9911796707
TMI Blog2021 (4) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... ing off the objections to the reasons dated 19.09.2016 passed by the second respondent and to quash the same. 3. The petitioner is M/s. Citadel Fine Pharmaceuticals Limited. 4. At the first instance, the learned counsel appearing for the respondent raised the maintainability question on the ground that during the pendency of the writ petition, the assessment order has been passed with reference to initiation of proceedings under Section 147 of the Income Tax Act, 1961. In view of the fact that the order of assessment has already been passed, the assessee must have to approach the Appellate Authority for re-dressal of his grievances. Therefore, the writ petition is liable to be dismissed. 5. In this regard, the learned counsel appearing for the petitioner cited the judgment of the Hon'ble Division Bench of this Court in the case of P.V.P. Ventures Limited vs. Assistant Commissioner of Income Tax, Corporate Circle 5(2), Chennai reported in [2016] 65 taxmann.com 221 (Madras), wherein the similar ground was taken by the Department by stating that the assessment order was passed during the pendency of the writ petition filed by the assessee challenging the notice issued under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 4,07,03,328/- as at 31.03.2005. The provision was added back in the memo of computation of total income. Though the assessee realized that such amounts are irrecoverable, it continued to have business with the said person and claims to have undertaken job work for M/s. PHCPL even during Financial Year 2005-06. The ledger folios of M/s. PHCPL as appearing in the books of the Company from 01.04.2004 to 31.03.2009 were examined. Till 31.03.2005, there had been some receipts in respect of services rendered and even TDS had been deducted on such service while making the payment. However, from 01.04.2005, the transactions are one sided and though the assessee was fully aware that the amounts could not be retrieved, it claims to have provided services to PHCPL. Notice u/s. 133(6) was issued to the Principal Officer of PHCPL, on 04.10.2011 and since there was no response, a reminder was issued again on 20.10.2011, which met with same fate. It is clear from the ledger folio of PHCPL as appearing in the books of the assessee for the period from 01.04.2005 to 31.03.2006 that the transactions are in a sense, an unilateral booking which the recipient has not acknowledged. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s accounts audited as stipulated u/s. 44AB". It is further observed that "the claim of bad debts is restricted to the period ending 31.03.2005 which amounts to Rs. 4,07,03,328/- and such values of bad debts beyond the period from 01.04.2005 and beyond this value of Rs. 4,07,03,328/- is not entertained". 9. Relying on the said findings made by the Assessing Officer, the petitioner has reiterated that the very same reason has been considered for reopening of the assessment in the year 2009-10. Paragraph No. 2 of the order providing reasons for reopening is nothing but the extraction of the paragraph made available in the original assessment order and further reason given was also discussed and a finding was arrived by the Assessment Officer, while making original assessment. Thus, there is no reason to sustain the reasons as furnished for reopening of the assessment for the year 2009-10. 10. The learned counsel appearing for the respondent/Department objected the said contention by stating that undoubtedly, the similarity of the subject matter dealt with in the original assessment order as well as the orders subsequently furnished reasons for reopening of the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible for set off against Capital Gains. As per Section 71, Current year Loss under any head can be set off against under any head with exceptions. In this case, the loss has not arisen on account of business activities during the current year 01.04.2008 to 31.03.2009. Bad debts relate to business done before 01.04.2005. The indent of legislature is to provide judicial relief to assessee when it had incurred bad debts during the course of business activities and the same may be deducted from income from business. Moreover, for deduction from LTCG/STCG, there should be attendant expenses relating to the subject Capital asset, this is not in the assessees case. Moreover, the assessee has waited for 4 years and conveniently claimed bad debts to be deducted from Capital Gains. It is a fact that if there had been no STCG/LTCG, the bad debts might not have been claimed for the AY 2009-10. 12. Thus, it seems that the Authorities could able to draw an inference with reference to the disclosure made by the assessee during the original assessment. Undoubtedly, the facts appears to be similar but certain intricacies regarding transactions were identified by the Income Tax Department as nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to certain disputed facts. When there are disputes regarding the disclosure, the best Authority would be the Income Tax Department and certainly, not the High Court under Article 226 of the Constitution of India. 15. The power of High Court under Article 226 is to scrutinize the process through which a decision is taken in consonance with the provisions of the Act and certainly, not the decision itself. This being the principles to be borne in mind, while considering the writ proceedings under Article 226 of the Constitution of India, a doubt raised by the Department regarding full and true disclosure of the facts by the assessee and if there are some materials to establish the same, the Authorities have to initiate action based on the concept of reason to believe and the assessee must co-operate for the assessment by defending his case and by availing the opportunities contemplated under the provisions of the Act. 16. Contrarily, if the High Court takes an exception with reference to certain facts and circumstances, then there is a possibility of escape from the clutches of Tax proceedings, which is certainly not preferable. Further, the Income Tax Authorities are expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
