COMMISSIONER OF INCOME TAX vs. K.SATHIYAMOORTHY

T.C.A.No.841 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.841 of 2019 The Commissioner of Income Tax Salem. ... Appellant / Appellant Vs K.Sathiyamoorthy Prop: Sakthi Pipes 399, Salem Main Road Attur. ... 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, made in ITA.No.2207/Mds/2004 relating to the assessment year 1999-2000. For Appellant : Mrs.V.Pushpa JUDGMENT [Order of the Court was made by M.SATHYANARAYANAN, J.] The Revenue is the appellant. The assessee-company has filed its Returns of Income for the Assessment Year 1999-2000, on 28.12.1999, 1/6 http://www.judis.nic.in T.C.A.No.841 of 2019 stating the total income as Rs.1,14,290/-. In response, the Income Tax Officer (Ward-I ( C), Salem-7, has issued notice under Section 148 of the Income Tax Act on 13.10.2000, followed which the Assessment Order dated 28.03.2002 came to be issued, adjudicating the demand amount to Rs.3,15,600/- and vide said order, the assessee was also informed that that penalty under Sec.271(1)(c) would be initiated against the assessee, vide separate proceedings. 2. The Assessee made a challenge to the said order by filing an appeal before the Commissioner of Income Tax Appellate Tribunal, Salem. The Appellate Authority, vide order dated 07.07.2004, allowed the appeal filed by the assessee, holding that the notice under Section 142 was issued on 13.10.2000 and at that point of time, notice under Section 143(2) could validly be issued upto 13.12.2000, but the Assessing Officer has failed to do so and therefore the assessment deserves to be null and void and ultimately, the Assessment Order passed by the Assessing Officer on 28.03.2002 is held as invalid and thereby annulled the assessment. 3. Aggrieved by the order of the Appellate Tribunal, Salem, the Revenue has filed an appeal in ITA.No.2207/Mds/2004 before the Income Tax Appellate Tribunal. Chennai 'D' Bench. The Tribunal, in its impugned order dated 05.01.2007, has placed reliance upon the decisions of the Allahabad High Court in Jhunjhunwala Vanaspati Ltd., Vs. Asst. 2/6 http://www.judis.nic.in T.C.A.No.841 of 2019 Commissioner of Income-Tax (No.2) [(2004) 266 ITR 664) and the decision of the Hon'ble Supreme Court in CIT Vs. Ranchhoddas Karsondas [(1959) 36 ITR 569] and held the facts of the assessee is similarly identical to the cases cited supra and that since the time limit for issuance of notice under Section 143(2) has not expired, the re- assessment notice exercised under Sec.148 r/w Sec.147 of the Income Tax Act, is invalid and accordingly, dismissed the appeal filed by the Revenue. 4. Challenging the legality of the dismissal order 05.01.2007 in ITA.No.2207/Mds/2004, the Revenue has filed the present appeal. In the grounds of appeal memorandum, the assessee has raised the following substantial questions of law : 1. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in holding that re- assessment proceedings initiated under Sec.148 read with Sc.147 was invalid, in view of the fact that valid return was pending for assessment and the time limit for issuance of notice under Sec.143(2) had not expired? 2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that the reassessment proceedings were invalid especially during the course of survey the assessee had admitted additional income? 3/6 http://www.judis.nic.in T.C.A.No.841 of 2019 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 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 1999-2000 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 4/6 http://www.judis.nic.in T.C.A.No.841 of 2019 ds To: 1.The Commissioner of Income Tax Salem. 2.The Income Tax Appellate Tribunal Chennai Bench D Chennai. 5/6 http://www.judis.nic.in T.C.A.No.841 of 2019 M.SATHYANARAYANAN, J., and N.SESHASAYEE, J., ds T.C.A.No.841 of 2019 12.11.2019 6/6 http://www.judis.nic.in