Gemini Engi-Fab Limited v. Gemini Engi-Fab Limited

908 wp 106 of 2019.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.106 OF 2019 Gemini Engi-Fab Limited …Petitioner versus …Dy. Commissioner of Income Tax – 12(2) (2)Respondent WITH WRIT PETITION NO.91 OF 2019 Gemini Engi-Fab Limited …Petitioner versus Dy. Commissioner of Income Tax – 12(2) (2) …Respondent WITH WRIT PETITION NO.107 OF 2019 Gemini Engi-Fab Limited …Petitioner …Respondent versus Dy. Commissioner of Income Tax – 12(2) (2) WITH WRIT PETITION NO.111 OF 2019 Gemini Engi-Fab Limited …Petitioner …Respondent versus Dy. Commissioner of Income Tax – 12(2) (2) WITH WRIT PETITION NO.190 OF 2019 Gemini Engi-Fab Limited …Petitioner …Respondent versus Dy. Commissioner of Income Tax – 12(2) (2) Respondent WITH WRIT PETITION NO.191 OF 2019 Gemini Engi-Fab Limited …Petitioner versus…Dy. Commissioner of Income Tax – 12(2) (2)Respondent Respondent SSP 1/7 908 wp 106 of 2019.doc Mr. S.C.Tiwari with Ms. Rujuta N. Pawar, for Petitioners. Mr. Charanjeet Chanderpal, for Respondent. CORAM: AKIL KURESHI & S.J. KATHAWALLA, JJ. DATE: 4TH JUNE, 2019 P.C.: 1.Heard the learned Advocates for the parties for the final hearing of thesePetitions. The Petitions arise in common background. They have been heard togetherand would be disposed off by this common Judgment. The facts being similar, we mayrecord them from Writ Petition No.106 of 2019. 2.The Petitioner which is a limited Company, has challenged the Notice dated27th April, 2018 issued by the Respondent Deputy Commissioner of Income Tax,under Section 153C of the Income Tax Act, 1961 (“the Act” for short). 3.The Petitioner is engaged in the business of manufacturing and trading inengineering machines. A search operation was carried out against the person otherthan the Petitioner and an action was initiated by the Department in terms of Section153C of the Act, on the ground that incriminating material was found during suchsearch against the person other than the searched persons. Earlier the Petitioner hadfiled the Writ Petition bearing No.3626 of 2018 and connected Petitions, challengingthese Notices under Section 153C of the Act, on the ground that even as per thesatisfaction note, no incriminating material was available at the disposal of the Income SSP 2/7 908 wp 106 of 2019.doc Tax Department, on the basis of which such Assessment can be made in the hands ofthe Petitioner. These Petitions came to be disposed off by common order dated 22[nd]December, 2018. The Petitioner was allowed to raise such objections before theAssessing Officer, who would consider the objections and then decide whether toproceed further with the assessment or not. The Petitioner raised such objectionsunder Communication dated 24th December, 2018. The Assessing Officer passed anorder dated 25th December, 2018, refusing to drop proceedings stating that the meritsor demerits of the information available on the seized material would be subject matterof the assessment order. The Petitioner thereupon filed the present group of Petitionsand renewed the challenge to the Notice under Section 153C of the Act. When thesePetitions were pending and since no stay was granted by the Court and theassessments pursuant to the impugned notices were getting time barred, the AssessingOfficer proceeded to pass separate assessment orders covered under each year ofNotice under Section 153C of the Act. All these orders were passed by him on 31stDecember, 2018. Copies of these orders provided by the Counsel of the Petitioner aretaken on record. 4.In the background of such facts, the learned Counsel for the Petitionervehemently contended that from the beginning, the Department had no incriminatingmaterial found during the search for all assessment years except assessment year 2009-10, for which the Petitioner has in any case not filed the Petition. Even when such an SSP 3/7 908 wp 106 of 2019.doc objection was raised before the Assessing Officer, he ignored the same and proceededto pass assessment orders on the basis of invalid authorization. In support of thiscontention, he relied on the decision of the Supreme Court in the case ofCommissioner of Income Tax-III, Pune V/s. Sinhgad Technical Education Society1 tocontend that no additions can be made in assessment pursuant to Section 153C of theAct, if no incriminating material for the relevant assessment year is found during thesearch. He submitted that merely because pending objections, assessments are framed,would not make the objections infructous. If the every foundation of the assessmentorder is invalid, the Petitioner may not be relegated to alternate remedy. In thiscontext, the learned Counsel for the Petitioner relied on the decision of the DivisionBench of this Court in the case of Allana Cold Stiorage Ltd. V/s. Income Tax Ofcer2. 5.On the other hand, the learned Counsel for the Department opposed thePetitions contending that the Assessing Officer has acted on the basis of the availablematerials. The material having been found during the search against the Petitionerwhich was not searched, the present Notices under Section 153C of the Act wereissued. The Petitioner would have ample opportunities to raise all contentions of factsand law in Appeal and therefore, this Court should not interfere at this stage. 6.We have perused the impugned notices as well as the assessment ordersalready passed by the Assessing Officer against the Petitioner. In a Writ Petition, we 1[2017] 84 taxmann.com 290 (SC) 2[2006] 287 ITR 1 (Bom.) 2[2006] 287 ITR 1 (Bom.) SSP 4/7 would not like to carry out thread bare inquiry by going into the factual aspects ofsufficiency of material in order to initiate proceedings under Section 153C of the Actor of co-relating the incriminating material found during search on the basis of whichadditions are made in the assessment orders. The assessment orders prima faciewould suggest that the Assessing Officer is silent on this issue of co-relation betweenaddition made and the material found during such search. 7.In the case of Commissioner of Income Tax V/s. Vijaybhai N. Chandrani3, theDepartment had filed an Appeal against the Judgment of the Gujarat High Courtsetting aside the proceedings under Section 153C of the Act on the ground that noincriminating material belonging to the Assessee was found during the search. TheSupreme Court reversed the Judgment of the High Court observing that the HighCourt ought not to have entertained the Writ Petition and should have directed theAssessee to file Reply to the Notices and upon receipt of a decision from the assessingauthority, if for any reason it is aggrieved by the said decision, to question the samebefore the forum provided under the Act. In short, the Supreme Court did notapprove the exercise undertaken by the Gujarat High Court, going into the factualaspect of existence of incriminating material belonging to the Assessee seized duringthe search operation. 8.In view of the fact that the assessment orders are already passed and bearing 3[2013] 357 ITR 713 (SC) SSP 5/7 908 wp 106 of 2019.doc in mind the observations of the Supreme Court in the case of Commissioner of Income 8.In view of the fact that the assessment orders are already passed and bearing 3[2013] 357 ITR 713 (SC) SSP 5/7 908 wp 106 of 2019.doc in mind the observations of the Supreme Court in the case of Commissioner of Income Tax V/s. Vijaybhai N. Chandrani (Supra), we would relegate the Petitioner to appealremedy. The Supreme Court in the case of Commissioner of Income Tax and Ors. V/s. Chhabil Dass agarwal4 also observed that where statutory appeal remedy is available intaxing statute, the Court would ordinarily not entertain the Writ Petition. 9. Having perused the material on record and in particular the orders of assessment passed by the Assessing Officer pursuant to the Notices under Section153C of the Act, while relegating the Petitioner to the appeal remedy, we would like to make an interim formula in the peculiar facts of the case. The above Writ Petitionsare disposed off with the following directions : (i) It would be open for the Petitioner to file Appeals against theassessment orders. If such Appeals are filed before 25th June, 2019, the same shall beentertained on merits without having reference to limitation. (ii)If such Appeals are filed within the period prescribed, the Department shall not carry out recovery arising out of the impugned orders till such appeals are disposed off and for a period of 30 days from the date of communication of theAppellate orders. (iii)The Petitioner shall co-operate with the early disposal of the Appeals. It would be open for the Commissioner to decide the Appeals expeditiously with 4[2013] 357 ITR 357 (SC) SSP 6/7 908 wp 106 of 2019.doc which the Petitioner shall render full cooperation. (iv)All contentions of the Petitioner are kept open. (v) The above Writ Petitions are accordingly disposed off. ( S.J.KATHAWALLA, J. ) ( AKIL KURESHI, J. ) SSP 7/7