M/S.sakthi Poultry Farm, Salem v. The Income Tax Officer, Ward Iii(1

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 06.12.2018 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Mr.Justice N.SATHISH KUMAR Tax Case Appeal Nos.893 and 894 of 2018 and CMP.No.21765 of 2018 M/s.Sakthi Poultry Farm, Salem ...Appellant /Appellant Vs The Income Tax Officer, Ward III(1), No.3, Gandhi Road, Salem. ...Respondent APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 27.9.2017 made in ITA Nos.1284 &1285/Mds/2017 on the file of the Income Tax Appellate TribunalMadras 'B' Bench respectively for the assessment years 2003-04and 2004-05 and arising against different orders of theCommissioner of Income Tax(Appeals), Salem, both dated28.03.2017, relevant to Assessment Year 2003-2004 and 2004-05 inITA Nos.75/2010-11, ITA No.186/2011-12, against the Assessmentorders dated 14.09.2010 and 30.09.2011 of the Income TaxOfficer, Ward III (1) Salem, for the Assessment Year 2003-04 and2004-05, against the assessment for the assessment year 2003-04,2004-05 both order dated 30.05.2005 of the Income Tax Officer,Ward I (3), Salem. PAN ABA F53031L These appeals by the assessee under Section 260A of theIncome Tax Act, 1961 (hereinafter called the Act) are directedagainst the common order passed by the Income Tax AppellateTribunal (for short, the Tribunal), Chennai in ITA.Nos.1284 and1285/Mds/2017 dated 27.9.2017 for the assessment years 2003-04 https://hcservices.ecourts.gov.in/hcservices/ and 2004-05. 2. The assessee has filed these appeals by raising thefollowing substantial questions of law: “i. Whether the Appellate Tribunal was right in holding that the reassessment underSection 148 done beyond four years is validwhen there is no allegation in theassessment order that there is a failure onthe part of the assessee to make a full andtrue disclosure of all material factsnecessary for assessment ? ii. Whether the Appellate Tribunal wasright in law in upholding the reopening ofthe assessment based on the statementsrecorded at the time of survey, on the basisof which, the regular assessment wascompleted and not on any fresh materialsobtained subsequently ? iii. Whether the Appellate Tribunal wasright in law in holding that thereassessment is valid when reopening on thesame set of materials will amount to changeof opinion? andiv. Whether interest under Section 234Bcan be charged upto the date of reassessmentor only upto the date of regularassessment ?” 3. We have heard Mrs.G.Vardini Karthik, learned counsel forthe appellant/assessee and Mr.T.R.Senthilkumar, learned SeniorStanding Counsel accepting notice for the Revenue. 4. The short issue, which falls for consideration, is as towhether the reopening of assessment for the years underconsideration namely 2003-04 and 2004-05 was valid and as towhether the Assessing Officer was right in rejecting theobjections filed by the assessee for reopening, which orderswere confirmed by the Commissioner of Income Tax (Appeals) [forbrevity, the CIT(A)] and the Tribunal. 5. After conducting a survey, the scrutiny assessment wascompleted and the assessment orders were passed on 03.5.2005 forboth the years under consideration. Long after that, the noticesunder Section 148 of the Act were issued respectively on12.3.2010 and 17.9.2010 relying upon a statement recorded fromthe Managing Director of the assessee during the surveyproceedings. 6. The assessee’s case is that the reopening is a clear caseof change of opinion and that there is no allegation that theassessee failed to fully and truly disclose all the details. 5. After conducting a survey, the scrutiny assessment wascompleted and the assessment orders were passed on 03.5.2005 forboth the years under consideration. Long after that, the noticesunder Section 148 of the Act were issued respectively on12.3.2010 and 17.9.2010 relying upon a statement recorded fromthe Managing Director of the assessee during the surveyproceedings. 6. The assessee’s case is that the reopening is a clear caseof change of opinion and that there is no allegation that theassessee failed to fully and truly disclose all the details. 7. In our considered view, the CIT(A) as well as theTribunal rightly appreciated the factual position and noted thatthe scrutiny assessment was taken up since the survey underSection 133A of the Act was conducted and that during suchscrutiny assessment, the statement recorded from the ManagingDirector of the assessee was not taken into consideration by theAssessing Officer. Therefore, there was no opinion formed by theAssessing Officer on the said issue under the head of income.Further, the assessee themselves accepted that the income wasearned, but not disclosed in the returns. Accordingly, thereopening was confirmed. 8. With regard to the contention of the assessee that therewas a full and true disclosure by the assessee, on facts, wefind that in the instant case, the reopening has been done basedon the statement given by the Managing Director of the assesseeduring the survey. It is not the record of the assessee thatthey disclosed it in the returns. Hence, on facts, the AssessingOfficer, the CIT(A) and the Tribunal clearly held that thereopening was not a change of opinion, with which, we are inentire agreement. 9. Accordingly, the above tax case appeals are dismissed.The substantial questions of law framed are answered against theassessee. No costs. Consequently, the connected CMP is alsodismissed.rs Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'B' Bench. 2. The Income Tax Officer, Ward III(1), No.3, Gandhi Road, Salem. +1cc to M/s.G.Vardhini Karthik, Advocate, S.R.No.84142+1cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No.84134