Wp(C)/40763/2018 Of 3G Mobile World v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI THURSDAY, THE 13TH DAY OF JUNE 2019 / 23RD JYAISHTA, 1941WP(C).No. 40763 of 2018 PETITIONER/S: M/S.3G MOBILE WORLD5-3370/3371, MAVOOR ROAD, CALICUT 673 004 REPRESENTED BY ITS MANAGING PARTNERE SRI A.K SHAJI. BY ADVS.SRI.ANIL D. NAIRSMT. ARYA ANILSMT. NILOOFAR O. NIZAMSRI.SREEJITH R.NAIR RESPONDENT/S:INCOME TAX OFFICERWARD-1(2), KOZHIKODEBY ADV. SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.06.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J U D G M E N T Heard Mr. Anil D Nair, the petitioner's counsel andMr.Christopher Abraham, the learned Standing Counsel for therespondent. 2.On 05.12.2017 survey under Section 133A of theIncome Tax Act, 1961 (for short 'the Act') was conducted in thebusiness premise of the petitioner/assessee. The surveyresulted in reopening of assessment for the Assessment Years2013-14, 2014-15, 2015-16 and 2016-17 under Section 147 of theAct. The respondent has selected the return for the AssessmentYear 2017-18 under the category/ heading 'Manual Verificationof Assessment'. The respondent at the time of survey under aninventory of records made and in accordance with law hasrecovered few documents from the systems maintained by theassessee. This Court, by choice, keeping in view the nature oforder this Court is proposing to pass, does not refer to the W.P.(C) No. 40763/2018 allegations made against the petitioner and the reply thepetitioner has in this behalf. For the present purpose, it wouldsuffice if reference is made to the following: 3.The respondent through Exts.P4, P5 and P6 issuednotice under Section 148 of the Act proposing to assess/reassess the income of the petitioner for Assessment Years2013-14, 2014-15, 2015-16 and called upon the petitioner to file areturn in the prescribed form. The petitioner in responsethereto insisted upon the respondent to furnish the reasons forreopening the assessment. Exts.P7, P8 and P9 refer to thereasons warranting reassessment into subject assessmentorders. The petitioner through Ext.P10 filed its reply andthrough Ext.P13 made the following requests: “The reopening of assessment are done by you on the basisof certain incomplete Trial Balance taken by you from theelectronic equipments. Kindly note that any information or data taken from the computer, the determination related to the admissibility andlegitimacy of such data in whatever form has to beundertaken as per the mandatory presumption of section65A, 65B of the Indian Evidence Act read with Section 93 andsecond schedule of the Information Technology Act 2000before adopting such evidence for the purpose ofassessment. I may submit that none of the legal requirement as above arecompleted with before proceeding with the informationfrom computer. Kindly bring to record my above objection for the proposedassessment in view of the above circumstances.” 4.Hence the present writ petition for the following reliefs: “(a)Call for the records leading to the issuance of Exhibits P4, P5, P6 orders and quash the same by issuing a writ of certiorari. (b)Pending hearing and final disposal of the Writ Petition, thisHon'ble Court be pleased to grant stay of recovery ofproceedings pursuant to Exhibits P4, P5 and P6.Hon'ble Court be pleased to grant stay of recovery ofproceedings pursuant to Exhibits P4, P5 and P6. (c)Issue such other and further reliefs as this Hon'ble Courtmay deed fit and proper in the interest of justice.”may deed fit and proper in the interest of justice.” 5.Sri Anil D Nair has not made submissions on the principal challenge made in the writ petition, but has limited 4.Hence the present writ petition for the following reliefs: “(a)Call for the records leading to the issuance of Exhibits P4, P5, P6 orders and quash the same by issuing a writ of certiorari. (b)Pending hearing and final disposal of the Writ Petition, thisHon'ble Court be pleased to grant stay of recovery ofproceedings pursuant to Exhibits P4, P5 and P6.Hon'ble Court be pleased to grant stay of recovery ofproceedings pursuant to Exhibits P4, P5 and P6. (c)Issue such other and further reliefs as this Hon'ble Courtmay deed fit and proper in the interest of justice.”may deed fit and proper in the interest of justice.” 5.Sri Anil D Nair has not made submissions on the principal challenge made in the writ petition, but has limited his submission to direct the respondent to consider and disposeof Ext.P13 in as much as a decision on Ext.P13 enables thepetitioner to appreciate where the petitioner stands vis-à-visthe documents seized from the custody of petitioner-assesse. Inother words, the request of petitioner is for a ruling on the viewthe respondent may likely to take while reassessing or assessingunder Section 148 of the Act and that whether the assessment isgoing to be exclusively on the material now collected or afterreferring to the entire material available on record or not. 6.The learned counsel could not invite the attention ofthe Court to any Rule or Section which mandates therespondent to first give a ruling on Ext.P13. However, it iscontended that the respondent is required to keep in viewSections 65A and 65B of the Indian Evidence Act, Section 93 andSecond Schedule of Information and Technology Act, 2000 readwith Section 2, 22AA and Section 132(i)(b) of the Income Tax W.P.(C) No. 40763/2018 Act. According to the petitioner the documents now seized by the respondent in the survey conducted on 05.12.2017 do nothave evidentiary value under the Evidence Act and are to beexcluded completely from consideration. Therefore, he praysfor a direction to consider Ext.P13 before hand and intimate thedecision 7.Mr. Christopher Abraham opposes writ prayer in allfours. According to him the prayer in Ext.P13 cannot and couldnot be entertained, independent of the procedure under Section148 of Income Tax Act. According to the Standing Counsel theinstant case is one of assessment/ reassessment upon reopeningthe self assessment already accepted by the Department. Therespondent has already given the reasons while the assessmentsare reopened, either assessed or reassessed. The respondent'sdiscretion in law cannot be stifled by this Court with a directionto express a view on Ext.P13. Mr. Christopher Abraham submits W.P.(C) No. 40763/2018 that applying Evidence Act or Information Technology Act is firstly unavailable and illegal. The provisions of Evidence Actare not made applicable and that the data retrieved from orcollected from a system is appreciated as a document oraccount by keeping the view the definition assigned to ‘books ofaccounts’, ‘ledgers’, ‘documents’ etc under the Act. 8.According to him, the assessments are reopened because the revenue doubts that the assessee has inflated theexpenditure and thereby has not shown the correct income.The assesse is now called upon to file the return and theassessee can certainly file a return and bring home genuinenessof each one of the entries the assessee relies on and prays fordismissing the writ petition. 9.I have perused the records and taken note of the rival submissions made by the counsel appearing for the parties. Thepetitioner, as already noted, has not pressed the substantive 8.According to him, the assessments are reopened because the revenue doubts that the assessee has inflated theexpenditure and thereby has not shown the correct income.The assesse is now called upon to file the return and theassessee can certainly file a return and bring home genuinenessof each one of the entries the assessee relies on and prays fordismissing the writ petition. 9.I have perused the records and taken note of the rival submissions made by the counsel appearing for the parties. Thepetitioner, as already noted, has not pressed the substantive prayers made in the writ petition but an attempt has been madeto convince this Court for issuing a direction to considerExt.P13. Ext.P13 is already excerpted and this Court is of theview that the very request now made for a direction forconsideration of Ext.P13 firstly is premature and unavailable atthe stage of consideration of notice under Section 148 of theAct. The respondent has set in motion the steps forreassessment upon reopening the assessment orders. Thepetitioner is afforded opportunity to substantiate its return.Under those circumstances, the petitioner by praying for a writof mandamus or direction as noted above, would virtually laythe path on which the proceedings under Section 148 are to beundertaken and concluded. This Court is of the view that nowthat the proceedings under Section 148 are initiated, thecommencement as well as conclusion are very well defined bythe procedure under the Income Tax Act. In other words, the Assessing Officer is seized of the issue and the prayer now made if is considered the same amounts restricting the discretion bythis Court and in the peculiar facts of this case, this Court is ofthe view that such directions amount to intercepting theotherwise duly regulated power of Assessing Officer andsubstituting the view of this Court. This Court is not persuadedto accept the request of petitioner. Therefore, no ground ismade out warranting the issuance of a direction to the limitedextent noted above. 10.The writ petition fails and dismissed. However, Mr.Anil D Nair apprehends that the objections that are available inthis behalf may also be shut out by understanding the order ofthis Court in a different way, to avoid such eventuality herequests the Court to permit the petitioner to file additionalcomprehensive reply to the notices impugned in the writpetition. Mr. Christopher Abraham submits that three weeks’ time from today can be considered and given to petitioner.Hence the petitioner is given three weeks’ more time fromtoday to file additional/comprehensive reply to the noticesimpugned in the writ petition. The respondent considers thematerial on record and disposes of the pending proceedingsexpeditiously. Sd/- S.V.BHATTIJUDGE jjj APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1TRUE COPY OF THE ASSESSMENT ORDER DATED 22-10-2015 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-142015 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P2TRUE COPY OF THE ACKNOWLEDGMENT UNDER SEC. 143(1) FOR THE ASSESSMENT YEAR 2014-15143(1) FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P3TRUE COPY OF ORDER DATED 30-11-2017 ISSUED BY THERESPONDENT FOR THE ASSESSMENT YEAR 2015-16RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P4TRUE COPY OF THE PROCEEDINGS DATED 28-3-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P5TRUE COPY OF THE PROCEEDINGS DATED 30-03-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P6TRUE COPY OF THE PROCEEDINGS DATED 31-3-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P7TRUE COPY OF THE LETTER DATED 4-12-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P3TRUE COPY OF ORDER DATED 30-11-2017 ISSUED BY THERESPONDENT FOR THE ASSESSMENT YEAR 2015-16RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P4TRUE COPY OF THE PROCEEDINGS DATED 28-3-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P5TRUE COPY OF THE PROCEEDINGS DATED 30-03-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P6TRUE COPY OF THE PROCEEDINGS DATED 31-3-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P7TRUE COPY OF THE LETTER DATED 4-12-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14THE RESPONDENT FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P8TRUE COPY OF THE LETTER DATED 4-12-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P9TRUE COPY OF THE LETTER DATED 4-12-2018 ISSUED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P10TRUE COPY OF THE LETTER DATED 1-12-2018 SUBMITTED BY THE PETITIONER TO THE RESPONDENT FOR THE YEAR YEAR 2013-14SUBMITTED BY THE PETITIONER TO THE RESPONDENT FOR THE YEAR YEAR 2013-14 W.P.(C) No. 40763/2018 EXHIBIT P11 TRUE COPY OF LETTER DATED 1.12.2018 SUBMITTED BY THE PETITIONER TO THE RESPONDENT FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P12TRUE COPY OF DATED 1.12.2018 SUBMITTED BY THE PETITIONER TO THE RESPONDENT. EXHIBIT P13TRUE COPY OF LETTER DATED 8.12.2018 SUBMITTED BY THE PETITIONER TO THE RESPONDENT. EXHIBIT P14TRUE COPY OF THE PROCEEDINGS UNDER SEC.133A IN THE CORPORATE OFFICE EXHIBIT P15 TRUE COPY OF THE PROCEEDINGS UNDER SEC.133A IN THE BRANCH OFFICE