Wp/29614/2017 Of Kovalam Santhana Krishnanmohan v. Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM Writ Petition No.29614 of 2017 & W.M.P.Nos.31898 & 31899 of 2017 Kovalam Santhana Krishnan Mohan...Petitioner .Vs. Income Tax Officer, Ward-1,Income Tax Office, Ootacamund ...Respondent Prayer: The writ petition filed under Article 226 of theConstitution of India to issue a writ of Certiorari Mandamus,calling for the records of the respondent comprised in itsnotice issued under Section 148 of the Income Tax Act, 1961, forPAN:AMNPM3778N, dated 30.03.2017 and all proceedings infurtherance thereof, including but not limited to the orderdated 25.09.2017 passed by the respondent, and to quash the sameas arbitrary, unjust and illegal, and to consequently forbearthe respondent from in any manner reassessing the petitioner'sincome under Section 147 of the Income Tax Act,1961 for theAssessment Year 2010-11 and pass orders. For Petitioner : Mr.Suhrith ParthasarathyFor Respondent : Mr. Sundareshwaran, SSC O R D E R Heard Mr.Suhrith Parthasarathy learned counsel for thepetitioner and Mr. Sundareshwaran, learned Senior Senior Counselaccepting notice on behalf of the respondent. By consent, thewrit petition itself is taken up for final disposal. 2.The petitioner is aggrieved by the impugned order passedby the respondent rejecting the petitioner's objections to anotice dated 30.03.2017 issued under Section 148 of the IncomeTax Act, 1961 for re-opening the assessment for the year 2010-2011. The petitioner by representation dated 03.08.2017 soughtfor the reasons for re-opening, which were furnished by therespondent vide reply dated 08.08.2017. The allegation was thatas per the records, the petitioner had not filed his return ofincome for the Assessment Year 2010-2011 and on verifying theITS details available in the AST, it is found that thepetitioner sold immovable properties to the tune ofRs.4,81,92,575/- during the financial year 2009-2010 (relavant https://hcservices.ecourts.gov.in/hcservices/ to the assessment year 2010-2011). Apart from that, there wasalsoanallegationthatthepetitionerreceivedprofessional/technical services fees rendered for a company.Therefore, the respondent stated that since the petitioner hasnot filed return of income admitting any income from capitalgains or profession, he has reason to hold that the incomechargeable to tax has escaped assessment as per Section 147 ofthe Income Tax Act. 3.The petitioner submitted a reply on 18.08.2017 statingthat as the transactions were effected during the assessmentyear 2009-2010, the petitioner filed his return of income, thereturns was accepted and the tax has been paid. Since, there wasno income for the assessment year 2010-2011, the petitioner didnot file his return. 4. On receipt of the objections the respondent, who appearsto have been a very reasonable officer, sent the notice dated11.09.2017 to the petitioner, by which, the petitioner wasdirected to produce a copy of the profit and loss account,balance sheet and auditor's report Under Section 44 AB of theAct for the assessment year 2009-2010 with copies of the saledeeds as mentioned in the earlier order dated 18.08.2017, on orbefore 27.9.2017, to verify the petitioner's contention. 5.Thus it is seen that the respondent not only granted anopportunity to the petitioner to produce the books of accounts,but also fixed a preemptory date before, which he should do.Thus, a man of ordinary prudence would be of the opinion thatthe Assessing Officer would definitely wait till 27.09.2017, ashe had already fixed a date for production of records.Unfortunately, the respondent appears to have been in a hurryand has passed the impugned order dated 25.09.2017. 5.Thus it is seen that the respondent not only granted anopportunity to the petitioner to produce the books of accounts,but also fixed a preemptory date before, which he should do.Thus, a man of ordinary prudence would be of the opinion thatthe Assessing Officer would definitely wait till 27.09.2017, ashe had already fixed a date for production of records.Unfortunately, the respondent appears to have been in a hurryand has passed the impugned order dated 25.09.2017. 6. On the perusal of the impugned order, it is seen thatthe respondent has scanned the explanations given by thepetitioner for the notice for the re-opening and incorporatedthe same in the impugned order and the reason for rejection ofthe objections appears to be only one, which is to the effectthat one of the nine transactions was dated 01.04.2009 relatingto the assessment year 2010-2011. 7. Immediately thereafter, the petitioner had given a letterdated 27.09.2017 stating that the entire transactions pointedout in the reasons for re-opening have already been consideredfor the assessment year 2009-2010, as the income has accrued inthe earlier assessment year and therefore, there is no escapedincome in the assessment year 2010-11. The petitioner enclosedcopies of the sale deed and stated that the possession has beenhanded over in February 2009 itself. https://hcservices.ecourts.gov.in/hcservices/ 8. Therefore, it is contended that the respondent could nothave passed the impugned order on 25.9.2017, as he fixed thedate for production of documents on 27.9.2017. 9. The above facts clearly show that there has beenviolation of the principles of natural justice. The petitionerhaving been afforded an opportunity to produce the records on orbefore 27.9.2017, the respondent should have waited till27.9.2017. 10. The explanation offered by the learned senior standingcounsel that the officer himself has secured the documents fromthe concerned Sub-Registrar and therefore, proceeded to pass theimpugned order, is not a convincing reply, as the officer byintimation dated 11.09.2017, not only called for the copies ofdocuments, but also the copies of the profit and loss account,the balance sheet and auditor's report Under Section 44 AB ofthe Act for the assessment year 2009-2010. Thus this Court isconvinced that the impugned order has been passed in violationof the principles of natural justice. These are sufficientreasons to hold that the impugned order cannot stand to the testof law. 11. In the result, the writ petition is allowed, theimpugned order is set aside and the matter is remitted back tothe respondent for a fresh consideration. The respondent shallafford an opportunity of personal hearing, peruse the documentsfiled by the petitioner along with their representation dated27.9.2017, examine the Profit and loss account, Balance Sheetand Auditor's report under Section 44 AB of the Act for theassessment year 2009-2010 and pass a reasoned order on meritsand in accordance with law. No cots. Consequently, the connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS-VII) //True Copy// Sub Assistant Registrar smnTo,Income Tax Officer, Ward-1,Income Tax Officer, Ootacamund+ 1 cc to MR. Suhristh Parthasarathy, Advocate SR.82069+ 1 cc to Mr. A.P. Srinivas, Sr. Standing Counsel SR.82638 Writ PetitionNo.29614 of 2017 & W.M.P.Nos.31898 & 31899 of 2017 EU(05/12/2017) https://hcservices.ecourts.gov.in/hcservices/