From 4,97,210/- In The Returns Filed By The Petitioner On13.11.2014 v. Kelvinator Ofindia Reported In (2010) 2 Scc 723 Has Categorically Held Thatreopening Of The Assessment Cannot Be Initiated Based On The Changeof Opinion And The

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 29.03.2022 CORAM: THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.(MD) No.2826 of 2022 and W.M.P.(MD) Nos.2480 and 2481 of 2022 AM.Xavier... Petitioner /vs./ 1.The Assistant Commissioner of Income Tax, Circle -I, Karaikudi, Sivagangai District. 2.Income Tax Officer, Ward 1, Karaikudi, Sivagangai.... Respondents PRAYER:Writ Petition filed under Article 226 of the Constitutionof India for issuance of Writ of Certiorari, calling for therecords relating to impugned notices and quash the impugned noticedated 31.03.2021 in ITBA/AST/S/148/2020-21/1032031421 (1) andconsequential impugned notice dated 23.06.2021 in ITBA/AST/F/143(2)-4/2021-22/1033643281 (1) and 29.11.2021 in ITBA/AST/F/17/2021-22/1037341340 (1) issued by the respondents for Assessment year2014 -2015 under section 148 and 147 of Income Tax Act. For Petitioner: M/s.M.RajeswariFor Respondents: Mr.N.Dilip Kumar Senior Standing Counsel ORDER The petitioner has challenged the impugned notices dated31.03.2021, 23.06.2021 and 29.11.2021 seeking to reopen theassessment for the assessment year 2014-15. 2.It is the specific case of the petitioner that a scrutinyassessment order was passed for the petitioner in response to thereturns filed on 13.11.2014 and 13.06.2016. It is submitted that atthe time of scrutiny assessment under Section 143 (3) of the IncomeTax Act, 1961, a specific query was raised by the then AssessingOfficer regarding the source for cash deposit in the petitioner'sbank account, which was explained to the Assessing Officer andbased on the records and scrutiny of the documents, the incomereturned was enhanced to Rs.5,97,210/-from 4,97,210/- in the returns filed by the petitioner on13.11.2014. 3.The learned counsel for the petitioner submits that thehttps://hcservices.ecourts.gov.in/hcservices/ reasons given for reopening of the assessment vide a communicationdated 29.11.2021, wherein it has been stated that it wassubsequently noticed that the petitioner had failed to disclose thesavings bank account No.62722200023290 at Syndicate Bank and theclosing bank balance of Rs.32,47,512/-, were not offered to incomeand hence, the entire amount of Rs.32,47,512/- was to be treatedas undisclosed income under Section 69 of the aforesaid Act is notcorrect as this was considered before passing the assessment order.It is therefore submitted that the Officer was not justified incoming to a conclusion that there were reasons to conclude that theincome chargeable to tax has escaped from the assessment within themeaning of explanation 2(c)(i) of Section 147 of the Income TaxAct, 1961 for the assessment year 2014-15. 4.The learned counsel for the petitioner has placed strongreliance on the decision of this Court in W.P.Nos.954 of 2020 and35909 of 2019 (M/s.Sanmina – SCI Technology India Private LimitedVs. The Assistant Commissioner of Income Tax, Chennai and another)dated 12.03.2021. It is submitted that the aforesaid order wasupheld by the Division Bench of this Court. It is submitted thatthe Hon'ble Supreme Court in the case of CIT Vs Kelvinator ofIndia reported in (2010) 2 SCC 723 has categorically held thatreopening of the assessment cannot be initiated based on the changeof opinion and therefore the impugned proceeding has to be setaside. 5.Opposing the prayer, the learned Senior Standing Counsel forthe respondents submits that the amount in question was disclosedin the profit and loss account of the firm, of which the petitioneris a partner and therefore the income was not taxed in the hands ofthe firm, of which the petitioner is a partner. Therefore the saidincome was not subject to tax. Even otherwise, on merits, it istherefore submitted that the impugned order cannot be interfered. 5.Opposing the prayer, the learned Senior Standing Counsel forthe respondents submits that the amount in question was disclosedin the profit and loss account of the firm, of which the petitioneris a partner and therefore the income was not taxed in the hands ofthe firm, of which the petitioner is a partner. Therefore the saidincome was not subject to tax. Even otherwise, on merits, it istherefore submitted that the impugned order cannot be interfered. 6.It is further submitted that even though the amount wastransferred to the petitioner's savings account for businesspurpose, it was disclosed in the return filed on 13.11.2014. It istherefore submitted that the writ petition is devoid of merits. 7.It is submitted that after the impugned notices dated31.03.2021, 23.06.2021 and 29.11.2021 were issued, the petitioneralso filed a return on 16.04.2021. However, the petitioner did notask for any reason for reopening of the assessment. Thereafter anotice under Section 143(2) of the Income Tax Act, 1961 was issuedon 23.06.2021, calling upon the petitioner to furnish the detailsby 27.01.2021. It is only on 21.07.2021 the petitioner asked forreasons for the first time, which was furnished by the NationalFaceless Assessment Centre on 29.11.2021. The petitioner was askedto respond by 06.12.2021 and thereafter, a notice was issued underSection 142 (1) of the said Act on 19.01.2022. The petitionerhttps://hcservices.ecourts.gov.in/hcservices/ appears to have given an objection on 25.01.2022 long after theproceedings were initiated. 8.The learned Senior Standing Counsel for the respondentsfurther submits that the petitioner has also replied andthereafter, a draft final assessment order was issued during thependency of the present writ petition on 27.03.2022. Therefore, itis open for the petitioner to give a detailed reply to the same andsubmit the jurisdictional Income Tax to the Income Tax Department,National Faceless Assessment Centre. 9.I have considered the arguments advanced by the learnedcounsel for the petitioner and the learned Senior Standing Counselfor the respondents. 10.The dispute pertains to the assessment year 2014-15(relevant previous year 2013-14). Though the amount ofRs.32,47,512/- appears to have been shown as an asset of the firmin the Profit and Loss account of the firm (M/s.Antony Muthu Udayarand Company), there is no clear explanation as to whether theaforesaid amount was offered as an income by the petitioner. If theamount was transferred to the personal account/savings account ofthe petitioner at the Syndicate Bank, then the aforesaid amountshould have been shown as an expense in the firm’s account. Theaforesaid adjustments are required to be reconciled and consideredby the Officer. 11.In any event, no prejudice would be caused to thepetitioner as the petitioner has now been issued with a draft orderand a show cause notice. Considering the same, I am inclined todispose of this writ petition by directing the petitioner to give aproper reply to the same. The petitioner may file such reply withina period of 30 days from the date of receipt of a copy of thisorder. On receipt of such reply within such time or at the expiryof such time, which the respondents may give, the respondents shallproceed to pass appropriate orders on merits and in accordance withlaw, within a period of 3 months therefrom. It is open for thepetitioner to ask for a personal hearing through video conference. 12.This writ petition is disposed of, in terms of the aboveobservations. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/-Assistant Registrar (CS III) https://hcservices.ecourts.gov.in/hcservices/ mmTo 1.The Assistant Commissioner of Income Tax, Circle - 1, Karaikudi, Sivagangai District. 2.Income Tax Officer, Ward 1, Karaikudi, Sivagangai.+1 CC to M/s.S.M.S.JOHNNY BASHA, Advocate ( SR-15124[F] dated29/03/2022 )+1 CC to M/s.N.DILIPKUMAR, Advocate ( SR-15143[F] dated29/03/2022 ) 12.This writ petition is disposed of, in terms of the aboveobservations. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/-Assistant Registrar (CS III) https://hcservices.ecourts.gov.in/hcservices/ mmTo 1.The Assistant Commissioner of Income Tax, Circle - 1, Karaikudi, Sivagangai District. 2.Income Tax Officer, Ward 1, Karaikudi, Sivagangai.+1 CC to M/s.S.M.S.JOHNNY BASHA, Advocate ( SR-15124[F] dated29/03/2022 )+1 CC to M/s.N.DILIPKUMAR, Advocate ( SR-15143[F] dated29/03/2022 ) W.P.(MD)No.2826 of 202229.03.2022 PA(18.04.2022) 4P 5C