Madras High Court
Pradeep Stainless Steel India P Ltd vs The Deputy Commissioner Of Income Tax on 1 July, 2025
TCA No.492 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 01.07.2025
CORAM :
THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE SUNDER MOHAN
TCA No.492 of 2016
Pradeep Stainless Steel India P Ltd.,
C-3 Phase II, Main Road,
MEPZ, Tambaram,
Chennai-600 045.
Appellant
Vs
The Deputy Commissioner of Income Tax,
Company Circle-V(2),
Income Tax Department,
Chennai-600 034.
Respondent
Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961
against the order of the Income Tax Appellate Tribunal “A” Bench,
Chennai, dated 20.11.2015 in ITA No.1750/Mds/2013.
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TCA No.492 of 2016
For Appellant: Mr.A.Sriraman
For Respondent: Mrs.V.Pushpa
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
For the assessment year 2005-06, assessee, who is appellant herein,
filed return of income on 5.10.2005 admitting a total income of
Rs.44,982/- The assessment was completed under Section 143(3) of the
Income-tax Act, 1961 [the Act] vide an order dated 26.12.2007.
Subsequently, notice under Section 148 of the Act was issued and the
assessment was subjected to re-assessment under Section 147 of the Act
and re-assessment order under Section 143(3) read with Section 147 of the
Act came to be passed on 30.08.2010 re-assessing assessee's income at
Rs.2,01,58,510/-. Against the said order, an appeal was filed by assessee
and the Commissioner of Income Tax (Appeals) [CIT(A)] allowed the
appeal by an order dated 13.06.2013.
2. Aggrieved, revenue has preferred an appeal before the Income Tax
Appellate Tribunal [the ITAT], which, by an order dated 20.11.2015,
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confirmed the validity of the re-assessment order and remitted the matter
back to the file of CIT(A). It is that order, which is challenged by assessee.
On 01.07.2016, the following two substantial questions of law were framed
while admitting the appeal:
“1. Whether the Appellate Tribunal is correct in law in sustaining
the re-assessment framed for the Assessment Year 2005-06 u/s
143(3) r/w section 147 of the Act even after noticing the issue which
formed the basis for assumption of jurisdiction for framing the said
re-assessment was taken up for scrutiny and accepted in the
original assessment framed on 26.12.2007 u/s.143(3) of the Act by
the Respondent for the very same Assessment Year 2005-06?
2. Whether the Appellate Tribunal is correct in law in sustaining the
re-assessment framed even though there was no tangible materials
for assuming such jurisdiction to frame the said re-assessment as
well as the apparent change of opinion on his part in revisiting the
concluded issue in the original assessment framed?”
3. The ITAT has accepted the fact that before the original assessment
order under Section 143(3) of the Act was passed on 26.12.2007, multiple
questionnaires under Section 143(2) of the Act were issued and assessee
provided all details. The ITAT, however, says that Assessing Officer did not
ask details of share allotted to each partner of the erstwhile firm, after
succession and, therefore, re-opening was justified. According to the ITAT,
as no opinion was expressed in the original assessment order, it was not a
case of change of opinion.
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4. The fact that questionnaires were issued is admitted. The fact that
assessee replied to all the questions is also not disputed. What
questionnaire is to be issued is totally in the control of Assessing Officer
and assessee has no control over it.
5. As held in Aroni Commercials Ltd. v. Deputy
Commissioner of Income-tax-2(1)1, the manner in which an
assessment order is to be drafted is within the sole domain of Assessing
Officer and it is not open to assessee to insist that Assessing Officer must
raise all questions. We are of the view that once the question has been
raised during the assessment proceedings and assessee has replied to it, it
follows that Assessing Officer was satisfied that no other query is required
to be raised.
6. In the circumstances, there was absolutely no need to refer the
matter for fresh assessment. It is quite clear that re-opening of the
assessment is merely on the basis of change of opinion of Assessing Officer
from that held earlier during the course of assessment proceeding leading
to the original assessment passed under Section 143(3) of the Act. This
1 [2014] 44 taxmann.com 304 (Bombay)
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change of opinion does not constitute justification and/or reasons to
believe that income chargeable to tax has escaped assessment. The
questions of law framed are answered in favour of assessee.
Appeal is allowed. There shall be no order as to costs.
(K.R.SHRIRAM, CJ.) (SUNDER MOHAN, J.)
01.07.2025
Index : Yes/No
Neutral Citation : Yes/No
bbr
To:
1. The Assistant Registrar
Income Tax Appellate Tribunal
“A” Bench, Chennai.
2. The Commissioner of Income Tax (Appeals)-V,
Coimbatore.
3. The Assistant Commissioner of Income Tax,
Company Circle V(2),
Chennai-34.
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THE HON'BLE CHIEF JUSTICE
AND
SUNDER MOHAN,J.
bbr
01.07.2025
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