East Coast Constructions And Industries (Firm) (Erstwhilepartnership By v. Https://Hcservices.ecourts.gov.in/Hcservices

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 11.12.2019CORAM: THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.NO.37124 OF 2003ANDW.M.P.NO.45056 OF 2003 East Coast Constructions and Industries (Firm) (ErstwhilePartnership by through its Partners)“Bukharia Buildings”No.4, Moores Road,Chennai – 600 006.Rep by its Former Partner,K.T.M.Ahmed Mustafa ... Petitioner Vs. 1. Commissioner of Income Tax, Chennai I (i/c), Room No.529, 5[th] Floor, New Block 121, Mahatma Gandhi Road, Chennai – 34.2. The Deputy Commissioner of Income Tax, Special Range V, Chennai – 600 034.3. Joint Commissioner of Income Tax, Special Range V, Chennai – 600 034.... Respondents Prayer: Writ Petition is filed under article 226 of the Constitutionof India, Writ of Certiorari, to call for the records inC.No.203/19/CIT-CH-I/2003-04, dated 02.12.2003 on the file ofthe 1[st] respondent. For Petitioner : Mr.M.P.Senthilkumar for N.MuthukumarFor Respondents : Mrs.Hema Muralikrishnan Senior Standing Counsel Heard Mr.M.P.Senthilkumar for Mr.N.Muthukumar, learnedcounsel for the petitioner and Mrs.Hema Muralikrishnan, SeniorStanding Counsel for the respondents. 2. The petitioner has challenged the impugned notice issuedunder Section 263 of the Income Tax Act. The invocation of theaforesaid provision of the Income Tax act, is pursuant to aninternal order sheet dated 21.03.2002 of the concerned officerwhich reads as follows:- “Since both the points mentioned abovehave been duly considered in theassessment for the assessment year 1995-1996 the proceedings for this year areclosed as NA." 3. It is the contention of the petitioner that theassessments were completed for the assessment year 1996-1997 on23.04.1998 in the hands of the petitioner. Thereafter, a noticeunder Section 148 of the Income Tax Act, 1961 was issued to thepetitioner on 19.12.2000. He submits that the decision to dropthe aforesaid proceeding vide an internal order sheet dated21.03.2002 was not communicated to the petitioner and thereforeit was not an “order” for the purpose of invocation of thejurisdiction under Section 263 of the Income Tax Act, 1961. Thelearned counsel for the petitioner relied on the followingdecisions: 4. It was further submitted that the impugned notice dated2.12.2003 under Section 263 of the Income Tax Act, 1961 wasclearly barred by limitation as the original order of assessmentwas made on 23.04.1998. The learned counsel for the petitionersubmitted that the last date for invoking the jurisdiction undersection 263 to revise an order of assessment after expiry of 2years from the end of the financial year in which the orderssought to be devised was passed had expired. The learnedcounsel for the petitioner submits that the last date forinvoking the jurisdiction under section 263 of the Income TaxAct, 1961 would have expired on 31/03/2001 and therefore https://hcservices.ecourts.gov.in/hcservices/ invocation of section 263 on 02.12.2003 was barred by law andtherefore without jurisdiction. 5.Learned counsel for the petitioner further submits theissue as to whether there was capital gains in the hands of thepetitioner firm on account of conversion of partnership concerninto a company under the provisions of the Income Tax Act, 1961was also no longer res integra in the light of the decision ofthe division bench of this court in Cadd Centre Versus AC IT(2016) 383 ITR 258 (Mad). 6.The learned counsel for the petitioner also relied on thefollowing decisions to state that invocation of section 263 ofthe Income Tax Act, 1961 was without jurisdiction:- i) Malabar Industrial Co., Ltd., vs.C.I.T (2000) 243 ITR 83 (SC) ii)C.I.T. vs.Max India Ltd., (2007) 295 ITR 282 (SC) iii)C.I.T. vs. Mepco Industries Ltd., (2007) 294 ITR 121 (Mad) iv)C.I.T. vs.K.G.Denim Ltd., 180 Taxman 590 (Mad) v)CIT vs. SAK Soft Ltd., (2008) 290 ITR 63 (Mad)vi)PCIT vs.Abhijit Bhandari 414 ITR 485 (Mad) 6.The learned counsel for the petitioner also relied on thefollowing decisions to state that invocation of section 263 ofthe Income Tax Act, 1961 was without jurisdiction:- i) Malabar Industrial Co., Ltd., vs.C.I.T (2000) 243 ITR 83 (SC) ii)C.I.T. vs.Max India Ltd., (2007) 295 ITR 282 (SC) iii)C.I.T. vs. Mepco Industries Ltd., (2007) 294 ITR 121 (Mad) iv)C.I.T. vs.K.G.Denim Ltd., 180 Taxman 590 (Mad) v)CIT vs. SAK Soft Ltd., (2008) 290 ITR 63 (Mad)vi)PCIT vs.Abhijit Bhandari 414 ITR 485 (Mad) 7.Defending the impugned order, the learned counsel for therespondent submits that the invocation of section 263 of theIncome Tax Act, 1961 was in time. She submits a decision takenon 21.03.2002 to drop the proceeding initiated pursuant tosection 148 of the Income Tax Act, 1961 though not communicatedwas nevertheless an order and therefore there is no merits inthe contention that the invocation of jurisdiction under section263 of the Income Tax Act, 1961 was without jurisdiction.Further, the learned counsel submits that the invocation ofsection 263 of the Income Tax Act, 1961 was in time. Shefurther submits the power to revise an order prejudicial tointerest of revenue is available with the 1[st] respondent inrespect of any proceedings under the Act and therefore theproceeding of the officer dated 31.03.2002 though notcommunicated earlier was amenable to revision under section 263of the Act. 8.I have considered the submissions of the learned counselfor the petitioner and the respondent. 9.According to the petitioner also the issue squarelycovered in their favour on merits. The decision to drop theproceeding has not been communicated to the petitioner. As longas such decision had remained in the files, invocation ofjurisdiction under section 263 of the Income Tax Act, 1961 would have been premature. However, once the aforesaid decision iscommunicated and made known to the petitioner, such decisionwould be amenable to revision under section 263 of the IncomeTax Act, 1961. In this case, the decision has been communicated.Therefore, I do not find any reasons to interfere at the stage.Therefore, I leave the issue open to be decided by the 1[st]respondent on merits. Petitioner shall make all submissions onmerit including their defence pertaining to jurisdiction. 10.Since the impugned notice is of the year 2003, theauthority/respondent is requested to pass appropriate orderswithin a period of 3 months from the date of this receipt ofthis order. 11. Accordingly, the Writ Petition is disposed with theabove directions.No costs. Consequently, connected MiscellaneousPetition is closed. Sd/- Assistant Registrar //True Copy// jas/kkd Sub Assistant Registrar To1. The Commissioner of Income Tax, Chennai I (i/c), Room No.529, 5[th] Floor, New Block 121, Mahatma Gandhi Road, Chennai – 34.2. The Deputy Commissioner of Income Tax, Special Range V, Chennai – 600 034.3. The Joint Commissioner of Income Tax, Special Range V, Chennai – 600 034.+1cc to Mr.Mallika Srinivasan, Advocate, S.R.No.103771+1cc to Mrs.Hema Muralikrishnan, Advocate, S.R.No.103872W.P.No.37124 of 2003andW.M.P.No.45056 of 2003SR(CO)CS/10/02/2020 https://hcservices.ecourts.gov.in/hcservices/