Madras High Court
M/S.Vestas Wind Technology India ... vs Assistant Commissioner Of Income ... on 30 June, 2021
W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :30.06.2021
CORAM
THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.No.37562 of 2016
and
W.M.P.No.32188 of 2016
M/s.Vestas Wind Technology India Private Limited,
Represented by its Director – Finance,
Mr.Govindaraj Kolappan
298, Rajiv Gandhi Salai,
Sholinganallur,
Chennai – 600 119. ...Petitioner
Vs.
1.Assistant Commissioner of Income Tax,
Company Circle 3(2)
4th Floor, Wanaparthy Block,
121, Mahatma Gandhi Road,
Chennai – 600 034.
2.Principal Commissioner of Income Tax-3,
4th Floor, Main Building,
121, Mahatma Gandhi Road,
Chennai – 600 034. ... Respondents
PRAYER : Writ Petition filed Under Article 226 of the Constitution of
India to issue of Writ of Certiorari, calling for the records on the file of the
first respondent and quash the impugned order in AAACA9274F/9808-
1
https://www.mhc.tn.gov.in/judis/
W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
V/09-10 dated 09.09.2016 along with impugned notice issued by the
respondent under Section 148 of the Act in Pan No.AAACA9274F dated
25.01.2016.
For Petitioner : Mr.N.V.Balaji
For Respondents : Mrs.Hema Muralikrishna
Standing Standing Counsel
for Income Tax
ORDER
The notice issued under Section 148 of the Income Tax Act
dated 25.01.2016 and the order dated 09.09.2016, disposing of the
objections filed by the writ petitioner are under challenge in the present writ
petition.
2. The petitioner is a Private Limited Company, incorporated
under the Companies Act, 1956 and is a wholly owned subsidiary of Vestas
Wind Systems A/S, a company incorporated in Denmark. The petitioner is
engaged in the business of manufacture, installation, marketing, service and
maintenance of Wind Turbine Generators.
3. The petitioner filed its return of income electronically on
29.09.2009, for the Assessment Year 2009 - 10, declaring a total income
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W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
amounting to INR 200,16,85,020. Subsequently, the petitioner filed a
revised computation of total income and taxes admitting income of INR
218,59,63,810 on 13.07.2012, after deposition of additional tax liability of
INR 8,04,91,137. The assessment proceedings were initiated by the first
respondent. Notice was issued under Section 143 (2) of the Act on
18.08.2010 followed by notice under Section 142 (1) of the Act calling for
information on 06.12.2012. The petitioner made a submission that all the
details, books of accounts, information were provided. The Assessing
Officer completed the scrutiny and passed the final order of assessment on
04.02.2014 under Section 143 (3) of the Act.
4. While so, surprisingly the respondents issued notice under
Section 148 of the Income Tax Act on 25.01.2016. The petitioner vide letter
dated 25.02.2016 sought for the reasons for reopening of assessment. The
Assessing Officer furnished the reasons for reopening of assessment in
proceedings dated 29.04.2016. Thereafter on 15.06.2016, the petitioner
submitted its objections in detail and the said objections were disposed of
by the Assessing Officer, vide letter dated 09.09.2016.
https://www.mhc.tn.gov.in/judis/
W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
5. The learned counsel for the petitioner mainly contended that
it is a classic case of change of opinion where the materials made available
during the original assessment was taken as a cause for reopening of
assessment under Section 147 of the Act. Thus the very initiation itself is
not in consonance as contemplated under Section 147 of the Act. The
learned counsel for the petitioner referred the objections filed by the
petitioner on 15.06.2016, wherein all the judgments are given. The
petitioner has elaborately stated the materials produced at the time of
original assessment and informed the respondents that there is no new
tangible material warranting reopening of proceedings under Section 147 of
the Act and therefore, all further actions to be established.
6. The grievance of the writ petitioner is that the respondent
has not disposed of the specific objections raised with reference to the
informations and materials adjudicated during the original assessment. In
this regard, the petitioner referred the bullet points clearly in its objections
dated 15.06.2016 referring the said factual aspects. The learned counsel for
the petitioner reiterated that the disposal of objection / objections is non-
https://www.mhc.tn.gov.in/judis/
W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
application of mind and accordingly, the impugned order is liable to be set
aside.
7. The learned Senior Standing Counsel appearing on behalf of
the respondents disputed the said contentions raised on behalf of the
petitioner and is of an opinion that the petitioner has not disclosed fully and
truly all material facts necessary to its assessment and based on which the
assessing officer has reason to believe that the income chargeable to tax has
escaped assessment. The suspension, non-disclosure of informations and
other details are to be considered by the Assessing Officer while proceeding
for reassessment. However, the objections made by the petitioner was
considered in entirety and an order is passed by stating that mere production
of account books or other evidence from which material evidence could
with due diligence have been discovered by the AO does not necessarily
amount to a disclosure within the meaning of the first proviso to Section
147. There will be some other informations or reasons for the Assessing
Officer for reopening of assessment. All those informations, facts and
circumstances are to be considered while proceeding for reassessment.
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W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
Thus, this Court cannot go into such intricacies, details, informations,
documents etc., which has to be done by the Assessing Officer at the time of
reassessment.
8. Section 147 of the Act contemplates that the Assessing
Officer has reason to believe that income chargeable to tax has escaped
assessment. Explanation 1 enumerates that mere production of account
books or other evidence from which material evidence could with due
diligence have been discovered by the AO does not necessarily amount to a
disclosure within the meaning of the first proviso to Section 147. Therefore,
the objections, if at all, submitted with reference to the materials and
informations, have to be adjudicated during the original assessment. The
objections are submitted mainly on the ground that the return of income was
filed truly with full disclosure and the Assessing Officer scrutinized and
passed the assessment order based on materials. However, with reference to
the same transaction reopening proceedings are initiated under Section 147
of the Act.
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W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
9. This Court is of the considered opinion that explanation -1
reveals that mere production of account books or other evidence in the
original assessment order is one aspect of the material and even in such
circumstances, the Assessing Officer is empowered to initiate reopening
proceedings, if he has reason to believe that any income chargeable to tax
has escaped assessment. Further explanation 2(c) provides various
circumstances under which reassessment proceedings can be initiated where
assessment has been made already but income chargeable under tax, then
also it is permissible for reopening of assessment and in such circumstances
materials and informations may be one and the same. The interpretation of
assessment and the determination of tax may differ. This possible
circumstances cannot be countenanced and may be solved only after
complete adjudication. The materials submitted by the Assessee during the
original assessment became irrelevant and other circumstances
contemplated under Explanation 2 (c) would also enable the Assessing
Officer to reopen the assessment.
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W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
10. This being the wider scope provided under Section 147 of
the Act, the objections raised by the petitioner that all the materials,
informations provided and the disposal of the objections, are not proper
while the Assessing Officer disposing of the objections has formed an
opinion that he has reason to believe for reopening of assessment and the
reasons are sufficient enough to proceed for assessment / reassessment, then
the High Court would not interfere by venturing into the adjudication of
complete facts and circumstances, which is impermissible in a writ
proceedings.
11. Thus, this Court do not find any perversity or infirmity as
such in respect of the initiation of proceedings under Section 147 of the Act
and consequently, the writ petition stands dismissed. No costs.
Consequently, connected miscellaneous petition is closed.
30.06.2021
Speaking order
Index : Yes
Internet: Yes
Pns
https://www.mhc.tn.gov.in/judis/
W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
To
1.Assistant Commissioner of Income Tax,
Company Circle 3(2)
4th Floor, Wanaparthy Block,
121, Mahatma Gandhi Road,
Chennai – 600 034.
2.Principal Commissioner of Income Tax-3,
4th Floor, Main Building,
121, Mahatma Gandhi Road,
Chennai – 600 034.
https://www.mhc.tn.gov.in/judis/
W.P.No.37562 of 2016
and W.M.P.No.32188 of 2016
S.M.SUBRAMANIAM,J.
Pns
W.P.No.37562 of 2016
and
W.M.P.No.32188 of 2016
30.06.2021
https://www.mhc.tn.gov.in/judis/
