Nordic Maritime Pte Ltd v. Commissioner Of Income Tax

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Special Appeal No. 4 of 2019 Nordic Maritime PTE Ltd. … Appellant Vs. Commissioner of Income Tax ...Respondent Dated: 07.01.2019 Coram: Hon’ble Ramesh Ranganathan, C.J.Hon’ble R.C. Khulbe, J. Ramesh Ranganathan, C.J. (Oral) Heard Mr. Abhimanyu Jhamba, learned counsel for the appellant and Mr. H.M. Bhatia, learned Senior Standing Counsel for Income Tax. 2. This appeal is preferred against the order passed by learned Single Judge in WPMS No.3708 of 2018 dated 11.12.2018. 3. The appellant herein invoked the jurisdiction of this Court questioning the show cause notice issued by the Commissioner of Income Tax (International Taxation), New Delhi dated 21.12.2017, exercising jurisdiction under Section 263 of the Income Tax Act, to revise the assessment order passed for the assessment year 2015-16 on 20.01.2017. 4. The case of the appellant-writ petitioner, before the learned Single Judge, was that the show cause notice suffered from several errors, both factual and legal and necessitated interference; and, even though the appellant-writ petitioner had filed its explanation to the show cause on 22.02.2018, they were entitled to invoke the jurisdiction of this Court questioning the said show cause notice, as it was contrary to law. 5. In the order under appeal, the learned Single Judge recorded a finding that, instead of filing the explanation, the apellant-writ petitioner had filed the writ petition, that too one year after the show cause notice was issued. 6. Both, Mr. Abhimanyu Jhamba, learned Counsel for the appellant and Mr. H.M. Bhatia, learned Senior Standing Counsel for Income Tax, would agree that the appellant-writ petitioner had, in fact, submitted its explanation to the show cause notice on 22.2.2018. 7. After taking note of the judgment of the Supreme Court in ‘Commissioner of I.T. Mumbai v. Amitabh Bachhan’ (2016) 11 SCC 748that, while exercising the revisional powers under Section 263 of the Income Tax Act, 1961, it was necessary for the Commissioner to come to the conclusion that the order was both erroneous as well as prejudicial to the interest of the revenue, the learned Single Judge observed that there was definitely an application of mind by the Commissioner, as both the aspects have come in the order of the Commissioner dated 21.12.2017. The writ petition was dismissed holding that no interference was called for by the Court. 8. Mr. Abhimanyu Jhamba, learned Counsel for the appellant-writ petitioner, would submit that, in the light of this findings recorded in the order under appeal, the Commissioner would no longer be required even to consider the appellant-writ petitioner’s reply to the show cause notice, as the learned Single Judge has affirmed the view expressed by the Commissioner in the show cause notice. This submission of the learned Counsel does not merit acceptance. The Commissioner was required, in terms of the law declared by the Supreme Court in ‘Commissioner of I.T. Mumbai v. Amitabh Bachhan’ (2016) 11 SCC 748, to record his prima facie opinion, in the show cause notice, that the assessment order was both erroneous and prejudicial to the interest of the revenue. The prima facieview, expressed by the Commissioner in the show cause notice, can always be rebutted by the appellant-writ petitioner in its reply to the show cause notice, and it is open to them to show that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. The view expressed by the Commissioner, in the show cause notice, is only his prima facie view; and the order of the learned Single Judge, holding that the Commissioner had applied his mind to both the aspects, is not a conclusive finding that the assessment order was erroneous and was prejudicial to the interest of the revenue, but only that the Commissioner had indicated in the show cause notice that the assessment order was erroneous as well as prejudicial to the interest of revenue. that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. The view expressed by the Commissioner, in the show cause notice, is only his prima facie view; and the order of the learned Single Judge, holding that the Commissioner had applied his mind to both the aspects, is not a conclusive finding that the assessment order was erroneous and was prejudicial to the interest of the revenue, but only that the Commissioner had indicated in the show cause notice that the assessment order was erroneous as well as prejudicial to the interest of revenue. 9. While we find no basis for the appellant-writ petitioner’s apprehension that the Commissioner would ignore the contentions put forth by them in their reply to the show cause notice, merely on account of the observations made by the learned Single Judge in the order in WPMS Mo.3708 of 2018 dated 11.12.2018, suffice it to direct the Commissioner, Income Tax to consider the appellant-writ petitioner’s reply to the show cause notice, and pass a reasoned order theruepon taking into account the contentions put forth in the reply, uninfluenced by any observations made either in the order under appeal or in the order now passed by us. 10. Subject to the aforesaid observations, the appeal fails and is, accordingly, dismissed. (R.C. Khulbe, J.) 07.01.2019 Rdang /Sukhbant (Ramesh Ranganathan, C.J.) 07.01.2019