M/S.harita Housing Construction Limited,29, Jayalakshmi Estates, Nungambakkam,Chennai 600 034 v. Additional / Joint / Deputy / Assistant Commissioner Of Income Tax/ Income Tax Officer, National E-Assessment Centre, Delhi. Assistant Commissioner Of Income Ta

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HON'BLE MR.JUSTICE C.SARAVANAN (Through Video Conferencing) M/s.Harita Housing Construction Limited,29, Jayalakshmi Estates, Nungambakkam,Chennai 600 034. Represented by its Director,Shri. V N Venkatanathan ... Petitioner Vs. 1. Additional / Joint / Deputy / Assistant Commissioner of Income Tax/ Income Tax Officer, National e-Assessment Centre, Delhi. Assistant Commissioner of Income Tax/ Income Tax Officer, National e-Assessment Centre, Delhi. 2. The Income Tax Officer, Corporate Ward -2(3), Corporate Ward -2(3), 121, Mahatma Gandhi Road, Chennai – 600 034. ... Respondents Prayer:- Writ Petition filed under Article 226 of theConstitution of India, for issuance of a Writ of Certiorari,calling for the records of the petitioner on the fileof the first respondent and quash the Impugned AssessmentOrder in ITBA /AST / S / 147 / 2021-2022/ 1036054436(1)dated 30.09.2021 in PAN: for the Assessment Year 2013-2014 passed by the first respondent. For Petitioner : Mr.R.Vijayaraghavan for Subbaraya Aiyar Padmanathan For Respondents: Mrs.Hema Muralikrishnan Senior Standing Counsel ORDER The petitioner has challenged the Impugned Order dated30.09.2021 passed for the Assessment Year 2013 to 2014 pursuantto notice issued under Section 148 of the Income Tax Act, 1961on 30.05.2019. 2. It is the case of the petitioner that the assessment wasoriginally completed under Section 143(3) of the Income Tax Act,1961 for the Assessment Year 2013 to 2014 on 29.02.2016 andthereafter the proceeding under Section 148 of the Income TaxAct, 1968 was initiated in terms of notice dated 30.05.2019beyond the period of four years but within the period of sixyears. 3. The learned counsel for the petitioner submits that thepetitioner had purchased a land from the original owners namelyM.V.Subramaniam and N.Ponnuswamy by virtue of a sale deed dated09.04.2012 for total sale consideration of 3.90 crores( Rs.3,90,13,597/-) and that the consideration for the aforesaidamount was paid by Group company namely TVS Motor ServicesLimited and that the entire amount was 3.90 crores was shownin the books of account to TVS Motor Services Limited, as theamount due from the petitioner. 4. The learned counsel further submits that TVS MotorServices Limited by a letter dated 05.02.2016 confirmed that asper their books of account, the petitioner was owed a Debitbalance of Rs.26,15,86,900/- as on 31.03.2013 together withinterest. 5. He further submits that again by another confirmationletter dated 28.03.2018 the said company confirmed that the TVSFinance and Services Limited entered into an agreement withM/s.TVS Motor Services Limited on 02.04.2012 and sold the landto the petitioner and another three companies for aconsideration of Rs.25.82 crores each and that the amount wasreceived by the petitioner from the TVS Motor Services Limited. 6. The learned counsel further submits that the impugnedAssessment Order has been passed by the first respondentcontrary to the decision of this Court in GKN Drivershafts(India) Ltd vs. Income Tax Officer and Ors. (2002) 70 CCH 1264SCC. 7. The learned counsel further submits that after notice wasissued to the petitioner under Section 148 of the Act, two showcause notices were issued to the petitioner and in response tothe 2[nd] show cause notice dated 25.09.2021, the petitioner hasspecifically raised the issue regarding reopening of the https://hcservices.ecourts.gov.in/hcservices/ assessment vide reply dated 27.09.2021. It is submitted thatwithout giving any reasons and without disposing the objectionof the petitioner for reopening of the assessment impugned orderdated 30.09.2020 has been passed and is therefore liable to bequashed. 7. The learned counsel further submits that after notice wasissued to the petitioner under Section 148 of the Act, two showcause notices were issued to the petitioner and in response tothe 2[nd] show cause notice dated 25.09.2021, the petitioner hasspecifically raised the issue regarding reopening of the https://hcservices.ecourts.gov.in/hcservices/ assessment vide reply dated 27.09.2021. It is submitted thatwithout giving any reasons and without disposing the objectionof the petitioner for reopening of the assessment impugned orderdated 30.09.2020 has been passed and is therefore liable to bequashed. 8. It is further submitted that the entire proceedings isbased on the change of opinion and therefore contrary to thefollowing decisions of this Court and that of the Hon’bleSupreme Court:- i. Foramer Vs. Commissioner of Income Tax andanother, (2001) 247 ITR 0436. ii.Commissioner of Income Tax and another Vs.Foramer France, (2003) 264 ITR 0566. iii.Commissioner of Income Tax Vs. Kelvinatorof India Ltd., (2010) 320 ITR 0561. iv.Fenner (India) Limited Vs. DeputyCommissioner of Income Tax, (2000) 241 ITR0672. v. City Union Bank Limited Vs. AssistantCommissioner of Income Tax and another(2020) 425 ITR 0475 (Mad)vi.MBI Kits International Vs. Income TaxOfficer (2018) 408 ITR 0001 (Mad) vii. Tanmac India Vs. Deputy Commissioner ofIncome Tax, (2016) 97 CCH 0189 ChenHC viii. Commissioner of Income Tax Vs. ElgiUltra Industries Ltd., (2008) 296 ITR 0573. ix. Assistant Commissioner of Income Tax andanother Vs. Hotel Blue Moon, (2010) 321 ITR0362. x. GKN Drivershafts (India) Ltd Vs. IncomeTax Officer and Ors., (2002) 70 CCH 1264(SC) xi. Shri.Khimraj Sakariya Vs. The AssistantCommissioner of Income Tax, BusinessCircle-5, Chennai 600 006, Tax Case(Appeal) No.65 of 2017.xii. Mr.Gurusamy Vs. Assistant Commissioner ofIncome Tax, (2016) 97 CCH 65 (Mad) xiii. Commissioner of Income Tax Vs. D.P.SanduBros, Chembur (P) Ltd., (2005) 273 ITR 1(SC)xiv. Cadell Weaving Mill Co., (P) Ltd Vs.Commissioner of Income Tax, (2001) 249 ITR265(Bom)xv. Commissioner of Income Tax Vs. Mahindraand Mahindra Ltd., (2018) 404 ITR 1 (SC) xvi. PVP Ventures Limited Vs. AssistantCommissioner of Income Tax, (2015) 94 CCH0147 ChenHCxvii. Sabharwal Properties Industries PrivateLtd., and others Vs. Income Tax Officer andothers, (2016) 382 ITR 0457 (Delhi)xviii. Commissioner of Income Tax Vs. ArvindRemedies Limited, (2015) 378 ITR 0547 (Mad)xix. Commissioner of Income Tax and anotherVs. United Racing and Blood Stock Breeders(P) Ltd., (2016) 130 DTR 0344 (Kar)xx. M.Gurusamy Vs. The Assistant Commissionerof Income Tax, (2016) 97 CCH 0065 ChenHCxxi. The Commissioner of Income Tax Vs. D.P.Sandu Bros. Chembur Private Ltd., (2005)273 ITR 0001.xxii. Cadel Weaving Mill Company Private Ltd.,Vs. The Commissioner of Income Tax, (2001)249 ITR 0265.xxiii. The Commissioner of Income Tax Vs.Mahindra Ltd, (2018) 404 ITR 0001 (SC). 9. Opposing the prayer for interfering with the impugnedorder, the learned Senior Standing Counsel for the respondentssubmits that the petitioner neither asked for any reasons forreopening of the assessment nor raised any objections at theappropriate time so to pass a speaking order in terms of thisCourt in GKN DriveShafts (India ) Ltd., vs. Income Tax Officerand Ors. (2002) 70 CCH 1264 (SC). 10. The learned Senior Standing Counsel further submits thatthe petitioner has an alternate remedy by way of an appeal andtherefore there is no merits in the present writ petition. 9. Opposing the prayer for interfering with the impugnedorder, the learned Senior Standing Counsel for the respondentssubmits that the petitioner neither asked for any reasons forreopening of the assessment nor raised any objections at theappropriate time so to pass a speaking order in terms of thisCourt in GKN DriveShafts (India ) Ltd., vs. Income Tax Officerand Ors. (2002) 70 CCH 1264 (SC). 10. The learned Senior Standing Counsel further submits thatthe petitioner has an alternate remedy by way of an appeal andtherefore there is no merits in the present writ petition. 11. By way of rejoinder, the learned counsel for thepetitioner has drawn attention to a communication dated15.11.2021 from the office of the respondent after the impugnedorder was passed where the reasons were given for reopening theassessment wherein it has been held as follows:-“ As per the information received from theITO Corporate Ward – 3 (2) that during theFinancial Year 2012-13 relevant to theAssessment Year 2013-14, the assessee companyhad purchased 10 Hectares of land at Panvel(Maharashtra) from M/s.TVS Motor ServicesPrivate Limited (PAN : ) for aconsideration of Rs.25.82 corers. Whereas it is seen that the assessee companyhad filed Return of Income for the Assessment https://hcservices.ecourts.gov.in/hcservices/ Year 2013-14 admitting “ NIL” income and theassessment was completed with NIL Income.Whereas the source for the considerationamount to the extent of Rs.25.82 crores has tobe verified. In the circumstances there exist reasons tobelieve that income to the extent of Rs.25.82crores has escaped from assessment and hence itis hereby proposed that the assessment year2016-17 may be reopened in order to verify theinconsistencies and being the income escapingassessment to tax”. 12. The learned counsel for the petitioner submits that thereasons given in the said notice also does not justify thereopening of the assessment and therefore prays for quashingthe impugned order. 13. I have considered the arguments advanced by the learnedcounsel for the petitioner and the learned Senior Standingcounsel for the respondents. I have also perused thematerials and notices issued under Section 148 of the Income TaxAct, 1961 and the Impugned Assessment Order passed by therespondents. 14. The reasons for reopening the assessment was alsofurnished to the petitioner on 15.11.2021. Relevant portionreads as under: As per the information received from the ITOCorporate Ward-3(2) that during the FinancialYear 2012 to 2013 relevant to the AssessmentYear 2013 to 2014, the assessee company hadpurchased 10 Hectares of Land at PANVEL(Maharastra) from M/s. TVS Motor ServicesPrivateLimited(PAN: )foraconsideration of Rs.25.82 crores. Whereas it is seen that the assessee companyhad filed Return of Income for the AssessmentYear 2013 to 2014 admitting “NIL” income and theassessment was completed with NIL Income. Whereas the source for the considerationamount to the extent of Rs.25.82 crores has tobe verified. In the circumstances there exist reasons tobelieve that income to the extent of Rs.25.82crores has escaped from assessment and hence itis hereby proposed that the assessment year2016-2017 may be reopened in order to verify theinconsistencies and being the income escapingassessment to tax. Whereas it is seen that the assessee companyhad filed Return of Income for the AssessmentYear 2013 to 2014 admitting “NIL” income and theassessment was completed with NIL Income. Whereas the source for the considerationamount to the extent of Rs.25.82 crores has tobe verified. In the circumstances there exist reasons tobelieve that income to the extent of Rs.25.82crores has escaped from assessment and hence itis hereby proposed that the assessment year2016-2017 may be reopened in order to verify theinconsistencies and being the income escapingassessment to tax. 15. The petitioner has participated in the proceedingspursuant to a notice issued under Section 148 of the Income TaxAct, 1961 knowing fully well the reasons why the notice wasissued for reopening of the assessment. The petitioner in theirrepresentation/reply dated 29.10.2019 has traced out the entirehistory and the circumstances under which the land whichoriginally belonged to Piramal Finance Services Limited (PFSL)was transferred to Harita Finance Limited (HFL) which laternamed as TVS Finance and Services Limited and that a saleagreement was signed and the possession of the land was handedover to the said company. 16. The representation/reply also states that thereafter theland was capitalized in the books of accounts of the TVS Financeand Services Limited (formerly Harita Finance Limited) and thatthe land was valued at Rs.102.50 Crores. Based on the valuationon 27.03.2009 the TVS Finance and Services Limited (formerlyHarita Finance Limited (HFL) entered into an agreement with TVSCredit Services Limited to transfer the above land with thecertain condition. By 30.03.2020, it was stated that thedifference between the sale consideration (Rs.102.50 Crores) andthe outstanding loan amount against the lands were settled(Rs.14.70 Crores) and was offered to tax under the head capitalgains by TVS Finance and Services Limited (TVSFC) in theAssessment Year 2009 to 2010. 17. The petitioner has further stated that though the landwas transferred to TVS credit Services Limited, the same wastransferred to the petitioner’s vendor namely TVS Motor ServicesLimited at cost by TVS Finance Services Limited with TVS CreditService Limited being confirming a party by an agreement to saledated 20.01.2010. 18. Thereafter, the TVS Motor Services Limited sold tenhectares of land to the following four companies and retained1.065 hectares. 19. Thus, it cannot be stated that the petitioner was notaware of the reasons for reopening of the assessment. Thepetitioner has replied to the proceedings initiated underSection 148 of the Income Tax Act, 1961. The petitioner hasnot asked for a speaking order. After the objections, thepetitioner was overruled by the respondents vide ImpugnedAssessment Order, the petitioner has now come forward with thepresent case to make it seems as if decision of the Hon’bleSupreme Court in the case of GKN Drive Shafts (India) LimitedVs. Income Tax Officer, reported in 259 ITR 19, has not beenfollowed. 20. The merits of the case as to whether the income hadescaped assessment or not can be now determined only in anappellate proceedings against the Impugned Assessment Orderspassed under Section 147 read with Section 144B of the IncomeTax Act, 1961. 21. Having given up the right to ask for a speaking order,the petitioner cannot now turn around and question the ImpugnedOrder by stating that it has been passed over-looking thesafeguard prescribed as the Hon’ble Supreme Court in the case ofGKN Drive Shafts (India) Limited Vs. Income Tax Officer,reported in 259 ITR 19. Further, case also does not warrant aspeaking order in terms of the aforesaid decision of the Court. 20. The merits of the case as to whether the income hadescaped assessment or not can be now determined only in anappellate proceedings against the Impugned Assessment Orderspassed under Section 147 read with Section 144B of the IncomeTax Act, 1961. 21. Having given up the right to ask for a speaking order,the petitioner cannot now turn around and question the ImpugnedOrder by stating that it has been passed over-looking thesafeguard prescribed as the Hon’ble Supreme Court in the case ofGKN Drive Shafts (India) Limited Vs. Income Tax Officer,reported in 259 ITR 19. Further, case also does not warrant aspeaking order in terms of the aforesaid decision of the Court. 22. I do not find any merits in the present writ petition.Therefore, this writ petition is liable to be dismissed andaccordingly dismissed. However, liberty is given to thepetitioner to file a statutory appeal before the AppellateCommissinoner under Section 246A of the Income Tax Act, 1961within a period of three months from the date of receipt of acopy of this order. If such an appeal is filed within theaforesaid period, the petitioner’s appeal shall beentertained and disposed in merits and in accordance withlaw. 23. This Writ Petition stands dismissed with the aboveobservations. No costs. Consequently, connected miscellaneouspetition is closed. Sd/- Assistant Registrar True Copy// Sub Assistant Registrar rgm/kkd To 1. The Additional / Joint / Deputy / Assistant Commissioner of Income Tax/ Income Tax Officer, National e-Assessment Centre, Delhi.2. The Income Tax Officer, Corporate Ward -2(3), 121, Mahatma Gandhi Road, Chennai – 600 034. +1cc to Subbaraya Aiyar, Advocate, S.R.No.27742+1cc to Mrs.Hema Muralikrishnan, Advocate, S.R.No.27871 W.P.No22541 of 2021andW.M.P.No.23766 of 2021 JPL[co]NSK/01/06/2022