Manjula Athur v. >

Reserved on : 20.02.2018 Delivered on : 27.02.2018IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 27.02.2018 CORAM THE HON'BLE MR. JUSTICE M.DURAISWAMY W.P.No.33318 of 2017and W.M.P.Nos.36760 of 2017 & 2328 of 2018 Manjula Athur.. PetitionerVs. The Income Tax Officer,Non Corporate Ward 13 (5),Annexe Building, Aayakkar Bhawan,R.No.402, 4[th] Floor,No.121, Nungambakkam High Road,Chennai – 600 034,Now atWanaparthy Block, 7[th] Floor, R.No.716,No.121, Nungambakkam High Road,Chennai – 600 034. .. Respondent Petition filed under Article 226 of the Constitution ofIndia to issue a Writ of Certiorari calling for the records inPAN AVPPM6061K dated 19.12.2017 relating to Assessment Year2013-14 on the file of the respondent, quash the same. (Prayer amended as per order dated 30.01.2018 in W.M.P.No.2326of 2018 in W.P.No.33318 of 2017) For Petitioner : Mr.G.BaskarFor Respondent : Mr.J.Narayanaswamy, Standing Counsel The petitioner has filed the above Writ Petition to issue aWrit of Certiorari to call for the records dated 19.12.2017relating to Assessment Year 2013-14 on the file of therespondent and to quash the same. 2.It is the case of the petitioner that for the AssessmentYear 2013-14 she filed return of income on 30.12.2014, declaringa total income of Rs.10,94,980/- and net agricultural income ofRs.1,60,00,000/-. Due to change of Auditor, the petitioner was https://hcservices.ecourts.gov.in/hcservices/ not having the return of income or other related documents withher. The respondent issued a Notice under Section 148 of theIncome Tax Act dated 08.06.2016, for reopening the assessmentfor the Assessment Year 2013-14 by stating that the respondenthad reasons to believe that the income chargeable to tax forthat year had escaped assessment. The respondent issued Noticeunder Section 143(2) dated 07.06.2016 calling the petitioner toattend the hearing on 14.06.2017 in connection with the returnof income submitted by the petitioner on 30.12.2014 for theAssessment Year 2013-14. Thereafter, the respondent issuedanother Notice under Section 142(1) read with Section 129 dated07.06.2017 requiring certain details to be furnished inconnection with the Assessment Year 2013-14. 2.1. It is the case of the petitioner that herrepresentative had been appearing before the respondent and evenon 29.09.2017, the authorized representative appeared andsubmitted the details of the land and required further time tofile the required documents in view of change of Auditor andnon-availability of back papers. On 02.11.2017, the petitioner'sauthorized representative filed the return of income, bankstatements and copy of agricultural land documents along withother required documents for the Assessment Year 2013-14 beforethe respondent. On 25.10.2017, the respondent required thepetitioner to appear on 03.11.2017 with certain requireddocuments. Thereafter, the respondent issued the summons dated07.11.2017 directing the petitioner to produce the Books ofAccounts. On 10.11.2017, the petitioner informed the respondenther inability to appear on 10.11.2017 enclosing a MedicalCertificate that she was suffering from Ostereo Arthritis andundergoing treatment. 2.2.On 20.11.2017, the respondent issued the summons underSection 131/137 of the Income Tax Act to appear on 23.11.2017along with the documents. On 23.11.2017, the respondent alsoissued a show cause Notice under Section 271(1)(b) calling uponthe petitioner to explain why penalty should not be levied forthe failure on her part to appear before the respondent. Therespondent issued another hearing Notice on 01.12.2017 fixingthe case on 05.12.2017 requiring further details. Thepetitioner's authorized representative, by his letter dated05.12.2017, requested the respondent to grant time, forsubmission of the documents, till 11.12.2017. On 05.12.2017, therespondent had issued a Notice of hearing on 08.12.2017. On08.12.2017, the petitioner requested the respondent to providecopies of the documents filed by her erstwhile Auditor and theNotices sent by the respondent. On 12.12.2017, the petitionerapproached the respondent with a letter dated 12.12.2017requesting the reasons recorded for reopening the assessment.However, the respondent refused to accept the letter, therefore,the petitioner sent the letter by Speed Post and E-mail to the respondent. On 12.12.2017 itself, the respondent issued a showcause Notice as to the completion of assessment under Section144 on or before 18.12.2017. In these circumstances, thepetitioner has filed the above Writ Petition. 3.According to the respondent, the petitioner was givenseveral opportunities to submit the documents. However, she hasnot utilized the opportunities and filed the documents beforethe respondent. The Assessing Officer had passed the assessmentorder on 19.12.2017 and the same was also despatched on the sameday. The respondent had also stated that the copy of the ordersent to the petitioner was returned with an endorsement “left”on 22.12.2017 and that of AR with postal endorsement as“refused” on 21.12.2017. Further, the respondent has stated thatthe petitioner had not appeared on 18.12.2017 either in personor through authorized representative by filing any power ofauthorization. Further, the petitioner had also filed return ofincome electronically on 20.12.2017 in response to the Noticeissued under Section 148, along with the letter dated 20.12.2017qualifying the return of income. The filing of the said returnand letter seeking reasons after passing of reassessment order,is nonest in law. The reopening of the assessment proceedingsand passing of reassessment order under Section 144 read with147 is valid in law, in as much as, the same is passed within aperiod of four years from the end of the Assessment Year andwhen no regular assessment under Section 143 (3) was made. 4.Heard Mr.G.Baskar, learned counsel appearing for thepetitioner and Mr.J.Narayanaswamy, learned standing counselappearing for the respondent. 5.Mr.G.Baskar, learned counsel appearing for the petitionersubmitted that the impugned order dated 19.12.2017 passed by therespondent is in violation of principles of natural justice forthe reason that the petitioner was not given due opportunity ofhearing and opportunity to produce the documents. The learnedcounsel submitted that when the petitioner has asked for thereasons for reopening the assessment, the Assessing Officer isbound to furnish the same and in the absence of providing thereasons, the impugned order is liable to be set aside. 5.1.In support of his contentions, the learned counselrelied upon an unreported judgment dated 29.01.2018 made inW.P.No.27598 of 2008 [T.V.Mylsamy Vs. The Deputy Commissioner ofIncome Tax, Central Circle-II, 63, Race Course Road, Coimbatore– 18 and another] wherein this Court held as follows:“... 7.The mandate, as laid down by the Hon'bleSupreme Court in the case of GKM Drivershafts (India)Ltd. Vs. ITO [reported in (2003) 259 ITR 19] requires https://hcservices.ecourts.gov.in/hcservices/ 5.1.In support of his contentions, the learned counselrelied upon an unreported judgment dated 29.01.2018 made inW.P.No.27598 of 2008 [T.V.Mylsamy Vs. The Deputy Commissioner ofIncome Tax, Central Circle-II, 63, Race Course Road, Coimbatore– 18 and another] wherein this Court held as follows:“... 7.The mandate, as laid down by the Hon'bleSupreme Court in the case of GKM Drivershafts (India)Ltd. Vs. ITO [reported in (2003) 259 ITR 19] requires https://hcservices.ecourts.gov.in/hcservices/ that when an assessee seeks reasons for reopening theassessment, the Assessing Officer is bound to furnishthe same. On receipt of the reasons, the assessee isentitled to submit their objections, which should beconsidered and a speaking order should be passed. Thereasons cannot be inferred from the reply given by theAssessing Officer dated 12.8.2008. The reasons forreopening should find a place in the files of theAssessing Officer for the relevant Assessment Year andthose reasons need to be communicated to the assesseeso as to enable them to file their objections to thereopening proceedings. Therefore, this Court is of theconsidered view that the reply sent by the AssessingOfficer on 12.8.2008 is of little avail. Even assumingthat the assessee had partial knowledge of the reasonsfor reopening the assessment, that would not besufficient compliance of the mandate in the light ofthe decision in the case of GKN Driveshafts (India)Ltd. 8.Accordingly, the writ petition is disposed ofwith the following directions:(i)The first respondent shall consider therequest of the petitioner for furnishing the reasonsfor reopening the assessment for the year 2002-03within a period of 15 days from the date of receipt ofa copy of this order.(ii)On furnishing of such reasons for reopening,the petitioner is directed to file theirobjections/reply, within 30 days thereafter, afterwhich, the first respondent shall consider and redothe assessment by following the mandate laid down inGKN Driveshafts (India) Ltd.(iii)It is made clear that neither party shalltake advantage of the fact that the writ petition hasbeen pending from 2008 onwards till date. It isneedless to state that it is open to the assessee toraise all the grounds while submitting theirobjections to the reasons for reopening the assessmenton being furnished by the Assessing Officer.” 6.Mr.J.Narayanaswamy, learned standing counsel appearing forthe respondent submitted that though sufficient opportunity wasgiven to the petitioner, she has not utilized the same,therefore, the order passed by the respondent is just and proper. 7.On a careful consideration of the materials available onrecord and the submissions made by the learned counsel on eitherside, it could be seen that the petitioner has filed the returnof income for the Assessment Year 2013-14 belatedly on30.12.2014. Admittedly, no scrutiny assessment under Section 143(3) was made. According to the respondent, as per the Annual https://hcservices.ecourts.gov.in/hcservices/ Information Return received from the Bank and Sub Registrar'sOffice, the petitioner had deposited cash of Rs.23.54 lakhs andhad purchased immovable properties for Rs.33 lakhs. The returnof income filed by the assessee also reflected the receipt ofagricultural income of Rs.1.6 crores. In these circumstances,the respondent initiated reassessment proceedings by issuingNotice under Section 148 dated 08.06.2016, which is within fouryears from the end of the Assessment Year. https://hcservices.ecourts.gov.in/hcservices/ Information Return received from the Bank and Sub Registrar'sOffice, the petitioner had deposited cash of Rs.23.54 lakhs andhad purchased immovable properties for Rs.33 lakhs. The returnof income filed by the assessee also reflected the receipt ofagricultural income of Rs.1.6 crores. In these circumstances,the respondent initiated reassessment proceedings by issuingNotice under Section 148 dated 08.06.2016, which is within fouryears from the end of the Assessment Year. 7.1.On 07.06.2017, the respondent issued a Notice underSection 142(1) calling for the details from the petitioner withrespect to the Annual Information Return received from the Bankand Sub Registrar's Office. The petitioner was asked to providethe details viz., brief note on business, computation of incomefor the Assessment Year 2013-14 as well as the prior andsubsequent Assessment Year, copies of books of accounts and bankstatement, copy of the Sale Deed, copy of the document of theagricultural land from which the agricultural income was shownalong with Patta, Chitta and Adangal. The information regardingimmovable properties was also sought from the Sub Registrar'sOffice. 7.2.The petitioner was given opportunities to produce therecords on 14.06.2017, 07.07.2017 and 06.09.2017. However, therewas no response from the petitioner. Thereafter, on 29.09.2017,another authorized representative sought time till 10.10.2017stating that the documents were in Telugu language and nothingcan be inferred and the documents need to be translated.However, there was no response on 10.10.2017 and the case wasreposted on 03.11.2017, vide letter dated 25.10.2017. Theauthorized representative, by letter dated 02.11.2017, encloseda copy of the return of income for the Assessment Year 2013-14and the bank statement for the period from 01.04.2012 to31.03.2013. The representative was granted time to provide thedetails of the agricultural income and the crops cultivated inthe land. The hearing was fixed on 06.11.2017, however, on thatday also, there was no response from the petitioner. Therefore,summons were issued on 07.11.2017 asking the petitioner toappear on 10.11.2017 and submit the details. On 10.11.2017, thepetitioner filed a letter stating that she was staying atTripathi taking medical treatment and will not be able to appearin person and sought condonation of non-appearance. Taking intoconsideration the age and health condition of the petitioner,another summons was issued on 20.11.2017 calling upon theauthorized representative to furnish the details on 23.11.2017and even on that day, there was no response. 7.3.By letter dated 24.11.2017, the petitioner was asked toshow cause why the agricultural income of Rs.1.6 crores shouldnot be assessed to tax as income from other sources, investmentin immovable properties for Rs.33 lakhs be assessed as 7.3.By letter dated 24.11.2017, the petitioner was asked toshow cause why the agricultural income of Rs.1.6 crores shouldnot be assessed to tax as income from other sources, investmentin immovable properties for Rs.33 lakhs be assessed as unexplained investment under Section 69 for failure to prove thesource of purchase and cash deposit of Rs.23.54 lakhs beassessed as unexplained cash under Section 68. The hearing wasfixed on 29.11.2017 and on that day also, there was no responseon the side of the petitioner. By letter dated 01.12.2017, therespondent called upon the petitioner to produce additionaldetails and the case was posted on 05.12.2017. On 05.12.2017,the petitioner sought time till 11.12.2017. Thereafter, the casewas adjourned to 08.12.2017. Again the case was adjourned to18.12.2017 and even on that day, there was no response from thepetitioner. Hence, the respondent had passed the assessmentorder on 19.12.2017 and despatched the same to the petitioner.Therefore, from the above details given by the respondent, it isclear that the respondent had given sufficient opportunities tothe petitioner. However, the petitioner had failed to utilizethose opportunities and produce the documents before therespondent. Therefore, the contention that the petitioner wasnot given due opportunity, cannot be accepted. 8.However, on the other ground that furnishing the reasonsfor reopening the assessment is concerned, this Court inW.P.No.27598 of 2008 dated 29.01.2018, following the ratio laiddown by the Hon'ble Supreme Court in the judgment reported in(2003) 259 ITR 19 [GKM Drivershafts (India) Ltd. Vs. ITO] heldthat the Assessing Officer is bound to furnish the reasons forreopening the assessment to the assessee when the asssesseeseeks reasons for the reopening. 9.In the case on hand, though the petitioner has sought forthe reasons for reopening the assessment on 12.12.2017, theAssessing Officer has not furnished the reasons recorded forreopening the assessment to the petitioner. In fact, thepetitioner had stated that her letter requesting the reasonsrecorded for reopening the assessment itself was refused,therefore, the petitioner sent the letter by Speed Post and E-mail to the respondent. Inspite of the same, the respondent hadnot furnished the reasons recorded for reopening the assessmentto the petitioner. 10.Therefore, on this ground, following the dictum laid downby the Hon'ble Supreme Court in the judgment reported in (2003)259 ITR 19 [GKM Drivershafts (India) Ltd. Vs. ITO] and the orderpassed by this Court in W.P.No.27598 of 2008 dated 29.01.2018,the impugned assessment order dated 19.12.2017 is liable to beset aside. Accordingly, the same is set aside. 11.The respondent is directed to consider the request of thepetitioner for furnishing the reasons recorded for reopening theassessment for the year 2013-14 within a period of fifteen (15)days from the date of receipt of a copy of this order. Onfurnishing of such reasons for reopening, the petitioner is directed to file her objections/reply within thirty (30) daysthereafter, after which, the respondent shall consider and redothe assessment by following the mandate laid down in (2003) 259ITR 19 [GKM Drivershafts (India) Ltd. Vs. ITO], as expeditiouslyas possible. 12.With these observations, the Writ Petition is allowed. Nocosts. Consequently, the connected miscellaneous petitions areclosed. -s/d- Deputy Registrar True CopySub-Assistant RegistrarvaToThe Income Tax Officer,Non Corporate Ward 13 (5),Annexe Building, Aayakkar Bhawan,R.No.402, 4[th] Floor,No.121, Nungambakkam High Road,Chennai – 600 034,Now atWanaparthy Block, 7[th] Floor, R.No.716,No.121, Nungambakkam High Road,Chennai – 600 034.+1 cc to M/s.G.Baskar Advocate sr 14634+1 cc to M/s.J.Narayanaswamy Advocate sr 14892 W.P.No.33318 of 2017and W.M.P.Nos.36760 of 2017 & 2328 of 2018 aa07/03/2018