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TMI Blog2019 (10) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... facts leading to the filing of the Writ Petition in W.P.(MD)No. 19202 of 2018 are taken into consideration for deciding the issue at hand. 3. The Writ Petition in W.P.(MD)No. 19202 of 2018 challenges the order passed by the first respondent in PAN:AADCA9414C/ACIT/TRY/2011-12, dated 26.07.2018 along with notice in PAN:AADCA9414C, dated 31.03.2018, issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2011-2012. 4. The petitioner filed his original return on 29.09.2011. Thereafter, vide F.No. ACIT/CC-2/2013-14, dated 14.10.2013, further details were sought for by the second respondent, which, he submitted on 26.10.2013 and 09.11.2013. In that letter, it is disclosed as to which are the companies holding shares above 10%. The petitioner has disclosed the allotment of shares, opening share capital, share capital raised during the year, closing share capital, total turnover, gross profit, net profit and all other details as required by the second respondent. He filed Form 2 to disclose all the details showing the shares allotted to other persons above 10%. After considering all these details, the second respondent passed an assessment order on 31.03.2014, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that charges so as to receive kickbacks in personal names and Dalmia Group is in the habit of booking bogus bills in the accounts. All these reasons are culminated in the initiation of proceedings under Section 148 and it is observed in closing paragraph as under: "8. It is surprising as to why the Dalmia Bharat Ltd., paid 2.4 times to KKR for the buyback of its investment of Rs. 500 crores in 2010 amounting to approx. Rs. 1218 crores. As the transaction mentioned above is important due to the sensitivity it attracts and for the requirement of deep digging of data to retrieve the final information through the means of exchange of information forum the issue needs to be relooked through reopening of the case for reassessment of Dalmia Cement Bharat Ltd., Dalmia Bharat Ltd., Dalmia Bharat Enterprises Ltd. and Avnija Properties Ltd. 9. Another allegation pertains to the Dalmia Group investing around Rs. 5000 crores by way of capital expenditure on setting up cement manufacturing facility and various part of the country in "last 4 years". As the TEP was received in F.Y. 2016-17 in the office of DGIT (Inv.), Mumbai therefore the aforementioned "last 4 years" may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is not disclosed and the definite reason to arrive at a decision as to the escaped assessment. It cannot be based on the information generally known by believing or on wild belief. In support of his contention, he would rely on the following judgments: (1) Asianet Star Communications (P) Ltd. vs. ACIT (2019) 106 Taxmann.Com 293 (Mad-HC); (2) Sterlite Industries (India) Ltd. vs. ACIT (2008) 305 ITR 339 (Mad HC); (3) Fenner (India) Ltd. vs. DCIT (2000)241 ITR 672 (Mad HC); (4) CIT vs. Schwing Stetter India P. Ltd. (2015) 378 ITR 380 (Mad HC); (5) NuPower Renewables (P.) Ltd. vs. ACIT (2019) 104 Taxmann.com 307 (Bom HC); (6) CIT vs. S & S Power Switchgear Ltd. (2018) 92 Taxmann.com 429(Mad); (7) PCIT v. Manzil Dineshkumar Shah (2018) 406 ITR 326 (Guj); (8) Krupesh Ghanshyambhai Thakkar vs. DCIT (2017)77 Taxmann.com 293(Guj HC); (9) CIT vs. Kelvinator of India Limited (2010) 320 ITR 561 (SC); (10) Rubix Trading vs. ITO [W.P. No. 3130 of 2018, dated 20.12.2018] (Bom HC); (11) CIT vs. Usha International Ltd. (2012) 253 CTR 113 (Del-HC); (12) Ganga Saran & Sons (P) Ltd. vs. ITO [(1981) 130 ITR 1 (SC)]; (13) South Yarra Holdings vs. ITO (2019) 104 Taxmann.com 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or section 148; or (c) to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 9. The learned Senior Counsel would further submit that in respect of required things, namely (a) and (b), the assessee has filed his return under Section 139 and he has filed his reply in response to the notice issued under Section 142 as well as Section 148. 10. The only issue, which is to be decided, is as to whether the assessee has disclosed fully and truly what material facts necessary for his assessment, for that assessment year or not. 11. In that aspect, the petitioner would submit that he has submitted all the necessary details in Form-2 with all other attachments including the reply given to the notice issued under Section 142. Against the order passed by the Assessing Authority, the petitioner also filed an appeal to the Commissioner of Income Tax, in which, all these points were elaborately discussed and thereafter, the order charging tax under Section 139 was set aside and the appeal was partly allowed and consequent upon the order, it was given effect to by the other consequential order under Section 250/154/153A/143(3) of the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Additional Solicitor General of India appearing for the respondents would contend that after issuance of notice under Section 148, the petitioner has not chosen to challenge the same in time. But, whereas, he has submitted himself to the proceedings and filed returns, as directed by the authorities and also filed his objections. Once he submitted himself to the jurisdiction, he shall await the orders of the Assessing Authority and he cannot rush to the Court without awaiting the orders. Therefore, once the matter is subjudice before the fact finding authority, challenging the notice issued under Section 148 is without cause of action and hence, the Writ Petitions are not maintainable. 16. In support of the contention, he would rely on the judgment of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd., vs. Income Tax Officer and others reported in 2003(1) SCC 72, wherein the Hon'ble Supreme Court has held that the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices and on receipt of notice, he can file objection and he cannot rush to the Court without awaiting for the orders to be passed in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the view that the order reopening the assessment was not maintainable. 27. The Supreme Court, in Commissioner of Income Tax v. Corporation Bank [254 ITR 791] has had occasion to consider a similar issue holding as follows: Turning attention to the first question as regards the provisions under Section 147(a) be it noted and as the facts depict, there is no failure on the part of the assessee in furnishing the particulars pertaining to the above noted sum as not recoverable for the relevant accounting year and the statements filed along with the original return disclosed the full details of the aforesaid account. There is, therefore, no failure on the part of the assessee to disclose fully and truly the material facts necessary for the assessment years for the respective years and as such Section 147(a) has no manner of application and is not attracted in the facts of the matter under consideration. The High Court on consideration of the facts came to the conclusion that the Tribunal was justified in coming to the said finding and we also record our concurrence therewith. 28. The Supreme Court in the case of Commissioner of Income Tax v. Kelvinator of India Ltd., and another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed. Thus, even in cases where there is no discussion in regard to specific issues, if it is established by the assessee that all material relevant and germane to that issue were available before the Assessing Officer, easily discernible and part of the record, reassessment is impermissible. Then again, it does not stand to reason that an officer, once convinced by the submissions of an assessee, will proceed to devote time to recording is agreement in a detailed and reasoned fashion. The legitimate and reasonable expectation is that a detailed and speaking order is passed in cases where he differs and dissents from the stand of the assessee. On this score, the arguments of Mr. J. Narayanasamy in this regard have no merit and are rejected. 41. In fine, all relevant, primary particulars have been produced/filed/furnished by the petitioner at the first instance before the authorities, in a transparent fashion. It is for the officer to have appreciated the same and arrived at the necessary and appropriate inferences at that juncture. Having missed the bus at that point, the Department cannot seek to re-assess the income as culled from material already on record, as this consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, Paragraph No. 5 of the order, the Supreme Court has observed as under: "5. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." 24. In the instant cases, notices under Section 148 are issued, against which, the petitioner filed the return of the particular assessment year and also filed his reply seeking reasons. The first respondent has given the reasons for the same, against which, the petitioner filed his objections, which were reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave drawn? It may be pointed out that the Explanation to the sub-section has nothing to do with "inferences" and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the income-tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose "inferences" - to draw the proper inferences being the duty imposed on the income-tax officer." 27. In the instant cases, the assessee has submitted Form-2 disclosing all the materials giving all the explanations. In such circumstances, it cannot be said that he has not submitted all the materials fully and truly. Therefore, once the assessee has submitted reply; once he submitted the returns for the assessment year; and once he has filed a reply to the notice under Section 148 and files his objections to the reasons for issuance of 148 notice before the very same authority, Section 147 is fully complied with. Further, the objections raised by the assessee had been considered and rejected by the Assessing Authority, but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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