R.K.Palaniswamy vs The Principal Commissioner Of
2021 Latest Caselaw 18064 Mad

                                                                           WA.No.2152 of 2021



                                     In the High Court of Judicature at Madras

                                                Dated : 03.9.2021

                                                      Coram

                                    The Honourable Mr.Justice T.S.SIVAGNANAM

                                                       and

                            The Honourable Mr.Justice SATHI KUMAR SUKUMARA KURUP

                               Writ Appeal No.2152 of 2021 & CMP.No.13573 of 2021



                      R.K.Palaniswamy                                        ...Appellant
                                                        Vs
                      1.The Principal Commissioner of
                        Income Tax, Income Tax Department,
                        No.67A, Race Course Road,
                        Coimbatore-18.

                      2.The Joint Commissioner of
                        Income Tax, Non-Corporate
                        Range-3, Income Tax Department,
                        No.67A, Race Course Road,
                        Coimbatore-18.

                      3.The Income Tax Officer,
                        Non Corporate Ward 3(1),
                        Income Tax Department,
                        No.67A, Race Course Road,
                        Coimbatore-18.                                       ...Respondents

APPEAL under Clause 15 of the Letters Patent against the order

dated 30.6.2021 made in W.P.No.32366 of 2017.

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                                                                           WA.No.2152 of 2021



                                For Appellant:                       Mr.A.S.Sriraman
                                For Respondents:           Mr.A.P.Srinivas, SSC

Judgment was delivered by T.S.SIVAGNANAM,J

We have heard Mr.A.S.Sriraman, learned counsel appearing for

the appellant and Mr.A.P.Srinivas, learned Senior Standing Counsel

accepting notice for the respondents.

2. This appeal filed by the appellant – assessee is directed

against the order dated 30.6.2021 in W.P.No.32366 of 2017.

3. The said writ petition was filed by the appellant to quash the

notice issued by the third respondent under Section 148 of the

Income Tax Act, 1961 (for brevity, the Act) for reopening the

assessment pertaining to the year 2011-12 and consequently to drop

the proceedings.

4. We may not be required to elaborately go into the factual

matrix, as we are convinced that the grounds canvassed by the

appellant – assessee challenging the reopening of assessment, which

were controverted by the respondents in their counter affidavit, have

not been dealt with and decided by the learned Single Judge. The

discussion by the learned Single Judge is in paragraph 6 of the

impugned order dated 30.6.2021. On a reading of the same, we find

that the learned Single Judge noted as to what were the powers of the

http://www.judis.nic.in WA.No.2152 of 2021

Assessing Officer under Section 147 of the Act.

5. There can be no dispute as to the powers conferred on the

Assessing Officer under Section 147 of the Act. However, the question,

which is required to be decided in the said writ petition, is as to

whether the assumption of jurisdiction by the Assessing Officer

invoking Section 147 of the Act is in accordance with law.

6. The case of the assessee was that the assumption of

jurisdiction was bad in law, as the reopening was a clear case of

change of opinion.

7. We find from the impugned order before us that this aspect

has not been dealt with and no finding has been recorded by the

learned Single Judge. Admittedly, as against the order dated

09.1.2017 disposing of the appellant's objections as being not

tenable, the appellant – assessee has no other remedy under the

provisions of the Act and therefore, writ petitions have been held to

be maintainable questioning the orders of the Assessing Officers

disposing of the objections filed to the reopening of assessment.

Hence, the learned Single Judge is required to decide as to whether

the reopening was valid, for which, it would be necessary that the

factual matrix has to be gone into, as it is the specific case of the

appellant – assessee that all material facts were submitted to the

http://www.judis.nic.in WA.No.2152 of 2021

Assessing Officer when the original assessment was completed under

Section 143(3) of the Act and the assessment having been reopened

beyond a period of four years, the Assessing Officer should have a

fresh tangible material in his possession to reopen the assessment.

8. The case of the appellant – assessee, as mentioned in the

objections dated 02.11.2016, is that the reopening of assessment is a

clear case of change of opinion.

9. The Assessing Officer would state that a new information was

unearthed during search proceedings, that the assessee received on

money in respect of a transaction to the tune of Rs.30.19 lakhs and

this, according to the Assessing Officer, is a new information

warranting reopening.

10. The assessee, in the said writ petition, contended that this

could never be a new information as the entire case was discussed by

the Assessing Officer while completing the original assessment, all

records were placed before him and specifically, it had been stated

that the sale transaction did not fructify and though the assessee paid

Rs.50 lakhs, what was returned to the assessee was only

Rs.31,24,000/-, which was reflected in the bank statements as well as

financials, which were filed along with the return of income.

11. Therefore, what is required to be seen in the said writ

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petition is as to whether the alleged ground, on which, the reopening

was done, was based on a new material, was there a sale transaction

and more particularly when the assessee was not the owner of the

property. The so called material, which was unearthed during search

proceedings conducted in the premises of the Finance Manager of a

company, has also been furnished to the assessee and the notings

therein need to be considered as to whether any on money was

received by the assessee.

12. Unless these are decided and a finding is rendered, it cannot

be held as to whether the reopening is valid or not. Since such an

exercise has not been done by the learned Single Judge, we are

inclined to interfere with the impugned order. This is more so unless

and until such a finding is rendered, the Appellate Court cannot test

the correctness of the findings. Therefore, in the absence of any such

finding, the Appellate Court cannot be expected to convert itself into

the Court of first instance and decide the writ petition on merits.

Hence, while setting aside the impugned order passed in the said writ

petition, we are inclined to restore the said writ petition to the file of

the learned Single Judge to be heard and decided on merits.

13. For all the above reasons, the writ appeal is allowed, the

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impugned order is set aside and W.P.No.32366 of 2017 is restored to

the file of the learned Single Judge. Consequently, the order of

interim stay granted in the said writ petition stands revived and shall

continue till the disposal of the said writ petition. No costs.

Consequently, the connected CMP is closed.

03.9.2021 To

1.The Principal Commissioner of Income Tax, Income Tax Department, No.67A, Race Course Road, Coimbatore-18.

2.The Joint Commissioner of Income Tax, Non-Corporate Range-3, Income Tax Department, No.67A, Race Course Road, Coimbatore-

3.The Income Tax Officer, Non Corporate Ward 3(1), Income Tax Department, No.67A, Race Course Road, Coimbatore-18.

RS

http://www.judis.nic.in WA.No.2152 of 2021

T.S.SIVAGNANAM,J AND SATHI KUMAR SUKUMARA KURUP,J

RS

WA.No.2152 of 2021& CMP.No.13573 of 2021

03.9.2021

http://www.judis.nic.in