Wp/33803/2018 Of Rajamannar Ramaswamy v. Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.06.2021CORAM THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM W.P.No.33803 of 2018and W.M.P.No.39259 of 2018 Rajmannar Ramaswamy ... Petitioner 1.Income Tax Officer, Ward-1(3), Tirupur. 2.Income Tax Officer (Intl. Taxation), Coimbatore, 1510, Mayflower, Midcity Building, Trichy Road, Coimbatore 18. ... Respondents Prayer : Writ Petition filed under Article 226 of theConstitution of India, to issue a Writ of Certiorari, callingfor the records on the file of the respondents in PAN: and quash the impugned notice issued by the 1[st]respondent under Section 148 of the Income Tax Act, 1961, dated31.03.2017aswelltheimpugnedletterinPAN:AMUPR6293E/ITO/Intl.Taxn/CBE/2018-19 dated 06.12.2018, issued bythe 2[nd] respondent, as arbitrary and without jurisdiction. The notice issued under Section 148 of the Income Tax Act,1961 (hereinafter referred to as 'the Act') in proceeding dated31.03.2017 as well as the impugned letter issued by the 2[nd]respondent on 06.12.2018 are sought to be quashed in the presentWrit Petition. 2.The petitioner states that he is not an Assessee on thefile of the Income Tax Officer, Ward No.1(3), Tirupur, India,and he has no taxable income in India, except, certain bankinterest in which TDS has been duly deducted by the banks under https://hcservices.ecourts.gov.in/hcservices/ Section 195 of the Act. The petitioner states that he hadapplied for a Permanent Account Number (hereinafter referred toas 'PAN'), showing his mother's address as No.488, Mani Road,Kunnathur, Erode-638 103. The PAN was allotted in PAN No: . Since the petitioner is a Non-Resident Indian, hehas not filed any Income Tax Returns for the last fifteen yearsand the said factors are known to the respondents-Income TaxDepartment also. Shockingly, the 1[st] respondent has issued anotice under Section 148 of the Act, dated 31.03.2017 and thesaid notice was booked at Tirpur Post-Office only on 04.04.2017and the same was received at the native place of the writpetitioner, more specifically, by his brother, on 05.04.2017.The notice contemplates that the 1[st] respondent has “reason tobelieve” that there is escapement of income for the AssessmentYear 2010-11. However, the notice under Section 148 of the Act,dated 31.03.2017, was sent to the native address of thepetitioner in India and it was collected by his brother, withwhom the petitioner has no cordial relationship. 3.The learned counsel for the petitioner made a submissionthat admittedly, the 1[st] respondent has no jurisdiction to issuenotice under Section 148 of the Act. However, subsequent lettersent by the 2[nd] respondent in proceeding dated 06.12.2018 is alsowithout jurisdiction, as Section 148 notice was not served onthe writ petitioner, as contemplated under the provision.Section 148, in unambiguous terms, contemplates that the noticemust be served to the assessee. However, no such notice wasserved to the petitioner in the present case. This apart, thelast date for reopening of assessment falls on 31.03.2017.However, the notice cover was franked by the concerned Post-Office only on 04.04.2017 and therefore, the notice was issuedbeyond the period of limitation and on that ground also, theimpugned orders are liable to be set aside. It is contended thatthe 1[st] respondent has no jurisdiction, as the petitioner is aresident of Belgium right from the year, 1991, and therespondents also have the knowledge about this fact and thepetitioner, being a Non-Resident Indian, having no income inIndia, need not file any Return of Income. In respect of thebank deposits, the TDS are being recovered by the bankers andtherefore, the very initiation is without jurisdiction, beyondthe period of time limit contemplated and the transferring ofproceeding to the 2[nd] respondent is also improper. For all thesereasons, the impugned orders are liable to be set aside. 4.The learned Senior Standing Counsel appearing for therespondents disputed the said grounds by stating that thepetitioner submitted his application for getting PAN byfurnishing the address, wherein his mother resides. If at allthere is any change of address, it is the duty of the assesseeto inform the same to the department. The department issued 4.The learned Senior Standing Counsel appearing for therespondents disputed the said grounds by stating that thepetitioner submitted his application for getting PAN byfurnishing the address, wherein his mother resides. If at allthere is any change of address, it is the duty of the assesseeto inform the same to the department. The department issued notice based on the last known address, which is available inthe PAN of the assessee. It is not in dispute, the notice underSection 148 of the Act was issued to the address furnished bythe petitioner and recorded in the PAN records. Therefore, thedepartment cannot be blamed and in the event of any change ofaddress, it is the duty of the assessee to submit properapplication and change the address in PAN, which the petitionerhas failed to do. Therefore, he cannot now rely on the groundthat the notice under Section 148 of the Act was issued in awrong note. Even in respect of the subsequent order passed bythe 2[nd] respondent, it is clearly stated that the petitioner hasto submit his reply, which should reach the office of the 2[nd]respondent on or before 14.12.2018, as the case is getting timebarred on 31.12.2018. The 2[nd] respondent requested the petitionerto furnish the records and details, enabling the authorities toproceed with re-assessment proceedings. Relying on the saidfactual aspects, the learned Senior Standing Counsel made asubmission that the Writ Petition is pre-matured, as thepetitioner has to furnish the records and the department has togive the reasons for reopening of assessment and the procedurescontemplated under the provisions of the Act and the principleslaid down by the Hon'ble Apex Court in the case of GKNDriveshafts India Ltd., Vs. ITO reported in 259 ITR 19 (SC) areto be followed scrupulously. As far as the jurisdiction point isconcerned, undoubtedly, the 1[st] respondent issued the noticeunder Section 148 of the Act in the last known address of thepetitioner and subsequently, when the department came to knowthat the 2[nd] respondent is the jurisdictional officer, the fileswere transferred to the 2[nd] respondent, who in turn, issued aletter to the petitioner on 06.12.2018, asking him to furnishinformation and details for the purpose of proceeding with there-assessment. Instead of furnishing the details and producingthe documents, the petitioner has chosen to file the WritPetition, mainly on the ground that the notice was issued beyondthe period of limitation. As far as the last date for issuanceof notice, under Section 148 of the Act, in the present case isconcerned, it is 31.03.2017 and the respondents have producedthe postal receipt, showing that the notice was registeredbefore the concerned Post-Office on 31.03.2017. Thus, for allpurposes, the notice has been issued on 31.03.2017 and deliveryof the cover to the assessee or in the last known address, maynot be a deciding factor for the purpose of retaining the periodof limitation. Once the notice under Section 148 of the Act isissued within the period of limitation by despatching the noticein the Post-Office, the same would be sufficient to meet out therequirements. Section 149 of the Act itself contemplates timelimit for notice. Once the time limit is contemplated and withinthe time limit, the notice has been despatched from the officeof the Income Tax Department, the same would be sufficient tomeet out the requirement and delivery of the notice cannot be considered for the purpose of invalidating the notice issued bythe authority, before the time limit. considered for the purpose of invalidating the notice issued bythe authority, before the time limit. 5.It is possible in many circumstances, the addressee mayreceive the cover one or two days later or on account of variousother reasons, the postal department may deliver after three orfour days and all these circumstances are possible. Thus, thedelivery of cover is immaterial and if the department could ableto establish that the notice was issued and despatched beforethe expiry of limitation, the same would be sufficient to meetout the requirement of Section 149 of the Act. In the presentcase, the postal receipt is produced to establish that thenotice was despatched on 31.03.2017 and therefore, the point oflimitation raised stands failed. 6.The authorities once identified that the jurisdictionaloffice is different, then transfer of such files to thejurisdictional office is the procedure to be followed and in thepresent case, the 1[st] respondent rightly transferred the case tothe 2[nd] respondent to proceed with reopening of assessmentproceedings and the 2[nd] respondent, in turn, sent a letter to thepetitioner/assessee on 06.12.2018 and the petitioner, instead ofresponding to the letter, has chosen to file the Writ Petitionand therefore, this Court is of the considered opinion that theWrit Petition is pre-matured and the petitioner has to establishhis case by producing documents and furnishing information tothe 2[nd] respondent, who, in turn, has to follow the procedurescontemplated and proceed with re-assessment proceedings.Recently in the case of PCIT Vs. IVen Interactive Limited(Supreme Court) in Civil Appeal No.8132 of 2019, dated18.10.2019, the Hon'ble Supreme Court has held as follows: “7.Now so far as the observations made by theHigh Court while concurring with the view of thelearned Tribunal that merely by filing of returnof income with the new address, it shall be enoughfor the assessee to discharge its legalresponsibility for observing proper proceduralsteps as per the Companies Act and the Income TaxAct is concerned, we are of the opinion that merementioning of the new address in the return ofincome without specifically intimating theAssessing Officer with respect to change ofaddress and without getting the PAN databasechanged, is not enough and sufficient. In absenceof any specific intimation to the AssessingOfficer with respect to change in address and/orchange in the name of the assessee, the AssessingOfficer would be justified in sending the noticeat the available address mentioned in the PANdatabase of the assessee, more particularly when the return has been filed under E-Module scheme.It is required to be noted that notices underSection 143(2) of the 1961 Act are issued onselection of case generated under automated systemof the Department which picks up the address ofthe assessee from the database of the PAN.Therefore, the change of address in the databaseof PAN is must, in case of change in the name ofthe company and/or any change in the registeredoffice or the corporate office and the same has tobe intimated to the Registrar of Companies in theprescribed format (Form 18) and after completingwith the said requirement, the assessee isrequired to approach the Department with the copyof the said document and the assessee is alsorequired to make an application for change ofaddress in the departmental database of PAN, whichin the present case the assessee has failed to doso. ” In view of the facts and circumstances, the petitioner has notraised any acceptable ground for the purpose of interfering withthe orders impugned. 7.Accordingly, the Writ Petition is devoid of merits andstandsdismissed.Nocosts. Consequently,connectedMiscellaneous Petition is closed. Sd/- Assistant Registrar(CS IV) //True Copy// gsaTo Sub Assistant Registrar 1.The Income Tax Officer, Ward-1(3), Tirupur. In view of the facts and circumstances, the petitioner has notraised any acceptable ground for the purpose of interfering withthe orders impugned. 7.Accordingly, the Writ Petition is devoid of merits andstandsdismissed.Nocosts. Consequently,connectedMiscellaneous Petition is closed. Sd/- Assistant Registrar(CS IV) //True Copy// gsaTo Sub Assistant Registrar 1.The Income Tax Officer, Ward-1(3), Tirupur. 2.Income Tax Officer (Intl. Taxation), Coimbatore, 1510, Mayflower, Midcity Building, Trichy Road, Coimbatore 18. +1cc to Mr.A.P.Srinivas, Advocate Sr.30001 pl[co]srg 22/07/2021