W.P.No.3241 of 2011 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.02.2020 CORAM HONOURABLE MR.JUSTICE C.SARAVANAN W.P.No.3241 of 2011 & WMP.No.3 of 2011 PPN Power Generating Company Pvt. Ltd., Rep.by its authorised representative III Floor, Jhaver Plaza, 1A Nungambakkam High road, Chennai 600034. Petitioner Vs. 1. Commissioner of Income Tax, Aayakar Bhavan, 121, Uthamar Gandhi Salai, Chennai 600 034. 2. Assistant Commissioner of Income Tax, Company Circle V(II), 121, Uthamar Gandhi Salai, Chennai 600 034. 3. Deputy Commissioner of Income Tax, Transfer Pricing officer V (I/C), 121, Uthamar Gandhi Salai, Chennai 600 034. ... Respondents 1/8 http://www.judis.nic.in W.P.No.3241 of 2011 Prayer : Petition filed under Article 226 of Constitution of India, to issue Writ of Certiorari, calling for records comprised in impugned reassessment notice dated 25.02.2010 for Assessment year 2004-05 issued by second respondent and received by petitioner only on 08.09.2010 Under Section 148 of Income Tax Act, 1961 and consequential proceedings initiated by third respondent by impugned notice dated 27.01.2011 bearing reference C.R.No.P.207/TPO-V/A.Y.2004-05 pursuant to reference under S.92CA of Act by second respondent in respect of Assessment Year 2004-05 and quash same as wholly without jurisdiction, illegal, arbitrary and contrary to express mandates set out under provisions of Income Tax Act, 1961. For Petitioner : M/s. Janani Shankar for Mr.R.Parthasarathy For Respondents : Mr. A.N.R.Jayaprathap, Standing Counsel ORDER In this writ petition, petitioner has challenged impugned re-assessment notice dated 25.02.2010 issued by 2nd respondent under Section 148 of Income Tax Act, 1961 reopening of Assessment Year 2004-05 and consequential impugned notice dated 27.01.2011 issued by 3rd respondent. 2/8 http://www.judis.nic.in W.P.No.3241 of 2011 2. order dated 30.03.2005 came to be passed by 3rd respondent under Section 143(1) of Income Tax Act, 1961. It was granted refund of Rs.37,49,210/- to petitioner. Pursuant to aforesaid order, petitioner had also filed Revised Return on 31.10.2005. 3. Thereafter, notices were issued under Section 142(1) and (2) on 16.6.2006, 12.07.2006 and 03.11.2006. petitioner also replied to same. By communication dated 13.11.2006, petitioner requested Additional Commissioner of Income Tax, to complete Transfer Pricing Assessment on merits. 4. Additional Commissioner of Income Tax, Transfer Pricing Officer - II (I/C) has thereafter passed order dated 17.11.2006 and confirmed that no adjustment is considered necessary to value of international transaction entered into by petitioner. Accordingly, assessment dated 29.12.2006 was passed and petitioner was directed to pay sum of Rs.1,93,92,029/-. 3/8 http://www.judis.nic.in W.P.No.3241 of 2011 5. petitioner therefore preferred appeal before Commissioner of Income Tax (Appeals) -V, against above assessment order dated 29.12.2006 passed under Section 143(3) read with Section 92CA(4) of Income Tax Act, 1961. 6. Commissioner of Tax (Appeals)-V by order dated 30.07.2007 passed detailed order and partly allowed appeal filed by petitioner. 7. By communication dated 12.09.2007, Income tax Officer also given effect to order of Commissioner of Income Tax (Appeals). Revenue thereafter preferred appeal before Income Tax Appellate Tribunal in I.T.A No.2393/Mds/2007. Revenue's appeal was partly allowed by said Tribunal vide its order dated 02.03.2009. 8. petitioner had thereafter filed T.C.A before this Court. During interregnum, impugned notice dated 25.02.2010 has been issued under Section 148 of Income Tax Act, 1961 to petitioner, to reopen assessment. By letter dated 16.09.2010, reasons for reopening of assessment has been communicated. 4/8 http://www.judis.nic.in W.P.No.3241 of 2011 relevant portion of said communication reads as follows:- "It is noticed provisions for anticipated contract losses of Rs.7474 lakhs to be added back in computing book profit under Section 115 JB as same is only provision and not ascertained liability." 9. Meanwhile, 3rd respondent by communication dated 27.01.2011 has called upon petitioner to furnish information in terms of Section 92D and Section 92E of Income Tax Act, 1961 as per questionnaire enclosed. 10. It is contention of learned counsel for petitioner that proceedings initiated by impugned notice dated 25.02.2010, to reopen assessment was contrary to law settled by Honourable Supreme Court in CIT Vs. Kelvinator of India, (2010) 2 Scc 723 and that of another decision of Honourable Supreme Court in Asst Commissioner of Income Tax Vs. Rajesh Jhavari Stock Brokers Private Limited (2007) 161 Taxman 316. 11. Heard learned counsel for petitioner and learned standing counsel for respondents. 5/8 http://www.judis.nic.in W.P.No.3241 of 2011 12. There are several disputed questions of fact which connot be considered by Court in exercise of its jurisdiction under Article 226 of Constitution of India. 13. reason for reopening assessment appears to be on account of operational expenses claimed by petitioner while filing returns. 14. Issue as to whether there was true and full disclosure at time of filing of returns or not and whether respondent could reopen assessment under Section 148 of Income Tax Act, 1961 and whether reasons for reopening assessment was on account of change of opinion or not has to be only decided by respondents. 15. Further, as per Section 147 of Income Tax Act, 1961, if circumstances contemplated under 1st proviso are not satisfied, assessing officer cannot further proceed as expression used is "unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under section 139 or in response to notice issued under sub-section (1) of section 142 or section 148 6/8 http://www.judis.nic.in W.P.No.3241 of 2011 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." 16. Therefore, I direct petitioner to participate in adjudication mechanism prescribed under provisions of Income Tax Act, 1961 before respondents. Petitioner is also directed to furnish information called for by 3rd respondent in questionnaire enclosed along with notice dated 27.01.2011 within such period. Petitioner may also file its representations and raise all objections/defences if any, both on facts and law that are available to, within period of thirty days from date of receipt of copy of this order, before respondents. 17. Respondents are thereafter directed to pass appropriate order in accordance with law within period of three months from date of receipt of copy of this order keeping in mind express requirement of proviso to Section 147 of Income Tax Act, 1961 and settled principles of law. 7/8 http://www.judis.nic.in W.P.No.3241 of 2011 C.SARAVANAN, J. av 18. This Writ Petition stands disposed with above observation. No cost. Consequently, connected Miscellaneous Petition is closed. 05.02.2020 Index :Yes/No Internet: Yes/No Speaking/Non-speaking order av/jen To 1. Commissioner of Income Tax, Aayakar Bhavan, 121, Uthamar Gandhi Salai, Chennai 600 034. 2. Asst. Commissioner of Income Tax, Company Circle V(II), 121, Uthamar Gandhi Salai, Chennai 600 034. 3. Deputy Commissioner of Income Tax, Transfer Pricing officer V (I/C), 121, Uthamar Gandhi Salai, Chennai 600 034. W.P.No.3241 of 2011 8/8 http://www.judis.nic.in PPN Power Generating Company Pvt. Ltd. v. Commissioner of Income-tax, Chennai / Assistant Commissioner of Income-tax, Company Circle V(II), Chennai / Deputy Commissioner of Income-tax, Transfer Pricing officer V (I/C), Chennai