He Income Tax Act, 1961 (Herein After Referred To As Act), Dated30.12.2018, 25.03.2022 And 26.03.2022 As Detailed Below v. Manjunatha Cotton Andginning Factory Reported In (2013) 35 Taxmann.com 250 (Karnataka)And The Case Of Commissioner Of Income Tax, Bangalore Vs Ssa’semerald Mead

M/S.Aurolab Trustrepresented by its President,Thulasiraj Ravilla,No.72, Kuruvikaran Salai,Gandhi Nagar,Madurai – 625 020. National Faceless Assessment Centre, Delhirepresented by Additional/Joint/Deputy/Assistant Commissioner of Income Tax,Room No.401, 2[nd] Floor, E.Ramp,Jawaharlal Nehru StadiumDelhi 110 003. PRAYER in W.P.(MD) No.5876 of 2022:Writ Petition filed underArticle 226 of the Constitution of India for issuance of Writ ofCertiorari, to call for the records on the file of the respondentrelating to notice under Section 274 r.w.s. 271(1)(c) dated30.12.2018 for Asst. Year 2016-17 in PAN. and quash thesame as invalid in the eyes of law. PRAYER in W.P.(MD) No.6213 of 2022:Writ Petition filed underArticle 226 of the Constitution of India for issuance of Writ ofCertiorari, to call for the impugned order dated 25.03.2022 levyinga penalty of Rs.5,69,21,498/- u/s.271(1)(c) of the Income tax Act,1961 for Asst.Year 2011-12 having DIN:ITBA/PNL/F/271(1)(c) /2021-22/1041481978(1) passed by the respondent, and quash the same asillegal. PRAYER in W.P.(MD) No.6214 of 2022:Writ Petition filed underArticle 226 of the Constitution of India for issuance of Writ ofCertiorari, to call for the impugned order dated 26.03.2022 levyinga penalty of Rs.2,53,07,576/- u/s.271(1)(c) of the Income tax Act,1961 for Asst.Year 2013-14 having DIN:ITBA/PNL/F/271(1)(c) /2021-22/1041607363(1) passed by the respondent, and quash the same asillegal. https://hcservices.ecourts.gov.in/hcservices/ PRAYER in W.P.(MD) No.6215 of 2022:Writ Petition filed underArticle 226 of the Constitution of India for issuance of Writ ofCertiorari, to call for the impugned order dated 25.03.2022 levyinga penalty of Rs.39,04,295/- u/s.271(1)(c) of the Income tax Act,1961 for Asst.Year 2014-15 having DIN:ITBA/PNL/F/271(1)(c) /2021-22/1041483821(1) passed by the respondent, and quash the same asillegal. COMMON ORDER In these writ petitions, the petitioners have challenged theimpugned order passed under Section 274 r/w Section 271 (1) (c) ofthe Income Tax Act, 1961 (herein after referred to as Act), dated30.12.2018, 25.03.2022 and 26.03.2022 as detailed below:- 2.In W.P.(MD) No.5876 of 2022, the petitioner has challengedthe impugned notice dated 30.12.2018 issued under Section 274 r/wSection 271 (1) (C) of the Act. Earlier, the petitioner had alsochallenged the impugned notices issued in respect of the assessmentyears 2011-2012, 2013-2014 and 2014-2015 in W.P.(MD) Nos.5873 to5875 of 2022. As orders under Section 271 (1) (C) of the Act werepassed on the date mentioned in the aforesaid table, which are nowimpugned in W.P.(MD) Nos.6213 to 6215 of 2022, the above mentionedwrit petitions were closed with liberty to the petitioner to raiseall issues relating to jurisdiction to issue notices under Section274 r/w Section 271 (1) (C) of the Act. 3.The challenge to the impugned orders in W.P.MD) Nos.6213 to6215 of 2022 and the impugned notice dated 30.12.2018 in W.P.(MD)No.5876 of 2022 is primarily on two grounds. i) The notice issuedfor the respective assessment years and the consequential orders forimposing penalty under these provisions were vague, inasmuch as ithttps://hcservices.ecourts.gov.in/hcservices/ has not been clearly specified in the notice as to whether there wasconcealment of income or furnishing of inaccurate details by thepetitioner. On this score, the learned counsel for the petitionerhas placed reliance on the decisions of the High Court of Karnatakain the case of Commissioner of Income Tax Vs Manjunatha Cotton andGinning Factory reported in (2013) 35 taxmann.com 250 (Karnataka)and the case of Commissioner of Income Tax, Bangalore Vs SSA’SEmerald Meadows reported in (2016) 73 taxmann.com 241 (Karnataka). has not been clearly specified in the notice as to whether there wasconcealment of income or furnishing of inaccurate details by thepetitioner. On this score, the learned counsel for the petitionerhas placed reliance on the decisions of the High Court of Karnatakain the case of Commissioner of Income Tax Vs Manjunatha Cotton andGinning Factory reported in (2013) 35 taxmann.com 250 (Karnataka)and the case of Commissioner of Income Tax, Bangalore Vs SSA’SEmerald Meadows reported in (2016) 73 taxmann.com 241 (Karnataka). 4.The learned counsel for the petitioners further submits thatthe decision of the Karnataka High Court in the Commissioner ofIncome Tax, Bangalore’s case (referred supra), has been affirmed bythe Hon'ble Supreme Court, inasmuch as the Special Leave Petitionfiled by the Department was dismissed on 05.08.2016, which isreported in (2016) 73 taxmann.com 248 (SC). 5.It is further submitted that the petitioner is a charitableinstitution and is engaged in charitable activity and therefore,neither there was furnishing of any inaccurate details norconcealment of any income. That apart, it is submitted that afterthe assessment orders were passed, the petitioner has also paid thetax due and no prejudice would be caused to the income taxDepartment, even if the proceedings are deferred as the petitioner'sappeal in TCA.No.227 of 2011 against the order of the Tribunalrejecting/canceling the registration under Section 12A of the Act ispending before this Court and since the appeals filed against therespective assessment orders passed on 08.09.2016 and 28.03.2014were dismissed, further appeal before the Tribunal is pending as onthe date of these writ petitions. 6.It is submitted that even if the petitioner remainsunsuccessful in the appeal before the Tribunal and before the HighCourt in TCA No.227 of 2011, the Department can initiate proceedingsunder Section 274 r/w Section 271 (1) (C) of the Act. In thisconnection, the learned counsel for the petitioner has placedreliance on the decision of the Hon'ble Supreme Court in the case ofCIT Vs. Reliance Petro Products Limited reported in (2010) 322 ITR158 (SC). 7.It is further submitted that the proceedings under Section274 r/w Section 271 (1) (C) of the Act were initiated immediatelyafter the assessment orders were issued. However, no order waspassed. It is therefore submitted that only the CIT appeal iscompetent to issue a notice under Section 274 r/w Section 271 (1)(C) of the Act and therefore, the impugned orders in W.P.(MD)Nos.6213 to 6215 of 2022 and the impugned notice dated 30.12.2018 inW.P.(MD) No.5876 of 2022 have to go. 8.The learned counsel for the petitioner further submits thatthe decision of the Division Bench of this Court in the case ofhttps://hcservices.ecourts.gov.in/hcservices/ M/S.Gangotri Textiles Limited, Coimbatore Vs. the DeputyCommissioner of Income Tax, Coimbatore reported in (2020) SCC online(Mad) 16077 cannot be applied to the facts of the present case,inasmuch as the petitioner has been vigilant and has taken acategorical stand that the notices issued to the petitioner werevague and were therefore liable to be withdrawn in the light of thedecisions of the Karnataka High Court cited supra. 8.The learned counsel for the petitioner further submits thatthe decision of the Division Bench of this Court in the case ofhttps://hcservices.ecourts.gov.in/hcservices/ M/S.Gangotri Textiles Limited, Coimbatore Vs. the DeputyCommissioner of Income Tax, Coimbatore reported in (2020) SCC online(Mad) 16077 cannot be applied to the facts of the present case,inasmuch as the petitioner has been vigilant and has taken acategorical stand that the notices issued to the petitioner werevague and were therefore liable to be withdrawn in the light of thedecisions of the Karnataka High Court cited supra. 9.Opposing the prayer, the learned Senior Standing Counsel forthe respondent submits that these writ petitions are liable to bedismissed. It is further submitted that W.P.(MD) No.5876 of 2022 ispremature and is therefore liable to be dismissed. The learnedSenior Standing Counsel for the respondent further submits that theissue is not only covered against the respondent by the decision ofthe Division Bench of this Court in the Gangotri Textiles's case(referred supra) but also the decision of this Court in the SundaramFinance's case, wherein the two decisions of the Karnataka HighCourt were also distinguished. That apart, it is submitted that theimpugned orders in W.P.MD) Nos.6213 to 6215 of 2022 has rightlyplaced reliance on the decision of this Court in W.P.No.16140 of2019 (Amtex Software Solutions Private Limited, Chennai Vs.Assistant Commissioner of Income Tax (OSD), Chennai and other),dated 12.06.2019. It is therefore submitted that even on this countalso, the writ petitions are liable to be dismissed. 10.The learned Senior Standing Counsel for the respondentfurther submits that the petitioner has taken a hypo-technical plearegarding the impugned notices issued under Section Section 271 (1)(C) of the Act. It is submitted that the petitioner was given acertificate as a charitable institution on 09.10.1992, which waslater cancelled on 30.12.2010 and thereafter, the Tribunal passed anorder on 11.05.2011 in ITA.No.135/Mds/2011, against which thepetitioner is in appeal before the Division Bench of this Court inTCA.No.227 of 2011. 11.The period in dispute in the present case pertains to theyears 2011-2012, 2013-2014, 2014-2015 and 2016-2017. It is submittedthat the petitioner was well aware of the fact that the petitionerwas not entitled for exemption under Sections 11 and 12 of the Act,in view of the cancellation of the registration under Section 12A ofthe Act. It is therefore submitted that the petitioner ought to havedeclared the correct income and paid tax may be under protest. Inthis case, the tax amount paid much later after the assessment ordercame to be passed. It is therefore submitted that the writ petitionsare devoid of merits. 12.I have heard the arguments advanced by the learned counselfor the petitioner and the learned Senior Standing Counsel for therespondent. https://hcservices.ecourts.gov.in/hcservices/ 13.The impugned notices have been issued under Section 271 (1)(c) of the Income Tax Act, 1961. The said Section empowers that ifthe Assessing Officer or the Commissioner (Appeals) or the PrincipalCommissioner or Commissioner in the course of any proceedings underthis Act, is satisfied that any person has concealed the particularsof his income or has furnished inaccurate particulars of suchincome, he may direct such person to pay penalty. Section 275 (1) ofthe said Act specifies the period, within which penalty can beimposed under Chapter XXI of the Income Tax Act, 1961. 12.I have heard the arguments advanced by the learned counselfor the petitioner and the learned Senior Standing Counsel for therespondent. https://hcservices.ecourts.gov.in/hcservices/ 13.The impugned notices have been issued under Section 271 (1)(c) of the Income Tax Act, 1961. The said Section empowers that ifthe Assessing Officer or the Commissioner (Appeals) or the PrincipalCommissioner or Commissioner in the course of any proceedings underthis Act, is satisfied that any person has concealed the particularsof his income or has furnished inaccurate particulars of suchincome, he may direct such person to pay penalty. Section 275 (1) ofthe said Act specifies the period, within which penalty can beimposed under Chapter XXI of the Income Tax Act, 1961. 14.As per Section 275 (1) (a) of the Income Tax Act, 1961, Noorder imposing penalty shall be passed after the expiry of thefinancial year, in the course of which action for the imposition ofpenalty has been initiated, are completed, or six months from theend of the month, in which the order of the Deputy Commissioner(Appeals) or the Commissioner (Appeals) or, as the case may be, theAppellate Tribunal is received by the Chief Commissioner orCommissioner, whichever later expired, where the assessment order orother order is the subject matter of the appeal. 15.As per the proviso to the aforesaid Section, an orderimposing penalty shall be passed before the expiry of the financialyear, in which proceedings, in the course of which an action forimposition of penalty has been initiated, are completed within 1year from the end of the financial year, in which the order of theDeputy Commissioner (Appeals) or the Commissioner (Appeals) or, asthe case may be, the Appellate Tribunal is received by the ChiefCommissioner or Commissioner, whichever is later. 16.The facts on record indicate that the petitioner is wellaware of the fact that the petitioner was not entitled to claimexemption under Sections 11 and 12 of the Income Tax Act, 1961, oncethe registration under Section 12A of the Act had been cancelled on30.12.2010. The Tribunal has also affirmed the views and therefore,the petitioner is in appeal. As on date, the petitioner is notentitled to claim exemption as a charitable institution. Therefore,while filing the successive returns under Section 139 of the saidAct, the petitioner has to arrived at the correct taxable income andpay the tax thereon. Even if the petitioner wants to claimexemption, it is for the petitioner to have arrived at the correcttax that was payable by the petitioner as ordinary tax assessee, whodoes not enjoy the exemption and file returns. 17.Considering the above, I am of the view that the petitionerwas well aware of the fact that this is the case of filling ofinaccurate particulars in the returns and the petitioner has alsoreplied to the same in the notices issued to the petitioner. Thepetitioner had earlier filed writ petitions in W.P.(MD) Nos.5873 to5875 of 2022 long after the notices were issued, after theassessment orders were passed by the Assessing Officer. It is onlyhttps://hcservices.ecourts.gov.in/hcservices/ by way of an afterthought the petitioner had challenged the noticesin W.P.(MD) Nos.5873 to 5875 of 2022. The said writ petitions weredismissed in view of the orders impugned W.P.(MD) Nos.6213 to 6215of 2022. 18.There is no merits in the present writ petitions. Thepetitioner has to workout the remedy against the orders passed underSection 274 r/w Section 271 (1) (C) of the Income Tax, Act 1961before the Appellate Commissioner. Likewise, the petitioner has toawait for the orders to be passed in the notices issued on30.12.2018, impugned in W.P.(MD) No.5876 of 2022, considering thefact that the petitioner has also paid the disputed tax, which maybe a factor to be considered by the respondent to grant waiver underSection 220 (6) of the said Act. by way of an afterthought the petitioner had challenged the noticesin W.P.(MD) Nos.5873 to 5875 of 2022. The said writ petitions weredismissed in view of the orders impugned W.P.(MD) Nos.6213 to 6215of 2022. 18.There is no merits in the present writ petitions. Thepetitioner has to workout the remedy against the orders passed underSection 274 r/w Section 271 (1) (C) of the Income Tax, Act 1961before the Appellate Commissioner. Likewise, the petitioner has toawait for the orders to be passed in the notices issued on30.12.2018, impugned in W.P.(MD) No.5876 of 2022, considering thefact that the petitioner has also paid the disputed tax, which maybe a factor to be considered by the respondent to grant waiver underSection 220 (6) of the said Act. 19.In the light of the above discussion, these writ petitionsare dismissed giving liberty to the petitioner to workout the remedyagainst the impugned orders and notices before the AppellateCommissioner and to submit to the orders to be passed by theAssigning Officer in the impugned notice in W.P.(MD) No.5876 of2022. The petitioner is also given liberty to file a statutoryappeal before the Appellate Commissioner within a period of 6 weeksfrom the date of receipt of a copy of this order. If such an appealis filed within such time, the Appellate Commissioner shall considerand dispose of the same on merits and in accordance with lawexpeditiously. Insofar as W.P.(MD) No.5876 of 2022 is concerned, the2nd respondent may pass orders as expeditiously as possible andthereafter, it is for the petitioner to workout the remedy beforethe Appellate Commissioner, if any adverse orders are passed. Nocosts. Consequently, connected miscellaneous petitions are closed. Sd/- Assistant Registrar (CS II) // True Copy // / /2022Sub Assistant Registrar(CS) MmTo1.The Additional/Joint/Deputy/ Assistant Commissioner of Income Tax, Room No.401, 2[nd] Floor, E.Ramp, Jawaharlal Nehru Stadium Delhi 110 003.2.The Assistant Commissioner of Income Tax Act Exempt(OSD), Coimbatore.+5 CC to M/s.J. JEYAKUMARAN, Advocate( SR.Nos.19555,19556,19557,19558,19532) 18.04.2022 MGJ(01.06.2022) 6P 9Chttps://hcservices.ecourts.gov.in/hcservices/