TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 31
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...., 2150, 2151, 2152, 2153, 2154, 2155, 2156, 2157, 2158, 2160, 2162, 2163 and 2164 of 2020 Honourable Mr.Justice Mohammed Shaffiq For the Petitioner : Mr.ARL.Sundaresan, Senior Counsel for Mr.C.T.Murugappan For the Respondents : Mr.N.Dilipkumar Senior Standing Counsel COMMON ORDER This is a batch of sixty-one (61) writ petitions of which two writ petitions are filed by the Petitioner Trust while the remaining fifty-nine (59) writ petitions are filed by the Trustees. The Petitioner/ Trust has filed W.P.(MD).Nos.1156 and 1158 of 2020 challenging the rejection of objections filed by the petitioner/ Trust vide proceedings dated 19.12.2019 in response to the notices dated 29.03.2019 under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the assessment years 2012-13 and 2013-14 respectively, whereas the Petitioners/ Trustees in other writ petitions have filed the remaining writ petitions challenging the orders of assessment under Section 143(3) of the Act read with Section 147 of the Act vide order dated 16.10.2019, 13.12.2019, 16.12.2019, 17.12.2019 and 30.12.2019. 2. I intend to deal with the writ petitions filed by the Trustees first. It is submi....
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....tion of India, when parallel remedies are pursued. In this regard, it may be relevant to refer to the following Judgments: (a) Jai Singh v. Union of India, (1977) 1 SCC 1: "4. In our opinion, the appellant cannot pursue two parallel remedies in respect of the same matter at the same time." (b) A Division Bench of this Court in 2021 SCCOnline Mad 10612 in W.A. 2246 of 2021 dated 7.6.21 in the case of Babu Amarnath held as under: "4. The submission made by the learned senior counsel for the appellant cannot be accepted, as having accepted the order of the learned Single Judge, even though writ appeal has been filed, he has given a representation to the Appellate Authority. He cannot be permitted to ride two horses at the same time one by approaching the Appellate Authority for reduction in punishment and keep the matter pending and another by filing the present writ appeal contending that enquiry held to be incorrect, the matter shall go back to the Enquiry Officer for the purpose of proceeding afresh that is to set the clock back prior to the Disciplinary Authority order." (c) Deeksha Suri v. Income-tax Appellate Tribunal , 1997 SCC OnLine Del 861: "43. We cannot resist ....
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....lyTechnic College. The Petitioner/ Trust was granted registration under Section 12AA of the Income Tax Act, 1961, from the assessment year 2011-2012 vide order of the Commissioner of Income Tax 1, Trichy in No.6162E(30)/2011-12/CIT-1/TRY dated 14.02.2012 and approval under Section 80G (5)(vi) of the Act vide order in No 6162E (34) 2011-12/CIT-1/TRY dated 14.02.2012. ii) All the 32 Trustees collectively purchased land to an extent of 17.99 Acres vide four Sale Deeds dated 09.03.2011 in their individual names during the financial year 2010-11, against a total consideration of Rs.2.60 Crores. The extent of land purchased by each trustee may not be uniform. The Trustees transferred the land to an extent of 5.02 acres out of 17.99 acres of land in favour of the Trust for a sale consideration of Rs 4.07 Lakhs. iii) The Polytechnic College building was constructed in the said 5.02 acres of land. The construction activity was spread over three years. iv) On 23.01.2013, a survey was conducted by the 2nd Respondent at the premises of the Petitioner /Trust under Section 133A of the Act. During the Survey, the 2nd Respondent recorded statement on oath, impounded documents and some loose she....
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....t construction is Rs.17,02,16,000/-. If this is proportionately bifurcated for both the financial years the cost would be Rs.4,99,92439/- for the Financial Year 2011-12 and the cost would be Rs.12,02,23,561/- for the Financial Year 2012-13 based upon the cost of construction admitted by the Assessee trust which is at 29.37% and 70.63%. As the proportionate value of the building for the A.Y.2013-14 has to assessed to tax in this AY.2013-14 works out to Rs.8,24,50,872/-, I have a reason to believe that income has escaped assessment within the meaning of sec.147 of the IT Act, 1961. It is evident from the above facts that the assessee had not truly and fully disclosed material facts necessary for his assessment for the year under consideration thereby necessitating reopening u/s 147 of the Act as all the material facts necessary for assessment have not been made as there is mismatch in the value of building as accounted in the balance sheet and valuation report. Accordingly, attracting provisions of Explanation 1 of section 147 of the Act." 7. In response, the Petitioner/ Trust filed its objection dated 12.12.2019 which is extracted below: "With reference to the above, we have ....
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.... been dealt with during the original assessment and appropriately taxed. Further treating Rs.68.21.779/- (proportionate value 5.02 Acres) without any basis and evidence as unexplained income of the trust under the purview of reassessment again is an exercise for double taxation of an income as the trustees have been taxed earlier. None of the reasons which formed the basis for issuing notice is based on facts and this authority had acted on assumptions and believed it to be true We humbly submit that going through the reasons provided by this authority it evokes doubt whether proper sanction was ever accorded to this notice by the concerned higher authorities. As the reasons provided lack proper basis this reopening lack jurisdiction and we request this authority to drop the proceedings. ii) Basis for forming the reasons to believe is not provided, making the allegations a mere assumption and reopening for making roving enquiries: The reasons provided by this authority alleges that there are unexplained investment and undisclosed income by the trust. Apart from this, this authority has not given any basis or furnished details of the materials for forming the belief. It is est....
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..... Now, after four years without any valid reasons to believe notice was issued u/s.148 assuming arbitrary powers to reopen the case merely on change of opinion on the basis of same facts and circumstances which were already considered by this authority during the original proceedings. This tantamount to revision of its own order which is elsewhere provided in the act. The reasons provided by this authority also does not mention any fresh material to suggest that the assessee trust had fully failed to disclose the facts. Reopening after four years can be resorted to only when the assessee is at fault and not when the income tax authorities are at fault. Reopening after four years based on reappraisal of existing material is invalid. Techspan India (p)Ltd. Vs. ITO 92 Taxmann.com 361 (SC) (2018).In a situation where according to Assessing Officer he failed to apply his mind to relevant material in making assessment order, he cannot take advantage of his own wrong and reopen assessment by taking recourse to provisions of section 147 Asian Paints Ltd. v. Dy. CIT (2009) 308 ITR 195. v) Extended period beyond four years under first proviso to sec. 147 necessarily mandates that there m....
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....notice and the proceedings suffer from irreparable flaws and proper sanction could not have been obtained or a satisfaction is received in a mechanical manner by the approving authority without application of mind. We would like to request your good self to kindly provide me with the satisfaction note recorded by CIT (Exemptions) as claimed by this authority in the notice u/s 148. Based on the above-mentioned objections, wemost humbly submit that the notice u/s 148 is not in order and request this authority to drop the consequential proceedings." The above objections of the Petitioner/ Trust was rejected by the Respondents vide impugned order dated 19.12.2019. It is this order rejecting the petitioner's objection which is under challenge in the two writ petitions viz., W.P.(MD).Nos.1156 and 1158 of 2020 filed by the Petitioner/Trust. 8. Against the above background, I shall proceed to examine the grounds/issues raised in the two writ petitions filed by the Petitioner/Trust: 8.1. Case of the Petitioners: In short, the case of the petitioners is the following: a. That though the Trustees had purchased land to an extent of 17.99 acres against a consideration of Rs.2,60,50....
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....rary, the learned Senior Standing Counsel for the Respondents resisted the same on the premise that the writ petition itself cannot be entertained for the following reasons: a. That the writ petition challenging the rejection of the objections to re-opening of assessment is pre-mature. b. The submission that the re-assessment proceedings is based on change of opinion, cannot be sustained inasmuch as the order of assessment dated 22.01.2016 does not indicate application of mind to the aspect of undervaluation of land purchased by the Trustee to the extent of 5.02 acres nor the source of the cost of construction. In other words, there was never a formation of any opinion in the first place in respect of undervaluation of land and source of funds for construction of the building for the initiation of re-assessment to be bad for want of jurisdiction on the ground of being a change of opinion. c. Assuming that the survey was illegal, it is submitted by the Learned Senior Standing Counsel for the Respondents that it cannot be a reason for the Respondents being barred from using the material gathered / collected during the course of an illegal survey. d. In response to the submiss....
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....issued calling for details and production of books of account. In response to the notices, Shri. R. Subramanian,CA, A/R appeared from time to time and furnished the books of account, necessary details which were carefully examined. 3. Perusal of the trust deed reveals the following objects - To carry out all social and community service activities and charitable activities wide enough for the benefit there of irrespective of caste, creed, color, community, religion and for relief of poor, advancement of education provision of medical and advancement of any object of general and/or public utility decided to be executed by the Trust. 4. It is observed that the trust is running Polytechnic college by name "Kongu Hi-Tek Polytecnic College" at Karur. Sources of funds for carrying out the stated activities are derived by way of Fees collected from the students and Voluntary contribution. 5. The financial statements filed along with the return of income for the AY 2013-14 has been examined. The assessee trust has admitted Rs. 4,17,50,000/- as corpus donation receipts. The assessee has submitted the necessary detalls of the donors. It is observed that the assessee trust has admitted ....
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....sment to assume jurisdiction. 11. While it is trite law that reassessment cannot be on the basis of mere change of opinion as held by the Supreme Court in Kelvinator reported in 320 ITR 561 (SC) and the other judgments relied upon by the Petitioner. Whether there is change of opinion or otherwise could either be apparent on the face of the record or may require an investigation of facts to arrive at the said conclusion [M/s.Durr India Private Limited vs. Assistant Commissioner of Income Tax and another in W.A.Nos.1081 and 1083 of 2021 dated 29.08.2022.]. The present case falls under the latter category and to decide the issue viz., whether the assessment is on the basis of change of opinion, a close scrutiny of documents and books of accounts is necessary. The above aspect viz., reassessment is bad as having been made on change of opinion, may require investigation into facts in the present case. Therefore, it is only appropriate for the appellant to participate in the proceedings before the statutory authorities. Similarly, whether there is escapement of turnover is again a question of fact which ought to be decided by the statutory authorities on appreciation of evidence. 12. Y....
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....rises v. Joint Commissioner (CT) (2019 SCC OnLine Mad 35177) (Madras High Court) 14.1. Finally, the cost of construction which is stated to be more than Rs.17 crores on the basis of a valuation report is sought to be explained by the Petitioner /Trust that the source is from corpus donation receipts and fees collected from the students. It is submitted by the learned Senior Standing Counsel for the Respondents that the construction of the building itself was over only in year 2013-14, thus the explanation offered by the Trust that the fees were collected from the students and utilised for construction is factually incorrect and false. The above aspect is a disputed question of fact and it may not be appropriate to examine such disputed questions of fact in a writ petition, as the same is beyond the realm of judicial review. In this regard, it may be useful to refer to the following judgments, wherein it was held : (i) State Bank of Travancore v. Mathew K.C., reported in (2018) 3 SCC 85: ''10. In United Bank of India v. Satyawati Tondon (2010) 8 SCC 110, the High Court had restrained Satyawati Tondon v. State of U.P., [2009 scc OnLine All 2608] further proceedings under....
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.... without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up." (emphasis supplied) (iii) Assistant Collector of Central Excise vs.Dunlop India Ltd. , reported in (1985) 1 SCC 260 : ''3. In Titaghur Paper Mills Co. Ltd. v. State of Orissa [(1983) 2 SCC 433, it was held that where the statute itself provided the....