St. Mary's Road, Chennai v. Assistant Commissioner Of Income Tax,Large Tax Payer Unit-I

IN THE HIGH COURT OF JUDICATURE AT MADRAS The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Mr.Justice SATHI KUMAR SUKUMARA KURUP W.A. No. 2415 of 2021and M/s. Cognizant Technology Solutions India Private Limited, Menon Eternity Building, 6th Floor, New No.165, Old No.110, St. Mary's Road, Chennai. ...Appellant Vs. 1. Assistant Commissioner of Income Tax,Large Tax Payer Unit-I,1775, Jawaharlal Nehru Inner Ring Road,Anna Nagar Western Extension,Chennai - 600 101. 2. Commissioner of Income Tax, Large Tax Payer Unit-I, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar Western Extension,Chennai - 600 101. ... Respondents Appeal filed under Clause 15 of Letters Patent, praying toallow the above Writ Appeal by setting aside the order dated02.08.2021 passed in W.P.No. 10051 of 2015 on the file of thisHon'ble Court and allow the Writ Petition. Prayer in W.P.No.10051 of 2015: Writ Petition filed under Article 226 of the Constitution ofIndia to issue Writ of Certiorari calling for the records andproceedings of the case and after examining the legalityvalidity and propriety thereof be pleased to quash the Impugned https://hcservices.ecourts.gov.in/hcservices/ Notice dated 28 March 2014 issued under Section 148 of theIncome Tax Act 1961 for Assessment Year 2007-08 by therespondent No.1 and the Impugned Orders disposing of Objectionsdated 5 June 2014 and 29 December 2014 passed by the respondentNo.1 as being wholly without jurisdiction and legally invalid. For Appellant:Mr. N.V.BalajiFor Respondents:Mr. A.N.R.JayaprathapSenior Standing Counsel (Delivered by T.S.Sivagnanam, J.) This appeal filed by the assessee is directed against theorder dated 02.08.2021 in W.P. No.10051 of 2015 filed by theappellant questioning the validity and propriety of the noticedated 28.03.2014 issued by the first respondent under Section148 of the Income Tax Act, 1961 ('the Act' for short) for theassessment year 2007-08 and the proceedings of the firstrespondent disposing of the assessee's objections videproceedings dated 05.06.2014 and 29.12.2014. 2.The writ petition was dismissed by directing thepetitioner to participate in the reassessment proceedings andthe correctness of the said order is challenged in this writappeal. 3.Heard Mr. N.V.Balaji, Learned counsel appearing for theappellant and Mr. A.N.R.Jayaprathap, Learned Senior StandingCounsel, who accepts notice on behalf of the respondent. 4.We need not labour much to find a solution to thecontroversy in the case. The primary ground on which theinitiation of the proceedings under Section 147/148 of the Actwas questioned by the appellant-assessee is that the identicalissue was subject matter of consideration in assessee's own casefor the Assessment year 2008-09 and the matter travelled up toIncome Tax Appellate Tribunal, Chennai (the Tribunal) and byorder dated 11.03.2014, the Tribunal held in favour of theappellant-assessee and the matter had attained finality.Further, the appellant-assessee had contended that the saiddecision rendered by the Tribunal for the assessment year 2008-09 was followed by the Commissioner of Income Tax (Appeals) in its order dated 20.03.2014 for the assessment year 2009-10 andthere is no distinguishing feature for the assessment year underconsideration, viz., 2007-08 for the Assessing Officer to take adifferent view. 5.Further, the assessee also contended that in terms ofthe Circular No.694, Notification No. 11521 and Circular No. 1,the activities for which the present re-assessment proceedingshave been initiated are squarely eligible for deduction underSection 10-A/10-AA of the Act. its order dated 20.03.2014 for the assessment year 2009-10 andthere is no distinguishing feature for the assessment year underconsideration, viz., 2007-08 for the Assessing Officer to take adifferent view. 5.Further, the assessee also contended that in terms ofthe Circular No.694, Notification No. 11521 and Circular No. 1,the activities for which the present re-assessment proceedingshave been initiated are squarely eligible for deduction underSection 10-A/10-AA of the Act. 6.Apart from the above grounds raised by the assessee,other grounds were also raised justifying their claim fordeduction under Section 10-A/10-AA of the Act by referring tothe nature of activities of the appellant-assessee. That apart,it was pointed out that the reopening having been done after aperiod of four years from the end of the assessment year underconsideration, unless fresh tangible material is available withthe assessing officer the reopening cannot be sorted out and itwould amount to review of the assessment order. 7.The objections were disposed of by the AssessingOfficer vide proceedings dated 05.06.2014 and 29.12.2014 and onperusal of the said proceedings, we find that the AssessingOfficer has not considered the specific objection raised by theassessee with regard to the effect of the decision of theTribunal for the assessment year 2008-09 and the order of theCIT(A) for the assessment year 2009-10 which would be binding onthe assessing officer. In fact, the assessing officer in hisproceedings dated 05.06.2014 and 29.12.2014 has not even dealtwith decisions. Before the Learned Writ Court, the assesseereiterated the contentions, which were raised in the objectionsdated 10.10.2014. The Learned Single Bench, after taking note ofthe contentions advanced by the assessee in paragraph no.34 ofthe impugned order, states that no doubt the appellant hasraised a ground that the issue has also been considered infavour of the assessee by the Tribunal and CIT(A), with regardto the other grounds, the Learned Single Bench denies the reliefto the assessee solely on the ground that the details have to begone into elaborately for the purpose of appreciating thegrounds raised by the assessee. 9.In our considered view, no such elaborate exercisewould be required as on the understanding of the AssessingOfficer itself, the issue has attained finality for the assessment years 2008-09 and 2009-10 and this is precisely ofthe reason the Assessing Officer while disposing of theobjections has not even touched upon the objections raised bythe assessee to the reopening proceedings by relying upon theorder of the ITAT and CIT(A) for the relevant assessment years. 10.That apart, we find from the reasons for reopening,there is not a whisper as to how the reopening was valid and asto whether the assessing officer has any tangible material tojustify the reopening. That apart, the assessing officer has notpointed out any distinguishing factual feature to justify hisexercise of power under Section 147 of the Act. 11.Thus, when the same kind of transaction for twoassessment years has been examined and relief has been grantedto the appellant-assessee and for the subsequent assessmentyear, the assessee has been granted the deduction under Section10A/10AA even by the Assessing Officer himself, we are of theview that the issue is covered in favour of the assessee, in thelight of the decision of the ITAT and CIT(A) and there isabsolutely no justification to reopen the same. 12.Hence, the Writ Appeal is allowed and the order passedby this Court in W.P. No. 10051 of 2015 dated 02.08.2021 is setaside, and the writ petition is also allowed, and theproceedings impugned in the writ petition is quashed.Consequently, the connected Civil Miscellaneous Petitions areclosed. No costs. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar mayaTo 12.Hence, the Writ Appeal is allowed and the order passedby this Court in W.P. No. 10051 of 2015 dated 02.08.2021 is setaside, and the writ petition is also allowed, and theproceedings impugned in the writ petition is quashed.Consequently, the connected Civil Miscellaneous Petitions areclosed. No costs. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar mayaTo 1. Assistant Commissioner of Income Tax, Large Tax Payer Unit-I, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar Western Extension, Chennai - 600 101. 2. Commissioner of Income Tax, Large Tax Payer Unit-I, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar Western Extension, Chennai - 600 101. +1cc to M/s.N.V.Balaji, Advocate Sr.48677+1cc to M/s.A.P.Srinivas, Advocate Sr.48441 smi[co]srg 26/10/2021 W.A. No. 2415 of 2021