COMMISSIONER OF INCOME TAX vs. M/S PRIME PRODUCTS LIMITED

T.C.A.No.838 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.11.2019 CORAM: THE HONOURABLE Mr. JUSTICE M.SATHYANARAYANAN AND THE HONOURABLE Mr. JUSTICE N.SESHASAYEE T.C.A.No.838 of 2019 The Commissioner of Income Tax Coimbatore. ... Appellant / Appellant Vs M/s.Prima Products Limited 185, A.T.D. Street Race Course Coimbatore – 18.

... Respondent / Respondent Prayer:- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, “D” Bench, Chennai dated 02.09.2005 in ITA.No.1576/Mds/2002. For Appellant : Mr.T.R.Senthil Kumar JUDGMENT [Order of the Court was made by M.SATHYANARAYANAN, J.] The Revenue is the appellant. 2. The Joint Commissioner of Income Tax, Special Range-I, Coimbatore, vide Assessment Order dated 06.03.2000. issued a notice 1/5 http://www.judis.nic.in T.C.A.No.838 of 2019 under Section 148 of the Income Tax Act, on 05.11.1997, to the assessee for re-opening the assessment pertaining to the year 1992-1993, after obtaining prior approval from the Commissioner of Income Tax, Coimbatore, and raised a total demand of Rs.21,25,310/-. The assessee challenging the legality of the said order, filed an appeal and vide impugned order dated 23.07.2002, the Commissioner of Income-Tax (Appeals)-I, Coimbatore, has held that there is no failure on the part of the assessee, and therefore, the assessment cannot be reopened after the expiry of four years from the end of the assessment year, under proviso to Section 147 and also placed reliance upon the judgment of this Court in Fenner (India) Limited Vs. DCIT, reported in [241 ITR 672]. 3. The Revenue, aggrieved by the order of the the Commissioner of Income-Tax (Appeals)-I, Coimbatore, dated 23.07.2002, filed an appeal before the Income Tax Appellate Tribunal, Chennai, 'D' Bench. The Appellate Tribunal, on assessing the material facts placed before the Assessing Officer at the time of original assessment, has found that the issuance of re-assessment notice under Section 147 and 148, is without due application of mind and without jurisdiction, and the re-assessment proceedings initiated under Section 147 of the Act, was merely on audit objection and therefore, held that the re-assessment order issued under Section 147/148 is bad in law and dismissed the appeal filed by the Revenue, vide impugned order dated 02.09.2005. 2/5 http://www.judis.nic.in T.C.A.No.838 of 2019 4. The Revenue aggrieved by the dismissal order, preferred the present appeal and in the grounds of appeal memorandum, the Revenue has raised the following substantial questions of law : 1. Whether on the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in law in dismissing the appeal filed by the revenue, that the reopening of the assessment under Section 147/148 of the Income-tax Act is barred by limitation? 2. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that, reassessment under Section 147 was on account of mere change of opinion. 3. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in allowing the deduction under Section 80IA of the Income-tax Act, even though income derived by the assesssee not from Industrial Undertaking? 5. The learned Standing Counsel appearing for the Revenue has invited the attention of this Court to the Circular No.17/2019 dated 08.08.2019, issued by the Central Board of Direct Taxes and would submit that pursuant to the said circular, which came into effect from 08.08.2019, the above tax appeal may be dismissed on account of low tax effect, however, the substantial questions of law raised in the appeal shall be left 3/5 http://www.judis.nic.in T.C.A.No.838 of 2019 open, and also invited the attention of this Court to the order dated 22.08.2019 in TCA.No.343 of 2012 [The Commissioner of Income Tax, Chennai III, Chennai Vs. MEC International Ltd., Chennai-600 026]. 6. This Court has considered the submissions made by the learned Standing Counsel appearing for the Revenue-appellant 7. In the light of the said circular, the Tax Case Appeal is dismissed on account of low tax effect, however this decision pertains to the Assessment Year 1992-1993 alone, and will not bind any similar substantial questions of law, which may arise in respect of subsequent Assessment Years, involving the same assessee. No costs. [M.S.N., J.,] [N.S.S., J]

12.11.2019 Index : Yes / No Internet : Yes / No Speaking order / Non-speaking order ds To: 1. The Commissioner of Income Tax Coimbatore. 2.The Income Tax Appellate Tribunal Madras D Bench, Chennai. 4/5 http://www.judis.nic.in T.C.A.No.838 of 2019 M.SATHYANARAYANAN, J., and N.SESHASAYEE, J., ds T.C.A.No.838 of 2019 12.11.2019 5/5 http://www.judis.nic.in