1 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.10.2017 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No.6624 of 2005 Reliance Motor Co. Ltd., rep. by its Managing Director, M.Ct.Muthiah, 761, Anna Salai, Chennai-600002. Petitioner Vs. Asst. Commissioner of Income Tax, Company Circle III(2), 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600034. ... Respondent Petition filed under Article 226 of Constitution of India praying for issue of Writ of Certiorari, to call for records in Co.Cir.III(2)/32291/99-00 & 00-01, dated 02.02.2005 on file of respondent and quash same. For Petitioner : Mr.M.P.Senthil Kumar For Respondent : Mr.J.Narayanaswamy, Standing Counsel ***** ORDER Heard Mr.M.P.Senthil Kumar learned counsel appearing for petitioner and Mr.J.Narayanaswamy, learned Standing Counsel appearing for respondent. http://www.judis.nic.in 2 2.The petitioner has filed this writ petition seeking for issuance of writ of certiorari, to quash order dated 02.02.2005, by which, respondent has rejected objections raised by petitioner for reopening of assessment for Assessment Years 1999-2000 and 2000-01. petitioner has raised several grounds challenging impugned order and more particularly, that reopening is barred by limitation. respondent has assigned certain reasons while rejecting petitioner s objections. When this writ petition was admitted on 01.03.2005, Court granted conditional interim order by directing respondent to proceed with assessment proceedings and pass final orders, implementation of same shall be withheld till stay petition is disposed of. 3.As against order of assessment passed, petitioner has preferred appeal before Commissioner of Income Tax (Appeals-11), Chennai, in ITA No.10/CIT(A)-11-2005-06. 4.Learned Standing Counsel for respondent submitted that before appellate authority, petitioner has canvassed all contentions raised in present writ petition, apart from factual contentions challenging assessment order. 5.In light of subsequent development, this Court is of view http://www.judis.nic.in 3 that appellate authority should be directed to consider all issues raised by petitioner, both legal and factual. primary contention raised by petitioner is that reopening itself is erroneous, as assessing officer has no reason to believe that income had escaped assessment; reason for reopening is bad in law and not sustainable; since advance was received by assessee s company, which was not registered shareholder in lender company, provisions of Section 2(22)(e) has no application in hands of assessee and issue stands covered by judgments of two Division Benches of this Court in case of Principal Commisssioner of Income Tax, Chennai vs. M/s.Ennore Cargo Container Terminal P.Ltd., in TCA Nos.105 & 106 of 2017 dated 27.03.2017 and in case of Commissioner of Income-tax, Chennai vs. Printwave Services (P.) Ltd. reported in [2015] 373 ITR 665(Madras). 6.It is further contention of petitioner that aforementioned judgments have been considered by Tribunal in case of Asstt. CIT vs. Bhoumil Colour (P.) Ltd. reported in [2009] 118 ITD 1/27 SOT 270 (Mum) (SB), wherein it was held that since assessee was not registered as beneficial owner of shareholder, it was not liable to be taxed under provisions of Section 2(22)(e) of Income Tax Act. Therefore, it is contended that it would cause unnecessary hardship to petitioner, if reopening is done. Since assessment order has http://www.judis.nic.in 4 already been done and pursuant to interim order passed by this Court, petitioner is on appeal before Commissioner, it is appropriate for petitioner to pursue such appeal remedy, since Commissioner, being fact finding authority, would be able to appreciate/reappreciate factual position and take note of legal position. It is needless to state that Commissioner (Appeals), while deciding appeal, first decide question as to whether reopening of assessment and assumption of jurisdiction under Section 147 of Income Tax Act was justified or was it erroneous as done on factual matrix. 7.Accordingly, this writ petition is disposed of by directing Commissioner (Appeals) to take on file appeal in ITA No.10/CIT(A)- 11-2005-06, hear petitioner/authorized representative and decide question as to whether reopening was justified as first among other issues. Till orders are passed by Commissioner (Appeals), assessment made on petitioner pursuant to reopening shall be kept in abeyance. No costs. 12.10.2017 Index:Yes/No abr http://www.judis.nic.in 5 To Asst. Commissioner of Income Tax, Company Circle III(2), 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. http://www.judis.nic.in 6 T.S.SIVAGNANAM, J. abr W.P.No.6624 of 2005 12.10.2017 http://www.judis.nic.in Reliance Motor Co. Ltd. v. Asst. Commissioner of Income-tax, Company Circle III(2), Chennai