TMI Blog2012 (6) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent that the petitioner had suppressed certain material facts due to which the original assessment order passed by the respondent is liable to be reassessed – in favour of assessee. - W.P.No.23899 of 2011 - - - Dated:- 27-4-2012 - MR.JUSTICE M.JAICHANDREN, J. For petitioner : Mr.Jehangir D.J.Mistri Senior Advocate for Mr.R.Sivaraman For respondent : Mr.J.Narayanasamy O R D E R Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent. 2. This writ petition has been filed praying that this Court may be pleased to issue a Writ of Certiorari to call for and quash the impugned notice, dated 25.3.2011, issued under Section 148 of the Income Tax Act, 1961, (hereinafter referred to as `the Act') and the consequential proceedings, dated 28.9.2011, issued by the respondent, rejecting the objections raised by the petitioner, against the re-opening of the assessment, in respect of the assessment year 2004-2005, under Section 147 of the Act. 3. It has been stated that the petitioner is a domestic private limited company, engaged in the business of engineering works, building and developing of residential p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner liable to tax, had escaped assessment, within the meaning of Section 147 of the Act. 6. It has been further stated that the respondent, by a letter, dated 21.4.2011, had furnished the reasons for the re-opening of the assessment, in respect of the assessment year 2004-2005. From the reasons given by the respondent it is clear that there is no fresh tangible material that had come into the possession of the respondent, warranting the re-opening of the concluded assessment. Thereafter, the petitioner company had submitted a detailed reply, dated 23.5.2011, requesting the respondent to drop the proceedings, as there was no reason to believe that the income liable to tax had escaped assessment. 7. The petitioner company had requested the respondent to decide the preliminary issue relating to the aspect of jurisdiction of the respondent to re-open the concluded assessment, under Section 148 of the Act. However, the respondent, without dealing with the issue relating to the jurisdiction, had passed the impugned order, dated 28.9.2011, holding that the proceedings, under Section 147 of the Act, had been initiated correctly and properly, and had issued a notice, under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Finance Act, 2009, with retrospective effect, from 1.4.2001, the assessee is not eligible to claim deduction under Section 80IB(10) of the Act. 12. It had also been submitted that in the absence of any failure on the part of the petitioner to disclose, fully and truly, all material facts necessary for the assessment, the notice issued under Section 148 of the Act, after the expiry of a period of four years from the end of the relevant assessment year, cannot be held to be valid in the eye of law. 13. The learned counsel had further submitted that the respondent would have jurisdiction to re-open the concluded assessment, only on obtaining tangible materials. If all the facts had been stated in the original assessment proceedings, a concluded assessment cannot be re-opened, without fresh facts having been brought to the knowledge of the assessing authority. 14. Further, the power to re-open an assessment is conditional on the formation of a reason to believe that income chargeable to tax had escaped assessment. In the present case, the petitioner had submitted all the relevant materials to the respondent, at the time of scrutiny of assessment, under Section 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of this Court, in Fenner (India) Ltd. Vs. Deputy Commissioner of Income Tax (2000) 241 ITR (Mad.) 672, wherein it had been held that, in the case of a notice being issued for reassessment, after the expiry of four years, the mere escapement of income is not sufficient to justify the initiation of action. The escapement must be by reason of the failure on the part of the assessee, either to file a return, or to disclose fully and truly, the material facts necessary for the assessment. 17. He had also relied on the decision of a Division Bench of this Court, in Commissioner of Income Tax Vs. Elgi Finance Ltd. (2006) 286 ITR (Mad.) 674). The Division Bench of this Court had held that, in addition to the time limits provided for, under Section 149 of the Act, the law has provided another limitation of four years, under the proviso to Section 147 of the Act. As far as proviso to Section 147 of the Act is concerned, the law prescribes a period of four years to initiate reassessment proceedings, unless the income alleged to have escaped assessment was made out as a result of the failure on the part of the assessee to disclose, fully and truly, all material facts necessary for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tractor and not as a builder. In the light of the explanation to Section 80IB(10) of the Act introduced to sub-section 10 of Section 80IB by the Finance Act, 2009, with retrospective effect from 1.4.2001 which reads as follows:"For the removal of doubts it is hereby declared that nothing contained in this sub section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government)". Therefore, it is clear that the basis for re-opening of assessment under Section 147 is as per the provisions of the Act." 22. As such, it is clear that the basis for the re-opening of the assessment, under Section 147 of the Act, is as per the provisions of the said Act. The petitioner had filed its objections, on 28.9.2011. The objections filed by the petitioner had been rejected by way of a speaking order, dated 28.9.2011. The petitioner had challenged the said order. As the procedures laid down by the Supreme Court, in GKN Driveshafts (India) Ltd. Vs. Income-Tax Officer (2003) 259 ITR 19 had been meticulously followed, it would not be proper for the petitioner to state that the said decision had been violated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntractor and not as a developer. The rejection of the deduction, under Section 80IB(10) of the Act, to a contractor, is not, primarily, on account of the introduction of the explanation to Section 80IB(10) of the Act, by the Finance Act, 2009, which came into force with retrospective effect from 1.4.2001. In fact, even before its introduction, the Mumbai Bench of the Tribunal had held, in Patel Engineering Vs. DCIT (2005) 94 ITD 411 (Mum), that incentive deduction is available only to a developer of a project, and not to the contractor. The explanation to Section 80IB(10) of the Act was therefore, clarificatory in nature. Therefore, the petitioner cannot be excluded from the reassessment proceedings, by stating that the reason for re-opening of the assessment is consequent to the introduction of the explanation in the statute. 26. The reliance, by the petitioner, on an order of the Tribunal, in ITA 1058 of 2009, dated 13.8.2009, to state that the reassessment proceedings is not valid, cannot be accepted. The Tribunal had no occasion to consider the issue of eligibility of the deduction, under Section 80IB of the Act, from the point of view of the retrospective amendment made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n W.P.Nos.28457 of 2008 and 19260 of 2009, by following the decision of the Supreme Court, that the proceedings initiated for the reassessment cannot be quashed at the threshold. It would be open to the petitioner to produce the necessary records to satisfy the authority that there is no necessity for reassessment and there is no suppression or non-disclosure of full accounts by the assessee, while submitting the returns relating to the original assessment. If a final order is passed by the assessing authority based on the relevant records furnished by the assessee it would be open to such assessee to file an appeal before the appellate authority and thereafter, before the Income Tax Appellate Tribunal, before approaching this Court. When such efficacious alternative remedies are available it would not be open to the petitioner to approach this Court, by way of a Writ petition filed, under Article 226 of the Constitution of India, as held by the Supreme Court, in Raj Kumar Shivhare Vs. Directorate of Enforcement (2010) 4 SCC 772. As such, the writ petition is devoid of merits and therefore, it is liable to be dismissed. 31. The learned counsel appearing on behalf of the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l facts, relevant for the passing of the original assessment order. As such, it would not be open to the respondent to re-open the assessment, in respect of the assessment year, 2004-2005. 34. It is not in dispute that the petitioner had placed all the relevant records, including the construction agreement, before the passing of the original assessment order. Further, it is not the case of the respondent that the petitioner had suppressed certain material facts, due to which the original assessment order, passed by the respondent, is liable to be re-assessed. In such circumstances, in the absence of the failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment year under consideration, the assumption of jurisdiction, by the respondent, under Section 147 of the Income Tax Act, 1961, after the expiry of four years, from the end of the relevant assessment year, is illegal and invalid. Accordingly, the proceedings, under Section 147 of the Act, which had been initiated by the issuance of the impugned notice, under Section 148 of the Act, cannot be sustained. As such, this Court finds it appropriate to allow the writ petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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