment within the meaning underExplanation (2)(c)(iv) to Section 147?" 3.Mr.M.Swaminathan, learned Senior Standing Counsel wouldsubmit that the assessment order was passed under Section 143(3)of the Income Tax Act, 1961 on 28.11.2008 and notice for re-opening the assessment under Section 148 of the Income Tax Act,1961 was ordered on 30.03.2013 and re-assessment order has beenpassed on 17.01.2014, by which the Assessment Officer found thatthe assessee is eligible to allowance only to the tune ofRs.4,43,21,439/- as against the allowance of Rs.5,05,10,900/-.The said assessment order was challenged before the Commissionerof Income Tax (Appeals) by the assessee and the appeal waspartly allowed. The said order was challenged before theAppellate Tribunal by the assessee. The assessee's appeal wasallowed by the Tribunal stating that no material was brought onrecord by the Assessment Officer and as per proviso to Section147 of the Income Tax Act, 1961, there should be negligence onthe part of the assessee in furnishing material required forcompleting the assessment. Only if there is a failure on thepart of the assessee, the six years limitation period could beinvoked whereas in this case, the original assessment order waspassed on 28.11.2008 and notice for re-opening the assessmentwas issued on 30.03.2013 which is exactly six years. Sincethere are no fresh materials available and there is nonegligence on the part of the assessee, the question of re-opening does not arise. Therefore, the Appellate Tribunalrightly allowed the assessee's Appeal. Accordingly, thesubstantial questions of law are answered. 4.Even though Mr.M.Swaminathan, learned senior standingcounsel would try to justify the issuance of re-opening noticeunder Section 148 of the Income Tax Act, 1961 and rely uponExplanation (2) (c) (iv) of Section 147, there is no freshmaterial brought on record to issue notice for re-opening theassessment. 5.In similar circumstances, this Court has also decided thematter in the same way in TCA.No.765 of 2019 on 22.11.2019. 6.Accordingly, the Appeal fails and the same is dismissed.No costs. 4.Even though Mr.M.Swaminathan, learned senior standingcounsel would try to justify the issuance of re-opening noticeunder Section 148 of the Income Tax Act, 1961 and rely uponExplanation (2) (c) (iv) of Section 147, there is no freshmaterial brought on record to issue notice for re-opening theassessment. 5.In similar circumstances, this Court has also decided thematter in the same way in TCA.No.765 of 2019 on 22.11.2019. 6.Accordingly, the Appeal fails and the same is dismissed.No costs. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar sai To 1.The Commissioner of Income Tax, Corporate Circle – 3, Chennai. 2.Income Tax Appellate Tribunal 'C' Bench, Chennai. Chennai. 3.The Commissioner of Income Tax (Appeals)-II Chennai. Chennai. 4.The Assistant Commissioner of Income Tax, Company Circle III (1), Chennai-34. Company Circle III (1), Chennai-34. +1cc to Mr.G.Baskar, Advocate Sr No.101468 (15/11/2021) T.C.A.No.411 of 2018 AKII (CO)PR (22/09/2021)