Madras High Court
Ayyappan Pillai Kumaresan vs The Income Tax Officer on 12 September, 2022
W.P.No.24376 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12.09.2022
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.No.24376 of 2022
and WMP Nos.23376 and 23377 of 2022
Ayyappan Pillai Kumaresan
... Petitioner
Vs
The Income tax Officer,
Ward – 1, Nagercoil – 629 001.
... Respondent
Prayer:Writ Petition filed under Article 226 of the Constitution of India, to issue
Writ of Certiorari calling for the records of the respondent in DIN and Letter
No.ITBA/COM/F/17/2022-23/1044271520(1) dated 29.7.2022 and in furtherance
to it, the notice u/s. 148 dated 29.7.2022 issued in Din and Letter
No.ITBA/COM/F/17/2022-23/104427679(1) for the A.Y.2015-16 and quash the
same.
For Petitioner : Mr.T.Vasudevan
For Respondent : Mr.ANR.Jayaprathap
Junior Standing Counsel
1
https://www.mhc.tn.gov.in/judis
W.P.No.24376 of 2022
ORDER
The petitioner has challenged an order passed under Section 148A(d) of the
Income Tax Act, 1961 (in short 'Act') issued by the Assessing Officer relating to
proceedings for re-assesment for assessment year (AY) 2015-16 (assessment year
in question).
2. The petitioner has not filed a return of income for the assessment year in
question. The respondent issued a notice under Section 148A(b) on 18.05.2022 on
the basis of information received to the effect that the petitioner has purchased
immovable property for a sum of Rs.6,74,93,000/- and has also received salary of
a sum of Rs.4,50,000/-, but has not filed a return of income for the relevant
assessment year.
3. Thus and on the prima facie basis there is escapement of income from
assessment, the petitioner was asked to show cause why an order under Section
148A(d) not be passed. In issuing the show cause notice, the respondent refers to
the evidences available with him in support of his prima facie belief of escapement
of tax.
4. The petitioner, vide response dated 20.05.2022, stated that he is an
employee of a company by name Sheng Long Bio-tech (India) Pvt. Ltd. that had
https://www.mhc.tn.gov.in/judis
W.P.No.24376 of 2022
entered into a long term lease of 99 years with State Industries Promotion
Corporation of Tamilnadu Ltd. (SIPCOT). He acceded to the position that, in the
documentation entered into by the company with SIPCOT, his Permanent Account
Number (PAN) had been used for reporting the transaction. He adopted the stand
that despite the aforesaid admitted circumstances, the transaction did not pertain to
him at all.
5. In response to the show cause notice, the petitioner filed a return of
income only on 31.05.2021 offering not just the salary income of Rs.4,50,000/-
earned from Sheng Long Bio-tech (India) Pvt. Ltd., but a sum of Rs.15,08,081/-
earned as a salary income from another entity, by name UPEC (India) Foods
Private Limited, as well.
6. Thus, it is clear that there had been escapement of income to tax insofar
as even salary income admittedly received by the petitioner had not been offered
to tax by him at the first instance and this would not have come to light had notice
under Section 148A(b) not been issued. In fact, the tax deducted at source does
not cover the tax due for the year and the return filed along with tax computation
pursuant to receipt of notice under Section 148A(b) establishes this position
categorically.
https://www.mhc.tn.gov.in/judis
W.P.No.24376 of 2022
7. Upon consideration of the reply filed by the petitioner, the impugned
order under Section 148A(d) has come to be passed reiterating that the agreement
filed had, indeed, contained the PAN of the petitioner. At paragraphs 2 and 3, the
Assessing Officer states as follows:
2. Assessee vide its reply stated that the assessee is an
employee of a company M/s.Sheng Long Bio-tech (India) Private
Limited and for the FY 2015-16 the company had entered into a
long term lease of 99 years with SIPCOT by making a payment of
Rs.6,51,79,400/- for construction of factory by the said company.
Being a Project Officer, assessee had signed in agreement and his
PAN may be used by the company for this transaction etc.
3. It is to be noted that the details and data shown by the
assessee is for the FY 2015-16 relevant to AY 2016-17. The issues
involved in this case is relevant for the FY 2014-15 relevant to the
AY 2015-16 and hence the reply filed by the assessee is irrelevant
and therefore, it is considered that THIS IS A FIT CASE for
reopening u/s.147 of the IT Act 1961 for the reasons stated above.
8. The Officer categorically states that the details set out by the petitioner
relate to financial year 2015-16, relevant to assessment year 2016-17, whereas the
issue raised by the officer in this case would be relevant to financial year 2014-15,
relevant to assessment year 2015-16.
9. Thus, on the basis of the discussion as above, he proceeds to issue notice
under Section 148A of the Act holding it to be a fit case for reopening of
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W.P.No.24376 of 2022
assessment. Necessary approvals have also been obtained that have not been
challenged.
10. On the basis of the discussion as above, I find absolutely no infirmity in
the order that has been passed assuming jurisdiction for re-assessment. After all
the proceedings on merits involve the appreciation and determination of various
relevant facts and it is very clear from the discussion as above that the petitioner
has not (i) filed his return when taxable income had been received, (ii) not paid the
tax on the salary income earned and (iii) utilised his PAN for sale transaction
involving consideration of Rs.6.74 crores (approx) that had not been reported by
him.
1. The reference to the judgment of the Hon'ble Supreme Court in the case of
Calcutta Discount Company Limited V. Income Tax Officer (41 ITR 191)
does not advance the case of the petitioner in the least. My attention is
drawn to paragraph No.27, wherein the Hon'ble Supreme Court has opined
that an assessee must not be subjected to a lengthy process of assessment
where it was clear that the Assessing Officer had assumed jurisdiction
without any authority.
https://www.mhc.tn.gov.in/judis
W.P.No.24376 of 2022
Dr.ANITA SUMANTH,J.
12. In the present case, I am of the categoric view that there is no lacuna in
the assumption of jurisdiction by the Assessing Authority and there is no infirmity
that is made out in this regard. For all the aforesaid reasons, the impugned order is
upheld and this Writ Petition, dismissed. No costs. Connected Miscellaneous
Petitions are also dismissed.
sl 12.09.2022
Index : Yes
Speaking Order
To
The Income tax Officer,
Ward – 1, Nagercoil – 629 001.
W.P.No.24376 of 2022
and WMP Nos.23376 and 23377 of 2022
https://www.mhc.tn.gov.in/judis
