I. Goldmine Investments v. Deputy Commissionerof Income Tax, Order Of This Court In Tax Case(Appeal)

IN THE HIGH COURT OF JUDICATURE AT MADRAS The Principal Officer,M/s. RR Donnelley India Outsource Private Limited,(Formerly known as Astron Document ManagementPrivate Limited),Rep. by its Jyothi Prosad Bose, Director,Son of Utsama Prosad Bose,43A, Astron House, Deputy Commissioner of Income Tax,Corporate Circle – 5 (2),121, Nungambakkam High Road,Chennai 600 034....Respondent in All W.Ps. Writ Petitions filed under Article 226 of the Constitutionof India praying to issue a Writ of Certiorari, to call for therecords in PAN: dated 23.03.2016 relating to theAssessment Years 2003-04, 2004-05 and 2005-06 on the file of therespondent and quash the same. In these Writ Petitions, the petitioner has challenged theimpugned notices all dated 23.03.2016 issued under Section 148of the Income Tax Act, 1961 seeking to reopen the assessment forthe Assessment Years 2003-04, 2004-05 and 2005-06. https://hcservices.ecourts.gov.in/hcservices/ 2. It is the cases of the petitioner that the assessment forthese three Assessment Years, the petitioner had failed todeduct TDS under Chapter XVII-B of the Income Tax Act, 1961 andhad therefore voluntarily added the same to the taxable turnoverand claimed deduction under Section 10B of the Income Tax Act,1961 applicable to newly established 100% Export Orientedundertaking. 3. During the Assessment Year 2006-07, the petitionervoluntarily paid TDS and claimed deduction under Section 40(a)(ia) of the Income Tax Act, 1961. On the aforesaid amount, thepetitioner wanted to claim expenditure. The Assessing Officerhad disallowed the same. 4. The Commissioner of Income Tax (Appeals) by an orderdated 31.8.2012 directed the Assessing Officer to recompute theprofit from the business eligible for deduction under Section10B(4) for the earlier years by not increasing the profit due todisallowance under Section 40(a)(ia) of the Income Tax Act, 1961. 5. Aggrieved by the aforesaid order dated 31.08.2012 of theCommissioner of Income Tax (Appeals), the petitioner preferredan appeal before the Income Tax Appellate Tribunal. 6. The Income Tax Appellate Tribunal by its order dated24.08.2015 upheld the aforesaid order of the Commissioner ofIncome Tax (Appeals). 7. The Income Tax Appellate Tribunal while upholding theorder of the Commissioner of Income Tax (Appeals) however heldthat the order directing the computation of deduction underSection 10B will be subject to limitations provided under theIncome Tax Act, 1961. 8. It is the contention of the petitioner that the orderdated 31.08.2012 of the Commissioner of Income Tax (Appeals) hadmerged with the order dated 24.08.2015 of the Income TaxAppellate Tribunal and therefore it was not open for therespondent to invoke Section 148 in the light of Section 150(2)of the Income Tax Act, 1961. 9. In this connection learned counsel for the petitionerrelied on the following decisions:- i. Goldmine Investments Vs. Deputy Commissionerof Income Tax, order of this Court in Tax Case(Appeal) No.215 of 2008 and W.A.No.2108 of2010 and T.C.(A) Nos. 448 and 452 of 2013,dated 29.11.2013. 8. It is the contention of the petitioner that the orderdated 31.08.2012 of the Commissioner of Income Tax (Appeals) hadmerged with the order dated 24.08.2015 of the Income TaxAppellate Tribunal and therefore it was not open for therespondent to invoke Section 148 in the light of Section 150(2)of the Income Tax Act, 1961. 9. In this connection learned counsel for the petitionerrelied on the following decisions:- i. Goldmine Investments Vs. Deputy Commissionerof Income Tax, order of this Court in Tax Case(Appeal) No.215 of 2008 and W.A.No.2108 of2010 and T.C.(A) Nos. 448 and 452 of 2013,dated 29.11.2013. ii.K.M.Sharma Vs. Income Tax Officer, (2002) 4SCC 339.iii.Union of India and Others Vs. KamlakshiFinanace Corporation, AIR 1992 SC 711.iv.Commissioner of Income Tax Vs. G.Viswanatham,(1988) 172 ITR 401.v. Parveen Kumari and another Vs. Commissioner ofIncome-Tax and another, (1999) 237 ITR 339.vi.Commissioner of Income Tax Vs. VaikundomRubber Co. Ltd., (2001) 249 ITR 19.vii.Spences Hotels Pvt. Ltd. Vs. DeputyCommissioner of Income Tax, (2003) 263 ITR263.viii.Col. Sir Harinder Singh Brar Vs. Income TaxOfficer, (2006) 282 ITR 371 (P&H).ix.Commissioner of Income Tax Vs. Gem PlusJewellery India Ltd., 2010 SCC OnLine Bom2068.x. Kunhayammed Vs. State of Kerala, (2000) 6 SCC359.xi.Commissioner of Income Tax Vs. AmritlalBhogilal & Co., (1985) 34 ITR 130 (SC).xii.Somnath Sahu Vs. The State of Orissa andOthers, (1969) 3 SCC 384.xiii.Gojer Bros. Pvt. Ltd. Vs. Ratan Lal Singh,(1974) 2 SCC 453. 10. It is the contention of the learned counsel for thepetitioner that the last date for reopening the assessment,within the normal period of limitation, expired on 31[st] of March,2008, 2009 and 2010 receptively for the respective AssessmentYears. 11. Likewise, the last date for reopening the assessment forthe purpose of 1[st] proviso to Section 147 of the Income Tax Act,1961 expired on 31[st] March, 2010, 2011 and 2012 respectively andtherefore invocation of Section 148 was barred under Section 154(2) of the Income Tax Act, 1961. 12. Per contra, the learned counsel for the respondent wouldsubmit that the limitation is protected under Section 153 of theIncome Tax Act, 1961 to reopen the assessment under Section 148to give effect to the order of the Tribunal and that of theCommissioner of Income Tax (Appeals). 13. It is submitted that in any event, it is open for thepetitioner to make the submissions before the respondentAssessing Officer and if the petitioner has a valid case,certainly the proceedings would be dropped. https://hcservices.ecourts.gov.in/hcservices/ 14. It is submitted that the respondent could not implementthe order dated 31.08.2015 of the Commissioner of Income Tax(Appeals) as both the petitioner and the respondent hadpreferred their respective appeals before the Income TaxAppellateTribunalinI.T.A.No.2049/Mds./2012andI.T.A.No.2064/Mds/2012 against the order dated 31.08.2012 of theCommissioner of Income Tax (Appeals). 15. I have considered the arguments advanced on behalf ofthe petitioner and the respondent. 16. The question that is required to be answered in thepresent writ petitions is whether the reopening of theassessment for the three Assessment Years would get time-barredin view of the order of the Income Tax Appellate Tribunal on24.08.2015 or whether the order disposing the two appeals of thepetitioner and the respondent had no bearing on the limitation. 15. I have considered the arguments advanced on behalf ofthe petitioner and the respondent. 16. The question that is required to be answered in thepresent writ petitions is whether the reopening of theassessment for the three Assessment Years would get time-barredin view of the order of the Income Tax Appellate Tribunal on24.08.2015 or whether the order disposing the two appeals of thepetitioner and the respondent had no bearing on the limitation. 17. The arguments advanced by the learned counsel for thepetitioner that the order of the Commissioner of Income Tax(Appeals) dated 31.08.2012 had merged with the order dated24.08.2019 passed by the Appellate Tribunal. However, merelybecause, the said order of the Commissioner of Income Tax(Appeals) had merged with the order of the Tribunal does notmean with order of the Commissioner of Income Tax (Appeals)could not be implemented and that there was a bar for re-openingthe Assessment under Section 150(2) of the Income Tax Act, 1961. 18. As per sub-section 1 of Section 150 of the Income TaxAct, 1961, a notice under Section 148 of the Income Tax Act,1961, can be issued notwithstanding anything contained inSection 149 of the Act for the purpose of making an assessmentor re-assessment or recomputation in consequence of or to giveeffect to any finding or direction contained in an order passedby any authority in any proceeding under the Act by way ofappeal, reference or revision or by a court in any proceedingunder any other law. 19. Sub-Section 1 of Section 150 of the Income Tax Act, 1961will not apply only where any assessment, re-assessment orrecomputation in respect of which the assessment, re-assessmentor recomputation could not have been made at the time the orderwhich was the subject matter of appeal, reference or revision,as the case may be, was made by reason any other provisionlimiting the time within which any action for assessment,reassessment or recomputation could have been made. 20. In other words, the limitation under sub-Section 2 toSection 150 will apply only when the limitation had already https://hcservices.ecourts.gov.in/hcservices/ expired by the time before the assessment order for theAssessment Year 2006-07 was made. If not, there is a saving oflimitation under Section 150(1) of the Income Tax Act, 1961. Itis for this reason, the Income Tax Appellate Tribunal vide orderdated 24.08.2015 held that such recomputation will be subject tolimitation. 21. I therefore do not find any merits in the present WritPetitions. The petitioner is directed to participate in theproceedings before the respondent. Since the disputepertains to the Assessment Years2003-04 to 2005-06, the petitioner is directed to fileobjections/ representations, if any, within a period of thirtydays from the date of receipt of a copy of this order. Therespondent is directed to pass appropriate orders afterconsidering the such objections / representations, within aperiod of three months from the date of receipt of a copy ofthis order. 22. All the Writ Petitions are dismissed. No cost.Consequently, connected Miscellaneous Petitions are closed. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar jen ToDeputy Commissioner of Income Tax,Corporate Circle – 5 (2),121, Nungambakkam High Road, Chennai 600 034. +1 CC to Mr.N.V.Balaji, Advocate, sr 21811 +1 CC to M/s.Hema Muralikrishnan, Advocate, sr 20696 Pre-Delivery Common Order inW.P.Nos.16217 to 16219 of 2016and W.M.P.Nos.14001 to 14003 of 2016 RK (CO)AT (22/05/2020)