W.P.Nos.16217 to 16219 of 2016 IN HIGH COURT OF JUDICATURE AT MADRAS Reserved On 27.02.2020 Pronounced On 09.03.2020 CORAM HON'BLE MR.JUSTICE C.SARAVANAN W.P.Nos.16217 to 16219 of 2016 and W.M.P.Nos.14001 to 14003 of 2016 Principal Officer, M/s. RR Donnelley India Outsource Private Limited, (Formerly known as Astron Document Management Private Limited), Rep. by its Jyothi Prosad Bose, Director, Son of Utsama Prosad Bose, 43A, Astron House, 1st Main Road, R Puram, Chennai 600 028. ... Petitioner in All W.Ps. Vs. Deputy Commissioner of Income Tax, Corporate Circle 5 (2), 121, Nungambakkam High Road, Chennai 600 034. ...Respondent in All W.Ps. Writ Petitions filed under Article 226 of Constitution of India praying to issue Writ of Certiorari, to call for records i http://www.judis.nic.in Page No 1 of 11 W.P.Nos.16217 to 16219 of 2016 PAN:AABCH1990A dated 23.03.2016 relating to Assessment Years 2003-04, 2004-05 and 2005-06 on file of respondent and quash same. For Petitioner : Mr.N.V.Balaji in all W.Ps For Respondent : M/s.Hema Muralikrishnan Standing Counsel, in all W.Ps. COMMON ORDER In these Writ Petitions, petitioner has challenged impugned notices all dated 23.03.2016 issued under Section 148 of Income Tax Act, 1961 seeking to reopen assessment for Assessment Years 2003-04, 2004-05 and 2005-06. 2. It is cases of petitioner that assessment for these three Assessment Years, petitioner had failed to deduct TDS under Chapter XVII-B of Income Tax Act, 1961 and had therefore voluntarily added same to taxable turnover and claimed deduction under Section 10B of Income Tax Act, 1961 applicable to newly established 100% Export Oriented undertaking. ____________ http://www.judis.nic.in Page No 2 of 11 W.P.Nos.16217 to 16219 of 2016 3. During Assessment Year 2006-07, petitioner voluntarily paid TDS and claimed deduction under Section 40(a)(ia) of Income Tax Act, 1961. On aforesaid amount, petitioner wanted to claim expenditure. Assessing Officer had disallowed same. 4. Commissioner of Income Tax (Appeals) by order dated 31.8.2012 directed Assessing Officer to recompute profit from business eligible for deduction under Section 10B(4) for earlier years by not increasing profit due to disallowance under Section 40(a)(ia) of Income Tax Act, 1961. 5. Aggrieved by aforesaid order dated 31.08.2012 of Commissioner of Income Tax (Appeals), petitioner preferred appeal before Income Tax Appellate Tribunal. 6. Income Tax Appellate Tribunal by its order dated 24.08.2015 upheld aforesaid order of Commissioner of Income Tax (Appeals). ____________ http://www.judis.nic.in Page No 3 of 11 W.P.Nos.16217 to 16219 of 2016 7. Income Tax Appellate Tribunal while upholding order of Commissioner of Income Tax (Appeals) however held that order directing computation of deduction under Section 10B will be subject to limitations provided under Income Tax Act, 1961. 8. It is contention of petitioner that order dated 31.08.2012 of Commissioner of Income Tax (Appeals) had merged with order dated 24.08.2015 of Income Tax Appellate Tribunal and therefore it was not open for respondent to invoke Section 148 in light of Section 150(2) of Income Tax Act, 1961. 9. In this connection learned counsel for petitioner relied on following decisions:- i. Goldmine Investments Vs. Deputy Commissioner of Income Tax, order of this Court in Tax Case (Appeal) No.215 of 2008 and W.A.No.2108 of 2010 and T.C.(A) Nos. 448 and 452 of 2013, dated 29.11.2013. ____________ http://www.judis.nic.in Page No 4 of 11 W.P.Nos.16217 to 16219 of 2016 ii. K.M.Sharma Vs. Income Tax Officer, (2002) 4 SCC 339. iii. Union of India and Others Vs. Kamlakshi Finanace Corporation, AIR 1992 SC 711. iv. Commissioner of Income Tax Vs. G.Viswanatham, (1988) 172 ITR 401. v. Parveen Kumari and another Vs. Commissioner of Income-Tax and another, (1999) 237 ITR 339. vi. Commissioner of Income Tax Vs. Vaikundom Rubber Co. Ltd., (2001) 249 ITR 19. vii.Spences Hotels Pvt. Ltd. Vs. Deputy Commissioner of Income Tax, (2003) 263 ITR 263. viii.Col. Sir Harinder Singh Brar Vs. Income Tax Officer, (2006) 282 ITR 371 (P&H). ix. Commissioner of Income Tax Vs. Gem Plus Jewellery India Ltd., 2010 SCC OnLine Bom 2068. x. Kunhayammed Vs. State of Kerala, (2000) 6 SCC 359. xi. Commissioner of Income Tax Vs. Amritlal Bhogilal & Co., (1985) 34 ITR 130 (SC). xii.Somnath Sahu Vs. State of Orissa and Others, (1969) 3 SCC 384. xiii.Gojer Bros. Pvt. Ltd. Vs. Ratan Lal Singh, ____________ http://www.judis.nic.in Page No 5 of 11 W.P.Nos.16217 to 16219 of 2016 (1974) 2 SCC 453. 10. It is contention of learned counsel for petitioner that last date for reopening assessment, within normal period of limitation, expired on 31st of March, 2008, 2009 and 2010 receptively for respective Assessment Years. 11. Likewise, last date for reopening assessment for purpose of 1st proviso to Section 147 of Income Tax Act, 1961 expired on 31st March, 2010, 2011 and 2012 respectively and therefore invocation of Section 148 was barred under Section 154(2) of Income Tax Act, 1961. 12. Per contra, learned counsel for respondent would submit that limitation is protected under Section 153 of Income Tax Act, 1961 to reopen assessment under Section 148 to give effect to order of Tribunal and that of Commissioner of Income Tax (Appeals). ____________ http://www.judis.nic.in Page No 6 of 11 W.P.Nos.16217 to 16219 of 2016 13. It is submitted that in any event, it is open for petitioner to make submissions before respondent Assessing Officer and if petitioner has valid case, certainly proceedings would be dropped. 14. It is submitted that respondent could not implement order dated 31.08.2015 of Commissioner of Income Tax (Appeals) as both petitioner and respondent had preferred their respective appeals before Income Tax Appellate Tribunal in I.T.A.No.2049/Mds./2012 and I.T.A.No.2064/Mds/2012 against order dated 31.08.2012 of Commissioner of Income Tax (Appeals). 15. I have considered arguments advanced on behalf of petitioner and respondent. 16. question that is required to be answered in present writ petitions is whether reopening of assessment for three Assessment Years would get time-barred in view of order of Income Tax Appellate Tribunal on 24.08.2015 or whether order ____________ http://www.judis.nic.in Page No 7 of 11 W.P.Nos.16217 to 16219 of 2016 disposing two appeals of petitioner and respondent had no bearing on limitation. 17. arguments advanced by learned counsel for petitioner that order of Commissioner of Income Tax (Appeals) dated 31.08.2012 had merged with order dated 24.08.2019 passed by Appellate Tribunal. However, merely because, said order of Commissioner of Income Tax (Appeals) had merged with order of Tribunal does not mean with order of Commissioner of Income Tax (Appeals) could not be implemented and that there was bar for re- opening Assessment under Section 150(2) of Income Tax Act, 1961. 18. As per sub-section 1 of Section 150 of Income Tax Act, 1961, notice under Section 148 of Income Tax Act, 1961, can be issued notwithstanding anything contained in Section 149 of Act for purpose of making assessment or re-assessment or recomputation in consequence of or to give effect to any finding or direction contained in ____________ http://www.judis.nic.in Page No 8 of 11 W.P.Nos.16217 to 16219 of 2016 order passed by any authority in any proceeding under Act by way of appeal, reference or revision or by court in any proceeding under any other law. 19. Sub-Section 1 of Section 150 of Income Tax Act, 1961 will not apply only where any assessment, re-assessment or recomputation in respect of which assessment, re-assessment or recomputation could not have been made at time order which was subject matter of appeal, reference or revision, as case may be, was made by reason any other provision limiting time within which any action for assessment, reassessment or recomputation could have been made. 20. In other words, limitation under sub-Section 2 to Section 150 will apply only when limitation had already expired by time before assessment order for Assessment Year 2006-07 was made. If not, there is saving of limitation under Section 150(1) of Income Tax Act, 1961. It is for this reason, Income Tax Appellate Tribunal vide order dated 24.08.2015 held that such recomputation will be subject to limitation. ____________ http://www.judis.nic.in Page No 9 of 11 W.P.Nos.16217 to 16219 of 2016 21. I therefore do not find any merits in present Writ Petitions. petitioner is directed to participate in proceedings before respondent. Since dispute pertains to Assessment Years 2003-04 to 2005-06, petitioner is directed to file objections/ representations, if any, within period of thirty days from date of receipt of copy of this order. respondent is directed to pass appropriate orders after considering such objections / representations, within period of three months from date of receipt of copy of this order. 22. All Writ Petitions are dismissed. No cost. Consequently, connected Miscellaneous Petitions are closed. 09.03.2020 Internet :Yes/No jen To Deputy Commissioner of Income Tax, Corporate Circle 5 (2),121, Nungambakkam High Road, Chennai 600034. http://www.judis.nic.in Page No 10 of 11 W.P.Nos.16217 to 16219 of 2016 C.SARAVANAN, J. jen Pre-Delivery Common Order in W.P.Nos.16217 to 16219 of 2016 and W.M.P.Nos.14001 to 14003 of 2016 09.03.2020 http://www.judis.nic.in Page No 11 of 11 Principal Officer, RR Donnelley India Outsource Private Limited, (Formerly known as Astron Document Management Private Limited) v. Deputy Commissioner of Income-tax, Corporate Circle-5(2), Chennai