3G MOBILE WORLD vs. INCOME TAX OFFICER

On 05.12.2017 survey under Section 133A of the Income Tax Act, 1961 (for short 'the Act') was conducted in the business premise of the petitioner/assessee. The survey resulted in reopening of assessment for the Assessment Years 2013-14, 2014-15, 2015-16 and 2016-17 under Section 147 of the Act. The respondent has selected the return for the Assessment Year 2017-18 under the category/ heading 'Manual Verification of Assessment'. The respondent at the time of survey under an inventory of records made and in accordance with law has recovered few documents from the systems maintained by the assessee. This Court, by choice, keeping in view the nature of order this Court is proposing to pass, does not refer to the -3- allegations made against the petitioner and the reply the petitioner has in this behalf. For the present purpose, it would suffice if reference is made to the following:

The respondent through Exts.P4, P5 and P6 issued notice under Section 148 of the Act proposing to assess/ reassess the income of the petitioner for Assessment Years 2013-14, 2014-15, 2015-16 and called upon the petitioner to file a return in the prescribed form. The petitioner in response thereto insisted upon the respondent to furnish the reasons for reopening the assessment. Exts.P7, P8 and P9 refer to the reasons warranting reassessment into subject assessment orders. The petitioner through Ext.P10 filed its reply and through Ext.P13 made the following requests: “The reopening of assessment are done by you on the basis of certain incomplete Trial Balance taken by you from the electronic equipments. Kindly note that any information or data taken from the -4- computer, the determination related to the admissibility and legitimacy of such data in whatever form has to be undertaken as per the mandatory presumption of section 65A, 65B of the Indian Evidence Act read with Section 93 and second schedule of the Information Technology Act 2000 before adopting such evidence for the purpose of assessment. I may submit that none of the legal requirement as above are completed with before proceeding with the information from computer. Kindly bring to record my above objection for the proposed assessment in view of the above circumstances.”

Hence the present writ petition for the following reliefs: “(a) Call for the records leading to the issuance of Exhibits P4, P5, P6 orders and quash the same by issuing a writ of certiorari. (b) Pending hearing and final disposal of the Writ Petition, this Hon'ble Court be pleased to grant stay of recovery of proceedings pursuant to Exhibits P4, P5 and P6. (c) Issue such other and further reliefs as this Hon'ble Court may deed fit and proper in the interest of justice.”

Sri Anil D Nair has not made submissions on the principal challenge made in the writ petition, but has limited -5- his submission to direct the respondent to consider and dispose of Ext.P13 in as much as a decision on Ext.P13 enables the petitioner to appreciate where the petitioner stands vis-à-vis the documents seized from the custody of petitioner-assesse. In other words, the request of petitioner is for a ruling on the view the respondent may likely to take while reassessing or assessing under Section 148 of the Act and that whether the assessment is going to be exclusively on the material now collected or after referring to the entire material available on record or not.

The learned counsel could not invite the attention of the Court to any Rule or Section which mandates the respondent to first give a ruling on Ext.P13. However, it is contended that the respondent is required to keep in view Sections 65A and 65B of the Indian Evidence Act, Section 93 and Second Schedule of Information and Technology Act, 2000 read with Section 2, 22AA and Section 132(i)(b) of the Income Tax -6- Act. According to the petitioner the documents now seized by the respondent in the survey conducted on 05.12.2017 do not have evidentiary value under the Evidence Act and are to be excluded completely from consideration. Therefore, he prays for a direction to consider Ext.P13 before hand and intimate the decision

Mr. Christopher Abraham opposes writ prayer in all fours. According to him the prayer in Ext.P13 cannot and could not be entertained, independent of the procedure under Section 148 of Income Tax Act. According to the Standing Counsel the instant case is one of assessment/ reassessment upon reopening the self assessment already accepted by the Department. The respondent has already given the reasons while the assessments are reopened, either assessed or reassessed. The respondent's discretion in law cannot be stifled by this Court with a direction to express a view on Ext.P13. Mr. Christopher Abraham submits -7- that applying Evidence Act or Information Technology Act is firstly unavailable and illegal. The provisions of Evidence Act are not made applicable and that the data retrieved from or collected from a system is appreciated as a document or account by keeping the view the definition assigned to ‘books of accounts’, ‘ledgers’, ‘documents’ etc under the Act.

According to him, the assessments are reopened because the revenue doubts that the assessee has inflated the expenditure and thereby has not shown the correct income. The assesse is now called upon to file the return and the assessee can certainly file a return and bring home genuineness of each one of the entries the assessee relies on and prays for dismissing the writ petition.

I have perused the records and taken note of the rival submissions made by the counsel appearing for the parties. The petitioner, as already noted, has not pressed the substantive -8- prayers made in the writ petition but an attempt has been made to convince this Court for issuing a direction to consider Ext.P13. Ext.P13 is already excerpted and this Court is of the view that the very request now made for a direction for consideration of Ext.P13 firstly is premature and unavailable at the stage of consideration of notice under Section 148 of the Act. The respondent has set in motion the steps for reassessment upon reopening the assessment orders. The petitioner is afforded opportunity to substantiate its return. Under those circumstances, the petitioner by praying for a writ of mandamus or direction as noted above, would virtually lay the path on which the proceedings under Section 148 are to be undertaken and concluded. This Court is of the view that now that the proceedings under Section 148 are initiated, the commencement as well as conclusion are very well defined by the procedure under the Income Tax Act. In other words, the -9- Assessing Officer is seized of the issue and the prayer now made if is considered the same amounts restricting the discretion by this Court and in the peculiar facts of this case, this Court is of the view that such directions amount to intercepting the otherwise duly regulated power of Assessing Officer and substituting the view of this Court. This Court is not persuaded to accept the request of petitioner. Therefore, no ground is made out warranting the issuance of a direction to the limited extent noted above.

The writ petition fails and dismissed. However, Mr. Anil D Nair apprehends that the objections that are available in this behalf may also be shut out by understanding the order of this Court in a different way, to avoid such eventuality he requests the Court to permit the petitioner to file additional comprehensive reply to the notices impugned in the writ petition. Mr. Christopher Abraham submits that three weeks’