M/S.bharani Hospitals Pvt. Ltd v. The Income Tax Officer,Corporate Ward 1(2),Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM M/s.Bharani Hospitals Pvt. Ltd.,Represented by its Director,Dr.Bharani R Paluvai,22, Arcot Road,Saligramam, Chennai – 600 093....Petitioner in all W.Ps Vs The Income Tax Officer,Corporate Ward 1(2),Room No.614, 6[th] Floor,New Block, Aayakar Bhavan,121 MG Road, Nungambakkam,Chennai – 600 034....Respondent in all W.Ps Prayer in W.P.No.15211 of 2016: Petition filed under Article226 of the Constitution of India to issue a Writ ofCertiorarified Mandamus, calling for the records of theRespondent contained in its impugned assessment order dated15.03.2016, passed under Section 16 read with Section 17 of theWealth Tax Act, 1957, in PAN No. , for the assessmentyear 2008-09, and to quash the same together with all consequentnotices, and to consequently forebear the respondent or any ofits subordinates, agents or any other person claiming under theRespondent from reassessing the Petitioner's wealth tax for theassessment year 2008-09 under Section 17 of the Wealth Tax Act,1957. Prayer in W.P.No.15213 of 2016: Petition filed under Article226 of the Constitution of India to issue a Writ ofCertiorarified Mandamus, calling for the records of theRespondent contained in its impugned assessment order dated15.03.2016, passed under Section 16 read with Section 17 of theWealth Tax Act, 1957, in PAN No. , for the assessmentyear 2010-11, and to quash the same together with all consequentnotices, and to consequently forebear the respondent or any ofits subordinates, agents or any other person claiming under theRespondent from reassessing the Petitioner's wealth tax for the assessment year 2010-11 under Section 17 of the Wealth Tax Act,1957. Prayer in W.P.No.15214 of 2016: Petition filed under Article226 of the Constitution of India to issue a Writ ofCertiorarified Mandamus, calling for the records of theRespondent contained in its impugned assessment order dated15.03.2016, passed under Section 16 read with Section 17 of theWealth Tax Act, 1957, in PAN No. , for the assessmentyear 2009-10, and to quash the same together with all consequentnotices, and to consequently forebear the respondent or any ofits subordinates, agents or any other person claiming under theRespondent from reassessing the Petitioner's wealth tax for theassessment year 2009-10 under Section 17 of the Wealth Tax Act,1957. For Petitioner : Mr.Suhrith Parthasarathy (in all W.Ps)For Respondent: Ms.Hema Muralikrishnan Senior Standing Counsel (in all W.Ps) COMMON ORDERBy this common order, all the writ petitions are beingdisposed of. 2. In these writ petitions, the petitioner has challengedthe assessment orders dated 15.03.2016 passed under Section 18(1)(c) of the Wealth Tax Act, 1957. The impugned orders havebeen passed for the Assessment Years 2008-2009, 2009-2010 &2010-2011. The impugned orders preceded the issue on a noticeunder Section 17 of the Wealth Tax Act, 1957, which is parimateria with Section 147 of the Income Tax Act, 1961. 3. The petitioner requested the respondent to furnish thereasons for reopening of the assessment which was furnished by acommunication dated 16.10.2015. Thereafter, the impugned ordershave been passed. The impugned orders are assailed primarily onthe ground that the respondent has bypassed the procedureprescribed by the Hon'ble Supreme Court in G.K.N.Driveshafts(India) Ltd. Vs. Income Tax Officer and Others, (2003) 259 ITR19 (SC). 4. The learned counsel for the petitioner submits that theissue is also covered by the decision of the Gujarat High Courtin Arvind Mills Ltd., Vs Assistant Commissioner of Wealth Tax,[2004] 270 ITR 467, wherein, the Division Bench of this Courtfollowing the decision of the Hon'ble Supreme Court inG.K.N.Driveshafts Case (Referred to supra) and held that therespondent enjoined to pass a speaking order. 4. The learned counsel for the petitioner submits that theissue is also covered by the decision of the Gujarat High Courtin Arvind Mills Ltd., Vs Assistant Commissioner of Wealth Tax,[2004] 270 ITR 467, wherein, the Division Bench of this Courtfollowing the decision of the Hon'ble Supreme Court inG.K.N.Driveshafts Case (Referred to supra) and held that therespondent enjoined to pass a speaking order. 5. The learned senior standing counsel for the respondentsubmits that the impugned order is well-reasoned and requires nointerference inasmuch as the petitioner also participated in theassessment proceedings before the impugned orders came to bepassed. She therefore submits that the impugned orders areliable to be sustained and these writ petitions are liable to bedismissed. 6. Heard the learned counsel for the petitioner and thelearned senior standing counsel for the respondent. 7. There is no dispute in the facts and circumstances of thecase that no speaking order was passed before passing theimpugned Assessment Orders. The provisions of the Income TaxAct, Wealth Tax Act as far as the reopening of the assessmentsare concerned are pari materia with Section 17 of the Wealth TaxAct, 1957 and Section 147 of the Income Tax Act, 1961. Section 17 of the WealthSection 147 of the IncomeTax ActTax ActIf the Assessing OfficerIf the [Assessing] Officer(has to believe) that the[has reason to believe]net wealth chargeable tothat any income chargeabletax in respect of which anytotaxhasescapedperson is assessable underassessmentforanythis Act has escapedassessment year, he may,assessmentforanysubject to the provisionsassessment year (whether byof sections 148 to 153,reason of under- assessmentassess or reassess suchor assessment at too low aincome and also any otherrate or otherwise), he may,income chargeable to taxsubject to the otherwhichhasescapedprovisions of this sectionassessment and which comesand section 17A, serve onto his notice subsequentlysuch person a noticein the course of therequiring him to furnishproceedingsunderthiswithin such period as maysection, or recompute thebe specified in the notice,loss or the depreciationa return in the prescribedallowance or any allowance,form and verified in theas the case may be, for theprescribed manner settingassessment year concernedforth the next wealth in(hereafter in this sectionrespect of which suchand in sections 148 to 153person is assessable as onreferred to as the relevantthevaluationdateassessment year)mentioned in the notice,along with such otherparticulars as may berequired by the notice, andmay proceed to assess orreassess such net wealthand also any other netwealth chargeable to tax inrespect of which suchperson is assessable, whichhas escaped assessment andwhich comes to his noticesubsequently in the courseof the proceedings underthis section for theassessment year concerned(hereinafterinthissection referred to as therelevant assessment year),and the provisions of thisAct shall, so far as maybe, apply as if the returnswere a return required to 8. It has been rightly contended by the learned counsel forthe petitioner, the decision of the Hon'ble Supreme Court inG.K.N.Driveshafts case (referred to supra) is to be applied evenfor re-opening of assessment under the Wealth Tax Act, 1957. Iam therefore of the view, the impugned order deserves to be setaside. Accordingly, I remit the case back to the respondent topass a speaking orders on merits in accordance with lawfollowing the decision of the Hon'ble Supreme Court inG.K.N.Driveshafts case. 8. It has been rightly contended by the learned counsel forthe petitioner, the decision of the Hon'ble Supreme Court inG.K.N.Driveshafts case (referred to supra) is to be applied evenfor re-opening of assessment under the Wealth Tax Act, 1957. Iam therefore of the view, the impugned order deserves to be setaside. Accordingly, I remit the case back to the respondent topass a speaking orders on merits in accordance with lawfollowing the decision of the Hon'ble Supreme Court inG.K.N.Driveshafts case. 9. Such orders shall be passed within a period of threemonths from the date of receipt of a copy of this order subjectto the compliance of the procedure as per the provisions of theWealth Tax Act, 1957 and the relevant rules as in force. If thepetitioner is entrusted to participate in the proceedings, therespondent shall hear the petitioner or the petitioner'srepresentative through Video Conferencing. 10. These writ petitions stand disposed of with the aboveobservations. No costs. Consequently, connected WritMiscellaneous Petitions are closed. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant RegistrararbTo The Income Tax Officer,Corporate Ward 1(2),Room No.614, 6[th] Floor,New Block, Aayakar Bhavan,121 MG Road, Nungambakkam,Chennai – 600 034. +1cc to M/s.Hema Murlikrishnan, Advocate, Sr.No.19464+3cc to M/s.Arun Karthik Mohan, Advocate, Sr.No.19423,19422,19424 PMK(CO)baf 05/5/2021