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TMI Blog2019 (12) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... r did not get its account audited and had sought approval from the Registrar of Companies for extending the time limit to hold its Annual General Meeting. The petitioner was required to file an electronic return of income and such electronic return would get uploaded only when all the mandatory fields are filled, one such being the details of audit under section 44AB of the said Act. Since the petitioner was liable for audit under Section 44AB of the said Act, the online return could not be uploaded without filling details of the audit return. Therefore, the petitioner mentioned the date of audit report as 29.09.2010, an adhoc date to enable the online filing of the return. The accounts of the petitioner were eventually audited under the Companies Act, 1956 and subsequently under Section 44AB of the said Act on 12.01.2011. Based on the tax audit report dated 12.01.2011, the petitioner filed a revised return on 05.02.2011 declaring loss of Rs. 10,93,69,356/-. The first respondent passed an order under Section 143(3) of the said Act dated 13.03.2014, accepting the loss declared in the revised return. During the course of assessment proceedings, the petitioner provided all the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer, is illegal and bad in law. 3. A counter affidavit is filed by the respondents, wherein it is stated as follows: This writ petition is not maintainable, since the statutory appellate remedy is available to the petitioner against the impugned order. The impugned order was passed after giving due and sufficient opportunity to the petitioner. Principles of natural justice and the statutory provisions were duly complied with. The question whether the addition made by the respondent is justifiable or not, is an issue to be agitated on merits after letting in evidence and does not hit jurisdiction of the respondents to maintain the writ petition as against the assessment order. The original return of income was filed by the petitioner herein on 08.10.2010 declaring a loss of Rs. 17,30,25,913/-. In the affidavit itself, it is stated that the date of Audit Report under Section 44AB was mentioned as 29.09.2010 and that such date was not the correct date but an adhoc date mentioned by the petitioner at its whims and fancies. It is necessary to note that Section 44AB audit report has to be mandatorily completed and prepared before the due date for filing of return under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the averments of the petitioner, it is very clear that the petitioner had wantonly mentioned a wrong date of audit report in its return of income. The averment that there was a typographical error in the return of income cannot be accepted as the concerned audit report had been prepared after delay of 4 months and even in the revised return, the date of audit report is wrongly mentioned as 29.09.2010 so that the CPC as well as the assessing Officer are led to believe that the audit report had been completed and prepared within the stipulated time. The averment that "reopening based on same material made available at the time of scrutiny assessment is not valid" is refuted herein and it is submitted that there had been excessive allowance of loss which should not be carried forward and the subject excessive allowance is covered by the proviso to Sec.147. The averment that information received from the audit part cannot be the basis for reassessment proceedings is denied by the fact that there had been no mandatory compliance of filing the audit report under Section 44AB within the due date. 4. A rejoinder affidavit is filed by the petitioner reiterating the contentions already ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o disclose truly and fully the material details. The petitioner filed their objections against the reasons for reopening, however, the same was not considered properly. Unless Section 139(9) is put into operation, no return can be declared invalid and on the other hand, it could be only a defective return. The Assessing Officer found the return filed by the petitioner as invalid only because wrong date of Audit Report was given. There is no live link between the reasons for reopening and the material relied for such reasons. Even though an alternative remedy of appeal is available against the impugned assessment order, still the writ petition is maintainable, since the petitioner is questioning the very reopening also. If the Assessing Officer assumes jurisdiction under Section 147 without satisfying the mandatory requirement, the Writ Court can go into it, instead of driving the petitioner to seek alternative remedy. In this connection, the decisions of the Hon'ble Supreme Court reported in (1961) 41 ITR 191 (SC), Calcutta Discount Co. Ltd., vs. Income Tax Officer and 2017 (77) taxmann.com 176 (SC), Jeans Knit (P) Ltd., vs Deputy Commissioner of Income Tax, are relied on. ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petition. ii) On merits, it is to be noted that the petitioner is blowing hot and cold. The petitioner gave a false statement, as if the audit report has been obtained. Therefore, it is evident that there is no true and full disclosure of material details at the time of original assessment. Consequently, the reopening is justified. Whether it is a bonafide mistake or not, is a factual aspect, which has to be pleaded and proved before the next fact finding Authority, viz., the Appellate Authority. If the assessee failed to bring to the notice of the Assessing Officer the relevant fact, the assessment can be reopened. In this connection, the decision of this Court reported in 2018(99) Taxmann.com 340 (Mad), A.Sridevi vs. ITO, confirmed in 2018 (100) taxmann.com 434 (Madras) (DB), A.Sridevi vs. ITO, is relied on. iii) The other case laws are relied on by the learned counsel for the petitioner in support of his contention on merits are also factually distinguishable and thus, they are not applicable to the present case. Moreover, the facts and circumstances of each case relied on by the learned counsel would show that they are either filed against the very 148 notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrent year losses as below are carry forward to subsequent year, in the income statement: Unabsorbed depreciation loss Rs. 88,35,494 Business Loss Rs. 10,05,33,863 Rs. 10,93,69,356 It is seen from the annual accounts and Form 3CD, it is found that the Annual accounts and audit certificate u/s 44AB were prepared and certified on 12 January 2011. However, in the revised return filed by the assessee on 05/02/2011, it was stated that the audit certificate u/s 44AB was signed on 29/09/2010. From the above it is evident that the information given by the assessee is false with regard to audit certificate u/s 44AB. Further, the annual accounts are certified only on 12/01/2011. Hence, the return filed by the assessee on 08/10/2010 stating that loss of Rs. 10,93,69,356/- is invalid one. Therefore, the carry forward of business loss is required to be disallowed. Further, failure to furnish report within due date relating report u/s 44AB and 92E attract penalty u/s 271B and 271BA. Both the reports were audited and certified by the Chartered Accountants only after the due date specified u/s 139(1) of IT Act. Hence penalty u/s 271B and 271BA are to be levied. From the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has furnished a false information regarding the date of audit report and therefore, the assessee cannot claim that they have truly and fully disclosed all the material facts necessary for the assessment. The Assessing Officer also pointed out that the assessee has failed to furnish the audit report within the due date relating to report under Section 44AB and 92E, which also attracted penalty under Section 271B and 271 BA of the said Act. The Assessing Officer further pointed out that the reasons given for effecting reassessment were not the matters considered by the Assessing Officer, while passing the assessment order and therefore, when no opinion was formed in this regard earlier, the question of change of opinion does not arise. 11. The above said order dated 29.09.2017, rejecting the objections against reopening was not put to challenge and on the other hand, the assessee, in response to the said order, participated in the assessment proceedings and allowed the Assessing Officer to complete the assessment and pass the impugned order dated 12.12.2017. 12. Under the above stated facts and circumstances, this Court has to consider and decide as to whether the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge the notice under Section 148 and the consequential assessment order by filing the present writ petition. I have already pointed out that the impugned assessment order is the consequence of reopening the assessment under Section 147. Therefore, the question whether the reopening is valid or not, is to be considered and decided based on the reasons for reopening, objections filed by the assessee against such reasons and order passed thereon rejecting such objections. As already pointed out that the assessee has not chosen to challenge the rejection order, on the other hand, they participated in the assessment proceedings. 16. Therefore, in my considered view, the reasons for reopening and the consequential order rejecting the objections against those reasons now got merged with the subsequent order of assessment and therefore, it would not be proper for this Court to go into the question of reopening alone and decide about its validity by exercising the jurisdiction of this Court under Article 226 of the Constitution of India. By going into such question, if it is found that the reopening is valid, this Court has to necessarily go into the merits of the assessment as well and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." 18. As rightly pointed out by the learned Counsel for the Revenue that none of the exceptions referred to in the above decision is attracted in this case to exercise the discretionary jurisdiction of this Court under Article 226 of the Constitution of India to examine the correctness or otherwise of the impugned order of assessment. The learned counsel for the petitioner relied on (1961) 41 ITR 191 (SC), Calcutta Discount Co. Ltd. vs. Income Tax Officer and (2017) 77 taxmann.com 176 (SC), Jeans Knit (P) Ltd. vs. Deputy Commissioner of Income Tax, in support of his submission on the maintainability of the writ petition. As rightly pointed out by the learned counsel for the Revenue, the facts and circumstances of both the cases would show that challenge made in those cases before the Court was against notice issued for reopening the assessment, even before an order of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not completed and a report was not available before the assessee. However they have chosen to indicate the date of audit report as 29.09.2010, while filing the original return on 08.10.2010. Therefore, it is evident that the date of audit report furnished in the original return is not a true information or disclosure of material facts and therefore, the reasons for reopening the assessment indicating that there is a failure on the part of the assessee to disclose truly and fully material facts, cannot be stated as a reason without any basis. At the same time, the question as to whether such mistake in furnishing the date of audit report will go to the root of the matter and affect the assessment proceedings is a different issue, which has to be considered and decided only by the next fact finding Authority. No doubt, the learned counsel for the petitioner contended that the wrong committed by the assessee must have live link to say that income has escaped assessment. I have already pointed out that the above issue is not a simple issue on law and on the other hand, it is on facts. Therefore, whether the wrong committed by the assessee in referring to the date of audit report will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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