Mohan Ravi v. The Income Tax Officernon-Corporate Ward 20(5) Che121, Nungambakkam High Roadchennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 26.08.2019CORAMTHE HONOURABLE MR. JUSTICE M. SUNDAR W.P.Nos.25239, 25241, 25242, 25244, 25245 & 25248 of 2019WMP.Nos.24807, 24808, 24812 to 24819, 24823 & 24824 of 2019 Mohan Ravi ...Petitioner in all Writ Petitions --Vs-- The Income Tax OfficerNon-Corporate Ward 20(5) CHE121, Nungambakkam High RoadChennai-600034 ... Respondent in all Writ Petitions Prayer: Writ Petitions filed under Article 226 of theConstitution of India, praying to issue a writ of certiorari,calling for the records on the file of the respondent inPAN.ADLPR6964QandquashtheimpugnednoticesinNos.ITBA/AST/S/148/2018-19/1015529572(1)/1015529571(1)/1015522673(1)/ 1015522677(1) /1015522683(1) /1015522669(1) dated29.03.2019 issued u/s.148 of the Act for the assessment years2012-13 to 2017-18 along with the consequential proceedings inC.Nos. ADLPR6964Q/ 2019-20/11/9/7/6/3/1 dated 31.07.2019 asillegal and without jurisdiction. For Petitioner : Mr.Raghav Rajeev Menon in all WP's For Respondent : Mr.J.Narayanaswamy Senior Standing Counsel in all WPs O R D E R Mr.Raghav Rajeev Menon, learned counsel on record for writpetitioner and Mr.J.Narayanaswami, learned Senior Standingcounsel for respondent are before this Court. 2. With consent of learned counsel on both sides, the mainwrit petitions are taken up, heard out and are being disposedof. https://hcservices.ecourts.gov.in/hcservices/ 3. These six writ petitions were moved by way of lunchmotion today, expressing imminence, immediacy and urgency.Request for lunch motion at half past ten in the forenoon wasacceded to and the matters have been taken up. 4. It was submitted that these six writ petitions arise outof a common factual matrix and the subject matter arises under'Income Tax Act, 1961' ('IT Act' for brevity). It was submittedthat only the assessment years in these six writ petitions aredifferent and the six assessment years are 2012-13 to 2017-18(six successive assessment years). Be that as it may, it wasalso submitted that the central theme/core issue in these writpetitions is the same. Therefore, this common order will governthese six writ petitions. 5. Six different notices, all dated 29.03.2019, were issuedto the writ petitioner inter alia under Section 148 of IT Act onthe ground that the authority believes that income chargeable totax for the respective assessment years qua notices had escapedassessment within the meaning of Section 147 of IT Act (thesesix notices under Section 148 shall hereinafter be collectivelyreferred to as 'impugned notices I' for the sake of convenience,clarity and brevity). On receipt of impugned notices I, writpetitioner/assessee through his chartered accountant sent sixdifferent communications, all dated 26.04.2019, and this Courtis informed that the communications are ad verbatim the same.These communications dated 26.04.2019 were sent by a charteredaccountant firm (acting on behalf of the writ petitioner and oninstructions from the writ petitioner/assessee) sought forreasons for reopening the assessments and submitted that reasonsfor reopening the assessments may be provided at the earliest soas to enable the writ petitioner/assessee to file objections tothe same. 6. To be noted these communications dated 26.04.2019 weresent by placing reliance on the judgment of the Hon'ble SupremeCourt in GKN Driveshafts (India) Ltd. vs. Income Tax Officer andOthers reported in [(2003) 259 ITR 19 (SC)]. 7. To these communications dated 26.04.2019, the Departmentresponded vide communications, which is also dated 26.04.2019.Sum and substance of the response of the Department is thatthere was a survey inter alia under Section 133A of IT Act andi.e., survey conducted in the premises of the writpetitioner/assessee on 18.03.2019. It was also pointed out thatduring such survey, bills/invoices for all the expenses claimed,loan agreement copies etc., were called for but no details havebeen furnished until 25.03.2019. 6. To be noted these communications dated 26.04.2019 weresent by placing reliance on the judgment of the Hon'ble SupremeCourt in GKN Driveshafts (India) Ltd. vs. Income Tax Officer andOthers reported in [(2003) 259 ITR 19 (SC)]. 7. To these communications dated 26.04.2019, the Departmentresponded vide communications, which is also dated 26.04.2019.Sum and substance of the response of the Department is thatthere was a survey inter alia under Section 133A of IT Act andi.e., survey conducted in the premises of the writpetitioner/assessee on 18.03.2019. It was also pointed out thatduring such survey, bills/invoices for all the expenses claimed,loan agreement copies etc., were called for but no details havebeen furnished until 25.03.2019. 8. To be noted, in these communications dated 26.04.2019,the date of survey has been wrongly mentioned as 18.03.2018. Thecorrect date is 18.03.2019. To be noted, it was also pointed outthat the writ petitioner/assessee has claimed expenses, whichwas in the region of 60 per cent (59.23 per cent to be precise)of the income offered. 9. In effect, the reason for reopening was that the writpetitioner/assessee was not able to provide bills/invoices forexpenses to the tune of nearly 60 per cent (59.23 per cent setout with exactitude), claimed as expenses and that the detailshave not been furnished even though time was granted. 10. After reasons for reopening were so furnished, the writpetitioner/assessee, through his chartered accountants sentanother set of six communications all dated 11.05.2019 settingout objections to the reopening. It is submitted that theseobjections are akin to each other. After considering theobjections raised by the writ petitioner/assessee for reopening,the respondent has passed six separate speaking orders all dated31.07.2019 bearing reference nos. C.Nos. ADLPR6964Q/2019-20/11,ADLPR6964Q/2019-20/9, ADLPR6964Q/2019-20/7, ADLPR6964Q/2019-20/6, ADLPR6964Q/2019-20/3, ADLPR6964Q/2019-20/1 (these speakingorders shall herein after referred to as 'impugned notices II'for the sake of convenience, clarity and brevity). What is ofutmost importance is that, it is not disputed that impugnednotices II were served on the writ petitioner on 01.08.2019 orlatest by 02.08.2019. Learned counsel for the writ petitioner isunable to give the correct date but submits that it wascertainly served on or before 02.08.2019. 11. To be noted, instant writ petitions have been presentedonly by 21.08.2019, filed on 22.08.2019 and as already mentionedsupra have been moved by way of lunch motion today. In theinterregnum i.e., between 02.08.2019 and 21.08.2019, pursuant toimpugned notices II, the respondent has sent communicationsdated 17.08.2019, reminding the writ petitioner/assessee thatcertain details were sought for vide a letter dated 31.07.2019and that the same have not been furnished. In response to this,writ petitioner/assessee did not say that he intend to assailthe impugned notices I and impugned notices II, on the contrary,writ petitioner/assessee through their auditors sentcommunications dated 19.08.2019 stating that the authorizedrepresentative of the assessee was out of the country andtherefore, requested time till 1[st] week of September 2019. 12. To be noted, it is not mentioned that the writpetitioner was out of the country but it is stated that theauthorized representative was out of the country. It is in sucha backdrop that instant writ petitions have been filed in the aforesaid manner on 21.08.2019 and moved by way of lunch motiontoday i.e. 26.08.2019, assailing impugned notices I and impugnednotices II. 12. To be noted, it is not mentioned that the writpetitioner was out of the country but it is stated that theauthorized representative was out of the country. It is in sucha backdrop that instant writ petitions have been filed in the aforesaid manner on 21.08.2019 and moved by way of lunch motiontoday i.e. 26.08.2019, assailing impugned notices I and impugnednotices II. 13. In the hearing, notwithstanding several averments thathave been made in the affidavits filed in support of the writpetitions, notwithstanding several grounds that have been raisedin the affidavit filed in support of the writ petitions andseveral contentions that have been canvassed, submissions werefocused on points which can be broadly summarised as follows: (a) GKN Driveshafts (India) Ltd.(supra)principle has been violated qua impugned orders I andimpugned orders II. (b) There should be tangible reasons forreopening and the respondent has not shown anytangible reasons for reopening. (c) Writ petitioner was not given adequate timeto produce documents in respect of expenses postsurvey on 18.03.2019.(d) There can be no reopening pursuant to surveyunder Section 133C of IT Act. 14. Mr.J.Narayanaswami, learned Senior Standing Counsel(Income Tax), who accepted notice on behalf of the solerespondent in all the six writ petitions, pointed out that apersonal hearing pursuant to impugned notices II has been fixedtoday i.e., 26.08.2019. It was submitted by learned counsel forthe writ petitioner/assessee that an adjournment was sought asit was fixed at 11.30 A.M. in the forenoon today. Therefore, itemerges with clarity that the writ petitioner/assessee wasserved with copies of the impugned notices II on 02.08.2019itself but has chosen to present these writ petitions in thisCourt only on 21.08.2019, obviously after receipt of noticefixing personal hearing on 26.08.2019. To be noted, this aspectof the matter will be dealt with in the latter part of the order. 15. It was pointed out that GKN Driveshafts (India) Ltd.(supra) principle is that in cases of reopening, it is open tothe assessee to ask for reasons for reopening, reasons have tobe given to the assessee, who is entitled to file objections onthe same and the department should pass a speaking order on theobjections. 16. In this case, there is no disputation or disagreementthat this procedure i.e., GKN Driveshafts (India) Ltd. (supra)principle has been followed. The dates have already been alludedto supra. What is being urged is that the speaking order doesnot deal with the objections of the writ petitioner correctly.In response to this, learned revenue counsel pointed out thatreasons given for reopening are based on survey dated 18.03.2019and the writ petitioner/assessee not producing bills/invoicesloan agreements etc., in spite of time being granted, whereasthe objections are in a complete tangent. However, theobjections have been dealt with, therefore, it cannot begainsaid that that the GKN Driveshafts (India) Ltd. (supra)principle has not been followed. This answers argument (a) ofthe writ petitioner. 17. In the instant case, there has been a survey and thewrit petitioner has been called upon to produce certaindocuments. In one breath, the writ petitioner/assessee submitsthat adequate time has not been given for producing thedocuments and in same breath the writ petitioner/assesseesubmits that the very reopening itself raises a jurisdictionalfact. 17. In the instant case, there has been a survey and thewrit petitioner has been called upon to produce certaindocuments. In one breath, the writ petitioner/assessee submitsthat adequate time has not been given for producing thedocuments and in same breath the writ petitioner/assesseesubmits that the very reopening itself raises a jurisdictionalfact. 18. With regard to tangible reasons for reopening andreopening pursuant to survey under Section 133A of IT Act, thisCourt finds that there is a reference to an order ofVisakhapatnam Income Tax Appeallate Tribunal in the objections,but the judgment placed before this Court being an order made ina regular Tax Case Appeal No.702 of 2009 dated 11.07.2019 by aHon'ble Division Bench of this court does not deal with a caseof survey under 133A. Some other judgments are also before thisCourt, which also did not turn on a survey under Section 133A.Therefore, other than the judgment of the VisakhapatnamTribunal, which is referred to in the objections, there isnothing to show that there cannot be reopening in cases ofsurvey when the writ petitioner assessee is unable to explainexcessive deductions claimed by producing supporting documents. 19. On the contrary, a perusal of clause (ca) ofExplanation 2 of Section 147 makes it clear that Section 133Csurvey and assessing officer noticing in such survey thatexcessive deduction has been claimed is brought within the sweepof income escaping assessment within the meaning of Section 147of IT Act. In other words, a plain reading of aforesaid clause(ca) of Explanation 2 of Section 147 makes it clear that itcannot be gainsaid that Section 133C survey cannot be the basisfor a Section 148 notice regarding escaped assessment (escapedassessment within the meaning of Section 147 of IT Act). Thisanswers points (b) and (d) urged by the writ petitioner. 20. In any event, in the instant case it is to be notedthat the writ petitioner/assessee submits that sufficient timehas not been granted for producing the documents. Furthermore, https://hcservices.ecourts.gov.in/hcservices/ even in response to impugned notices II, the writ petitioner haswritten to the respondent asking for time till first week ofSeptember, 2019. 21. Therefore, it comes out clearly that this is an attemptto derail the hearing before the respondent today i.e.,26.08.2019, as there is no explanation forthcoming from the writpetitioner for not coming before this Court between 02.08.2019and 21.08.2019, more particularly, when during this period thewrit petitioner was issued a reminder notice dated 17.08.2019and writ petitioner responded to the same on 19.08.2019requesting for time. This leaves this Court with the view thatthe writ petitioner has not approached this Court in the instantwrit petitions with the requisite sincerity. On the contrary,these writ petitions has been moved at the 11[th] hour. This Courtis of the opinion that it is not only the 11[th] hour but 59[th]minute of the 11[th] hour. 22. In this backdrop, this Court is not inclined tointerfere with the impugned notices I and impugned notices II.Even in the objections, being dealt with vide impugned noticesII, it has been made clear that it is open to the writ petitioner/assessee to establish that these questionsare left open to be decided by the Assessing Authority. It isopen to the writ petitioner to raise this very issue in theassessment proceedings and, if raised, and if documents,supporting deductions are filed, the same shall be considered,as mentioned in the impugned notices II, which deal with theobjections. 22. In this backdrop, this Court is not inclined tointerfere with the impugned notices I and impugned notices II.Even in the objections, being dealt with vide impugned noticesII, it has been made clear that it is open to the writ petitioner/assessee to establish that these questionsare left open to be decided by the Assessing Authority. It isopen to the writ petitioner to raise this very issue in theassessment proceedings and, if raised, and if documents,supporting deductions are filed, the same shall be considered,as mentioned in the impugned notices II, which deal with theobjections. 23. This Court is of the considered view that such 11[th] hourpetitions will derail assessments process under fiscal lawstatues. It is made clear that this view is taken in thepeculiar trajectory of this case, as the writ petitioner hasapproached this Court at the 11[th] hour particularly when the writpetitioner had all the time in the world to approach this Courtearlier. As alluded to supra, these writ petitions have beenfiled at the 11[th] hour, pursuant to impugned notices II, onrealizing that the personal hearing is fixed on 26.08.2019. Ifwrit petitioner had sought an adjournment in the forenoon todayand if the hearing is rescheduled, the respondent shall considerall documents that are furnished by writ petitioner /assesseeinteralia in support of deductions claimed before completing theassessment. If such a scenario unfurls, the same shall be doneuninfluenced and untrammelled by anything that is se tou in theinstant order. This answers point (c) raised by writ petitioner. 24. These writ petitions are dismissed as bereft ofbonafides and lacking in merits, albeit preserving rights ofwrit petitioner to the limited extent set out supra.Consequently, connected miscellaneous petitions are closed.However, there shall be no order as to costs. Sd/- Asst.Registrar /true copy/Sub Asst. Registrarska ToThe Income Tax OfficerNon-Corporate Ward 20(5) CHE121, Nungambakkam High RoadChennai-600034+1 cc to M/s.J.Narayanaswamy Advocate sr74121W.P.Nos.25239, 25241, 25242, 25244, 25245 & 25248 of 2019WMP.Nos.24807, 24808, 24812 to 24819, 24823 & 24824 of 2019rp(co)aa25/09/2019