TMI Blog2020 (6) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ash was handed over by him to the petitioner Dr.S.Gurushankar after deducting commission of one percentage. Naturally, when commercial trade is indulged in the guise of serving the poor and needy and seeking tax holiday, this court can never come to the rescue of the petitioner. The account books of Meenakshi Hospital, Thanjavur were also verified and it was seen that the demand draft was never reflected in the accounts and only cash payment has been made. Petitioner cannot complain about violation of any principle relating to natural justice. An assessment order has been passed. An appellate remedy is available. The petitioner has consciously decided to forego that remedy. If the assessment order is examined further, it also reveals that during the demonetisation period, the petitioner had deposited a total sum of ₹ 7,54,77,619/- in cash, and when the assessee was asked to explain the source, he stated that he was running Meenakshi Mission Hospital at Thanjavur, for which, the tax holiday is now being sought. The hospital has been the source for a huge cash holding of ₹ 7,54,77,619/-. It is a wonder that the petitioner actually seeks tax holiday. This Writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 143 (2) was issued on 29.07.2016 and notices under Section 142 (1) were issued on 23.08.2016 and 29.09.2016. 4. The 3rd respondent passed an assessment order for the assessment year 2013-2014 under Section 143 (3) r/w Section 153A of the Income Tax Act, 1961, disallowing exemption under Section 80-1B (11C) for the assessment year 2013-2014 to 75% and fixing the taxable income at ₹ 4,33,09,254/-. For the assessment year 2014-2015, the 3rd respondent disallowed exemption under Section 80-1B(11C) to 50% and fixed the taxable income at ₹ 7,94,04,287/-. For the assessment year 2015-2016, the 3rd respondent disallowed exemption under Section 80-1B(11C) to 25% and fixed the taxable income at ₹ 17,42,32,078/-. 5. The petitioner claimed that he filed three appeals under Section 246-A of the Income Tax Act, 1961, against the assessment orders for the assessment years 2013-2014, 2014-2015 and 2015-2016. The Appellate Authority, 1st respondent, passed final orders on 14.09.2018 and directed the Assessing Officer to allow 100% deduction under Section 80-1B(11C), as claimed by the petitioner in his return of income filed for the assessment years 2013-2014, 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanjavur Taluk, which is claimed to be a backward place. The matter was, thereafter, remanded back to the Assessing Officer for the said three assessment years. The Assessing Officer, while reworking the commutation, had invoked the provisions of Section 115JC of the Income Tax Act. Invoking Section 115JC of the Act had once again been a cause of grievance for the petitioner and after the assessment orders were passed, the same were challenged before this Court in W.P(MD).Nos.107, 108 and 109 of 2019 (S.Gurushankar Vs., The Commissioner of Income Tax (Appeals-19, Chennai and two others). It must be mentioned that only an interim order of stay has been granted in the said writ petitions and the writ petitions are still pending. 13. The learned Senior Counsel for the petitioner placed reliance on the interim order dated 04.01.2019 granted in the said writ petitions. In this connection, reference had been made to ( 2011) 5 SCC 305, State of Uttar pradesh and others Vs. Hirendrapal Singh and others, wherein, the Honourable Supreme Court had referred to two earlier judgments in paragraphs 16 and 17 viz., AIR1987 SC 1345, Bir Bajrang Kumar Vs., State of Bihar and 1995 supp (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition are totally different from the facts canvassed while challenging the assessment orders for the assessment years 2013-2014, 2014-2015 and 2015-2016. The assessment orders in those years travelled a different path. After the assessment orders were passed, they were taken up in appeal before the Appellate Authority. Even while passing the assessment order, instead of granting 100% deduction, the Assessing Officer had granted different rates of deduction, namely, 75% for the assessment year 2013-2014, 50% for the assessment year 2014-2015 and 25 % for the assessment year 2015-2016. The Appellate Authority held that such restriction of the percentage for deduction was unreasonable and was not called for and that 100% deduction should have been given and on that single ground, had remanded the matter back to the Assessing Officer. 17. The Assessing Officer had then taken up an entirely different stand. He invoked the provision under Section 115 JC of Income Tax Act. Therefore, the assessment orders were then challenged before this Court by stating that when Section 115 JC was not at all invoked in the first instance in the orders in the original, the order of the Assessment Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by the Assessing Authority. It has been stated by the learned Senior Counsel that the rejection order was passed before the writ petition was filed. However, for reasons best known to the writ petitioner and to the learned counsel for the writ petitioner, the said fact has been suppressed before this Court. 22. The learned Senior Counsel also stated that invoking Section 115 JC of the Act without giving proper notice to the petitioner herein is a clear violation of principal of natural justice. In this connection, reliance has been placed on AIR 1977 SC 1627, State of Kerala vs K.T.Shaduli. The learned Senior Counsel placed specific reference to paragraph 2, where it had been stated that the law is well settled that the tax authorities are entrusted with the power to make assessment of tax and to discharge quasi-judicial functions and they are bound to observe principles of natural justice in reaching their conclusions. The learned Senior Counsel therefore stated that when the Assessing Officer had invoked the provision under Section 115 JC of the Act, he should have put the petitioner on prior notice that he is going to invoke Section 115 JC of the Income Tax Act, par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was maintained by one S.Sivasamy of Karur. Further attempts were made to identify the existence of M/s.Sowdambika Traders and the name of another individual came up, called C.P.Anbunathan. He was examined and he stated that he did not know anything about the transaction and he did not know how the said amount was reflected in the bank account in his name as Proprietor of M/s.Sowdambika Traders. He disowned all knowledge about the transaction. 25. It has to be pointed out that any tax holiday can be granted to a person who declares a truthful return. It cannot and should not be granted to the person who claims that he purchased medical equipments in the guise of treating poor persons for a sum of ₹ 2,32,79,760/- and it is subsequently found that the entire transaction is bogus. 26. I find every justification in the order of the Assessment Officer invoking Section 115JC which provision is squarely applicable. 27. It is also seen that C.P.Anbunathan had further stated in his statement that the demand draft drawn in the name of M/s.Sowdambika Traders was received by Meenakshi Mission Hospital and Research Center, Madurai and in turn cash was handed over by him to the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed on the ground of violation of principles of natural justice. But even in that case certain exceptions were laid down to which we shall presently refer. 23.Chinnappa Reddy, J. in S.L.Kapoor's case [(1980) 4 SCC 379], laid two exceptions (at p.395) namely, if upon admitted or indisputable facts only one conclusion was possible , then in such a case, the principle that breach of natural justice was in itself prejudice, would not apply. In other words if no other conclusion was possible on admitted or indisputable facts, it is not necessary to quash the order which was passed in violation of natural justice. Of course, this being an exception, great care must be taken in applying this exception. 24.The principle that in addition to breach of natural justice, prejudice must also be proved has been developed in several cases. In K.L. Tripathi Vs. State Bank of India (1984(1) SCC 43), Sabyasachi Mukherji, J. ( as he then was) also laid down the principle that not mere violation of natural justice but de facto prejudice (other than non-issue of notice) had to be proved. It was observed: quoting Wade Administrative Law, (5 th Ed.PP.472-475) as follows: ( para 31) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m were impleaded as parties. They were heard. Not only the said Unions were heard before the High Court, as noticed hereinbefore from a part of the judgment of the High Court, they had preferred appeals before this Court, Their contentions had been noticed by this Court. As the award was made in presence of the Unions, in our opinion, the contention of Respondents that the award was not binding on them cannot be accepted. The principles of natural justice were also not required to be complied with as the same would have been an empty formality. The court will not insist on compliance of the principles of natural justice in view of the binding nature of the award. Their application would be limited to a situation where the factual position or legal implication arising thereunder is disputed and not where it is not in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the principles of natural justice. 32. A Division Bench of this Court in a Judgement reported in 2006 4 LLN 358 [Dr.C.Chendroyaperumal Vs. National Institute of Port Management] had also expressed their views on this aspect. 9. Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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