2017 (9) TMI 253 - HC - Income Tax

Reopening of assessment - Non-consideration of application for getting a copy of the approval letter issued on Employees Superannuation Scheme - escaped assessment within the meaning of Section 147 - Held that - We do not think that in this Writ Petition, we can allow the petitioner to raise the issue of non-consideration of this application for approval or not passing any order on the request in that behalf. We find that the petitioner superannuation scheme is subjected to tax and an order was passed by the Income Tax Officer28(2)(5), Mumbai, on 17th March, 2016. That is for the assessment year 2013-2014. When the substantive appeal is also pending against the assessment order dated 17th March, 2016 for the assessment year 2013-2014, we are not inclined to grant any relief in our writ jurisdiction. It would be open for the petitioner to raise all grounds during the reassessment proceedings and in pending appeal. It can also resist the demand for the assessment year 2013-2014 on all permissible grounds.- Petition is misconceived and is dismissed.

Issues:
1. Challenge to a notice dated 30th March, 2017.
2. Relief sought in terms of prayer clause (c) for producing an approval letter.
3. Approval requirement for the superannuation scheme under the Income Tax Act, 1961.
4. Tax implications on the superannuation scheme.
5. Non-consideration of the approval application.
6. Reopening of assessment for income tax.

Detailed Analysis:

1. The petitioner, an Employees Superannuation Scheme registered as a trust, challenged a notice dated 30th March, 2017. The petitioner decided not to press the petition regarding certain prayer clauses, indicating a specific focus on the relief sought under prayer clause (c) to direct the Respondent to produce an approval letter.

2. The primary issue revolves around the requirement of an approval letter for the superannuation scheme under the Income Tax Act, 1961. The petitioner relied on a communication directing them to make a fresh application for approval in accordance with the Act's provisions. The approval is crucial for the trust to claim benefits under the approved superannuation funds.

3. The judgment highlighted that the petitioner's superannuation scheme faced tax implications due to an order passed by the Income Tax Officer for the assessment year 2013-2014. Despite the pending appeal challenging this order, the petitioner raised concerns about non-consideration of their approval application, emphasizing the importance of obtaining approval for tax benefits.

4. The court noted that the petitioner had been claiming approval since November 2008, with multiple applications made over the years. However, the court declined to entertain the issue of non-consideration of the application in the writ petition, emphasizing that such matters should be addressed during reassessment proceedings and pending appeals.

5. Regarding the reopening of assessments for income tax, the court stated that the petitioner could raise all grounds during the reassessment proceedings and pending appeal for the assessment year 2013-2014. The court dismissed the petition, emphasizing that seeking a direction under prayer clause (c) could not exempt the petitioner from legal consequences, deeming the petition misconceived.

In conclusion, the judgment focused on the legal intricacies surrounding the approval requirements for the superannuation scheme under the Income Tax Act, tax implications, and the petitioner's attempt to challenge the notice while emphasizing the importance of addressing such issues through appropriate legal channels.

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