Wp/3625/2013 Of Tecumseh Products India Pvt. Ltd v. The Asst. Commissioner Of Income Tax

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR Writ Petition No.3625 of 2003 DATED:29.11.2013 Between:Tecumesh Products India Pvt. Ltd.,Hyderabad. … PetitionerAnd The AssistantCommissioner of Income Tax,Hyderabad and another. ….Respondents THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA ANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR Writ Petition No.3625 of 2003 Order:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This writ petition has been filed challenging the noticeissued under Section 147 of the Income Tax Act, 1967 (for short‘the Act’) for reopening the assessment in relation to assessmentyear 2005-06. The notice has been issued for reopening ofthe assessment with a date, if we take it, on 30.3.2012. Therefore,going by arithmetic calculation, it is more than four years. It is notthe law that delayed notice cannot be issued, it can be, providedthat the conditions as mentioned in the first proviso to Section 147of the Act are fulfilled. We, therefore, set out the first proviso toSection 147 as hereunder: “Provided that where an assessment under sub-section (3) of Section 143 or this section has been made forthe relevant assessment year, no action shall be takenunder this section after the expiry of four years from theend of the relevant assessment year, unless any incomechargeable to tax has escaped assessment for suchassessment year by reason of the failure on the part of theassessee to make a return under Section 139 or inresponse to a notice issued under sub-section (1) ofSection 142 or Section 148 or to disclose fully and truly allmaterial facts necessary for his assessment for that assessment year.” It is clear that before any notice is issued after expiry offour years, the officer concerned must be satisfied that there hasbeen an escapement in assessment of income, which ischargeable to tax and this is because of the failure on the part ofthe petitioner-assessee to make a return under Section 139 of theAct or in response to a notice issued under sub-section (1) ofSection 142 or Section 148 for not disclosing the material facts. Therefore, the aforesaid conditions are sine qua non. Inother words, the aforesaid conditions must reflect in the noticeitself. In the absence of the same, exercise of jurisdiction inissuance of the notice under aforesaid provision is patently illegal. To draw an analogy, if the plaint does not disclose any cause ofaction in a suit, then such plaint is liable to be rejected. Similarly,if a complaint lodged under Section 154 of the Code of CriminalProcedure does not disclose prima facie, any cognizable offence,then such a complaint is liable to be quashed. The Legislature has created a right in favour of theassessee that assessment which has been made cannot bereopened after expiry of four years. But, such right is sought to betaken away in the situation as mentioned in the first proviso. Unless that situation exists, the issue is always a closed chapter. Mr.J.V. Prasad, learned counsel appearing for the Revenuesubmits that there are conditions in this regard. Unfortunately, as rightly pointed out by Mr. Ratnakar,nothing has been disclosed or shown even in the subsequentstages. Under the circumstances, we have no option, but to setaside the first notice dated 30.3.2012 and the consequential stepsbeing order dated 15.1.2013 issued by respondent No.2. However, it would be open for the Revenue, if so advised, to proceed in accordance with law taking impartial decision by takingnote of the records, if there exists a strong ground for issuance ofsuch notice. The writ petition is accordingly disposed of. Consequently, the miscellaneous applications, if anypending, shall also stand disposed of. No costs. _____________________ K.J. SENGUPTA,CJ _________________ SANJAY KUMAR, J 29.11.2013 PNB Unfortunately, as rightly pointed out by Mr. Ratnakar,nothing has been disclosed or shown even in the subsequentstages. Under the circumstances, we have no option, but to setaside the first notice dated 30.3.2012 and the consequential stepsbeing order dated 15.1.2013 issued by respondent No.2. However, it would be open for the Revenue, if so advised, to proceed in accordance with law taking impartial decision by takingnote of the records, if there exists a strong ground for issuance ofsuch notice. The writ petition is accordingly disposed of. Consequently, the miscellaneous applications, if anypending, shall also stand disposed of. No costs. _____________________ K.J. SENGUPTA,CJ _________________ SANJAY KUMAR, J 29.11.2013 PNB If the Assessing Officer, has no reason to believethat any income chargeable to tax has escapedassessment for any assessment year, he may, subject tothe provisions of Sections 148 to 153, assess or reassesssuch income and also any other income chargeable to taxwhich has escaped assessment and which comes to hisnotice subsequently in the course of the proceedings underthis section, or recompute the loss or the depreciationallowance or any other allowance, as the case may be, forthe assessment year concerned (hereafter in this sectionand in sections 148 to 153 referred to as the relevantassessment year). Provided further that nothing contained in the firstproviso shall apply in case where any income in relation toany asset (including financial interest in any entity locatedoutside India, chargeable to tax,has escaped assessmentfor any assessment year.”