1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Judgment Reserved on 05.02.2020 Judgment Delivered on 14 .02.2020 Writ Appeal No. 399 of 2019 {Arising out of order dated 05.04.2019 passed by learned Single Judge in Writ Petition (T) No. 70 of 2018} 1. Hariom Rice Mill Private Limited NH-200, having its office at Masturi Road, Post and Village Darrighat, Bilaspur-495001, (C.G.) through its director Mr. Subhash Agrawal, aged about 48 year's, s/o Radheshyam Agrawal, r/o B-104, Sheela Park (C.G.) 2. Mr. Subhash Agrawal, S/o Radheshyam Agrawal, aged about 48 years, r/o B- 104, Sheela Park, Raj Kishore Nagar, Bilaspur (C.G.) Appellants Versus 1. Assistant Commissioner of Income Tax Circle-2(1), Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 2. Principal Commissioner of Income Tax, Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 3. Income Tax Officer-2(1), Bilaspur, Office of Income Tax Officer-2(1), Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 4. Income Tax Officer (Tech. & TPS-2) Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 5. Union of India through its Secretary, Department of Revenue, Ministry of Finance, North Block, New Delhi - 110001. ---- Respondent Writ Appeal No. 337 of 2019 {Arising out of order dated 05.04.2019 passed by learned Single Judge in Writ Petition (T) No. 69 of 2018} 1. Hariom Rice Mill Private Limited NH-200, having its office at Masturi Road, Post And Village Darrighat, Bilaspur-495001, (C.G.). through its director Mr. Subhash Agrawal, aged about 48 year's s/o Radheshyam Agrawal, r/o B-104, R.K. Nagar, Sheela Park (C.G.) 2. Mr. Subhash Agrawal, s/o Radheshyam Agrawal, aged about 48 years, r/o B- 104, Sheela Park, Raj Kishore Nagar, Bilaspur (C.G.) ---- Appellants 2 Versus 1. Assistant Commissioner of Income Tax Circle- 2(1) Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh. 2. Principal Commissioner of Income Tax, Bilaspur Aaykar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh. 3. Income Tax Officer-2(1) Bilaspur, Office of Income Tax Officer-2(1), Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh. 4. Income Tax Officer(Tech. & TPS-2) Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh. 5. Union of India Through its Secretary Department of Revenue, Ministry of Finance, North Block, New Delhi-110001. ---- Respondents Writ Appeal No. 479 of 2019 {Arising out of order dated 05.04.2019 passed by learned Single Judge in Writ Petition (T) No. 235 of 2018} 1. M/s Aaditya Construction partnership firm registered under Indian Partnership Act, 1932 having it office at 56, Indira Commercial Complex, Transport Nagar Korba, (C.G.) through its partner Mr. Amit Kumar Dalmia, aged about 41 years, s/o Mr. Sumer Mal Dalmia, r/o B-7, Housing Board Colony, Balco Nagar, Korba (C.G.) 2. Mr. Amit Kumar Dalmia, s/o Mr. Sumer Mal Dalmia, aged about 40 years, r/o B- 7, Housing Board Colony, Balco Nagar, Korba (C.G.) ---- Appellants Versus 1. Principal Commissioner of Income Tax, Bilaspur, office of Principal Commissioner of Income Tax, Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 2. Income Tax Officer Ward-1, Korba, Office of Income Tax Officer Ward-1, Korba, Mahandi Bhawan, Niharika Road, Korba (C.G.) 3. Joint Commissioner of Income Tax, Range-2, Bilaspur, office of Joint Commissioner of Income Tax, Range-2, Bilaspur, Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 4. Union of India through its Secretary Department of Revenue, Ministry of Finance, North Block, New Delhi - 110001. ---- Respondents 3 For Appellant s : Shri Siddharth Dubey, Advocate. For Respondent : Shri Amit Chaudhari, Ms. Naushina Afrin Ali and Shri Topilal Bareth, Advocates. Hon'ble Shri P. R. Ramachandra Menon, Chief Justice Hon'ble Shri Justice Parth Prateem Sahu, Judge CAV Judgment Per P. R. Ramachandra Menon, Chief Justice 1. Dismissal of writ petition filed by Appellant/Assessee challenging approval granted in terms of Section 151 (1) of Income Tax Act, 1961 (for short, 'Act of 1961') to reopen assessment and to quash notice issued under Section 148 of Act of 1961 in this regard, after holding that statutory requirement has been complied with and accordingly relegating writ Petitioner to avail statutory remedy by way of appeal; more so since assessment proceedings had also been finalized in meanwhile, made Assessee/writ Petitioners to feel aggrieved and hence appeal. 2. Heard Shri Siddharth Dubey, learned counsel for Appellants as well as Ms. Naushina Afrin Ali, learned standing counsel for Respondent/Department at length. 3. When matter is taken up for consideration, maintainability of appeal was raised as first point to be considered, especially in light of relevant statutory provisions and as to satisfaction of procedural formalities. learned counsel for both sides addressed Court accordingly. To consider matter effectively, it will be necessary to have some idea as to factual sequence as well. 4. Writ Appeal No. 399 of 2019 arising from Writ Petition (T) No. 70 of 2018 is stated as lead case and parties and proceedings are referred to as given in said writ appeal/writ petition. 4 5. Appellant-Company is Assessee on rolls of Respondent/Department and scrutiny assessment for assessment year 2012-13 was completed under Section 143(3) of Act of 1961 on 08.01.2014. Four years later, notice of reassessment under Section 148 of Act of 1961 was issued to Appellant/Assessee on 07.02.2018. On receipt of said notice, Appellant/Assessee requested for furnishing reasons recorded under Section 148(2) of Act of 1961, by submitting application dated 22.02.2018 addressed to competent authority; which came to be supplied on 22.02.2018. application was submitted on 07.03.2018, to furnish approval/sanction accorded in terms of Section 151(1) of Act of 1961 which led to issuance of notice under Section 148(2) of Act of 1961. On receipt of reasons recorded for issuing notice under Section 148(2) of Act of 1961, it was sought to be objected by filing statement of objections on 22.03.2018. It is case of Appellant/Assessee that said objections were considered in quite mechanical manner and turned down on very same day, as per order dated 23.03.2018, with intent to proceed with further steps, which hence was sought to be challenged by filing writ petition before this Court. Similar nature of challenge is involved in connected cases as well. 6. Shri Siddharth Dubey, learned counsel for Appellants submits that reassessment proceedings have been initiated absolutely without any 'reason to believe' as to escape of any income from assessment. As per relevant provisions of law and binding judgments rendered by Apex Court and various High Courts on point, condition precedent should exist and be satisfied for reopening assessment, which is stated as lacking in instant case. It is also stated there is no nexus or basis for proceedings and no tangible material is there to hold that there was 'reason to believe' for initiating reassessment proceedings. 5 7. It is also case of Appellant/Assessee that all relevant materials had been furnished by Assessee and that there was no instance of any relevant fact, either whole or in part in respect of scrutiny assessment finalized on 08.01.2014; under which circumstances no reassessment proceedings could have been initiated or pursued merely on basis of conjunctures or surmises. learned counsel submits that each case has to be considered on basis of its merit with regard to satisfaction of statutory requirements which in instant case is conspicuously absent and hence various rulings rendered by Apex Court, as referred to by learned Single Judge while declining interference, are not applicable. 8. It cannot be held that no writ petition/appeal is maintainable, merely for reason that assessment had already been finalized. Support is sought to be drawn by Appellants from rulings rendered by Apex Court in Calcutta Discount Co. Ltd. vs. Income Tax Officer, Companies District I Calcutta & Another reported in AIR 1961 SC 372 and Khoday Distilleries Limited (now known as Khoday India Limited) & Another vs. Sri Mahadeshwara Sahakara Sakkare Karkhande Limited, Kollegal reported in (2019) 4 SCC 376 which reiterates law declared in Kunhayammed & Others vs. State of Kerala & Another reported in (2000) 6 SCC 359. learned counsel also sought to draw distinction from position considered and decided by co-ordinate Bench in Writ Appeal No. 293 of 2017. 9. Ms. Naushina Afrin Ali, learned standing counsel appearing for Respondent/Department submits that scrutiny assessment was finalized in terms of Section 143 of Act of 1961, based on return submitted by Appellant/Assessee. Later, in course of survey under Section 133A of Act of 1961, various incriminating materials were brought to light and statement of Assessee was taken. materials collected revealed that share transfers were done in respect of various shell companies and there was 6 conscious attempt of defrauding revenue because of escaped income from assessment. It was accordingly, that necessary proceedings were initiated and approval of competent authority, in terms of Section 151(1) of Act of 1961, was obtained. After getting approval as above, statutory notice was issued under Section 148(2) of Act of 1961 to Assessee. reasons recorded were furnished to Assessee on application. objections preferred were considered with proper application of mind and it was repelled accordingly. It was after analysis of facts and figures in light of relevant provisions of law and binding precedents, that reassessment was finalized. Instead of challenging reassessment by way of effective alternative remedy available under statute, Assessee simply rushed to this Court by filing writ petitions. learned Single Judge referred to sequence of events, relevant provisions of law and almost all relevant judgments on subject and recorded satisfaction on procedure followed. It was accordingly, that interference was declined and writ petitions were dismissed, setting Appellant/Assessee at liberty to file statutory appeals, if aggrieved, which is correct and proper in all respects. learned counsel submits that there is no violation of any principle of natural justice, nor proceedings are in violation of statutory provisions and no such instance, to contrary, has been demonstrated by Appellant/Assessee. 10. It is brought to notice of this Court by learned standing counsel for Respondents that dictum laid down by Constitution Bench of Apex Court in Calcutta Discount (supra) sought to be relied on by Appellants is not applicable to case in hand. It was also case which involved sale of shares, which, of course was disclosed in return, but notice of reassessment was issued to Assessee to show intention of sale and proceedings were pursued and finalized accordingly. Ultimately, matter ended up in Supreme Court, when it was observed that Assessee was 7 only to give actual particulars with regard to transaction to authorities and it was not necessary for disclosing intention for selling shares; which made Court to intervene and pass verdict in favour of Assessee. This does not come to rescue of Appellants. It is pointed out with respect to materials on record that procedural requirements as explained by Apex Court in GKN Driveshafts (India) Ltd. vs. Income Tax Officer & Others reported in (2003) 1 SCC 72 stand satisfied and that statutory appeal is appropriate remedy. 11. It is further pointed out that, some of similar issues as involved in present case were considered in case of Assessee by name Kamala Ojha vs. Income Tax Officer 1 & Others in SLP No. 38102 of 2019. notice and such other proceedings were subjected to challenge in writ petition and during pendency of writ petition, final assessment order was passed. learned Single Judge allowed main prayers which was subject matter of challenge in appeal preferred by Revenue (in Writ Appeal No. 293 of 2017). Division Bench held that course pursued by learned Single Judge was not correct and accordingly, judgment in writ petition was set aside and appeal preferred by Revenue was allowed in following terms: 33. To sum up matter, when there existed reason to belief which is formed on basis of material available having nexus with subject, writ Court ought not to have entertained writ petition more so when assessment order have already been passed during pendency of writ petition, therefore, we set aside order passed by writ Court and relegate writ petitioner to prefer appeal against reassessment order which may be filed within period of 30 days from today. writ petitioner would be at liberty to raise all grounds both factual and legal in said appeal. appellate authority shall entertain appeal for decision on merits without raising objection as to limitation. 8 Though Assessee took up matter by filing SLP before Apex Court, after condoning delay, SLP came to be dismissed; however, granting liberty to file statutory appeal within three weeks and to have it disposed off on merits. It is true that no principle of merger is attracted because of dismissal of SLP, but we find no reason to differ from view taken by Division Bench in writ appeal, with reference to course to be pursued. 12. When procedural requirements are satisfied, whether inference drawn is based on relevant materials or not is matter which may involve fact adjudication. This is not possible at hands of this Court, in exercise of jurisdiction under Article 226 of Constitution of India. In other words, nature of contentions raised by Appellant/Assessee is with regard to satisfaction of reasons for reopening assessment after four years. approval granted and reasons which made Income Tax Officer to believe that some income had escaped assessment have to be tested with regard to actual facts and figures. This comes within scope of alternative remedy by way of appeal and no prejudice can be stated as caused to Appellant/Assessee in this regard. To put it more clear, it is not case where mere question of law is involved; such as violation/non-satisfaction of particular provisions or as to lack of competency of authority who has passed order for proceeding further. Under similar circumstance, we have declined interference, without prejudice to pursue statutory remedy, as per judgment dated 29.07.2019 in Writ Appeal 336 of 2019, copy of which is placed for perusal from part of Respondents. 13. learned standing counsel for Respondent/Revenue submits that assessment proceedings were finalized in respect of 'five' different assessment years and hence five different writ petitions came to be filed by Appellants/Assessee. Among 'five', two writ petitions have already been 9 withdrawn and Assessees have chosen to avail statutory remedy. As it stands so, no differential treatment is warranted in respect of present appeals. 14. In above facts and circumstances, we hold that these appeals are not maintainable and accordingly they are dismissed. This is without prejudice to rights and liberties of Appellants/Assessee to move statutory authority by way of appeal in accordance with law. It is further made clear that, our discussion is only to extent of considering maintainability and no opinion is expressed with regard to merits involved. Sd/- Sd/- (P. R. Ramachandra Menon) (Parth Prateem Sahu) Chief Justice Judge Brijmohan Hariom Rice Mill Private Limited / Subhash Agrawal v. ACIT Circle-2(1), Bilaspur / Principal CIT, Bilaspur / ITO-2(1), Bilaspur / Income-tax Officer (Tech. & TPS-2), Bilaspur / Union of India