Amore Jewels Pvt. Ltd. vs Principal Commissioner of Income Tax-12, Mumbai

At the request of the counsel, this petition is being disposed of finally t the stage of admission.

This petition under Article 226 of the Constitution of India challenges a notice dated 31st March, 2015 issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961 (the ''Act''). The impugned notice seeks to re-open the Assessment for Assessment year 2008-09.

We had by our order dated 22nd June, 2016 directed the Assessing Officer to explain his conduct in having issued a notice dated 17th June, 2016 under Section 142(1) of the Act to the petitioner, in the face of the order dated 15th June, 2016 of this Court staying the impugned notice. Mr. Prathamesh Lawand, the Assessing Officer has filed an affidavit dated 24th June, 2016 pointing out that the notice dated 17th June, 2016 was sent by mistake and withdrawn by communication dated 21st June, 2016. The affidavit states that it was a genuine mistake and he tenders an unconditional apology for the same. We accept the same in the present facts. However, the officers of Revenue must be careful and ensure that the orders of this Court are followed in letter and spirit.

The petitioner has raised various contentions challenging the jurisdiction of the Assessing Officer, who issued the impugned notice including the date when impugned notice was issued and also with regard to sanction of the Commissioner of Income Tax. From the record we find that the impugned notice has been issued on 31st March, 2015 as is evidenced from the acknowledgment received by the Revenue from the postal authorities. The affidavit of the Revenue also annexes the postal acknowledgment card evidencing the dispatch on 31st March, 2015 and receipt of the impugned notice by the petitioner. Further, the petitioner themselves have admitted receipt of impugned notice on 31st March, 2015 at 7.39 p.m. We are satisfied that the impugned notice was issued on 31st March, 2016. The other objection urged is that the sanction from the Commissioner of Income Tax was obtained by DCIT-12(1)(2) and not by the Assessing Officer i.e. DCIT-12(1)(1). Thus it is submitted that the impugned notice is not issued on satisfaction of the Assessing Officer but at the instance of some other officer. We find that reasons in support of the impugned notice is signed by the Assessing Officer DCIT-12(1(1). The affidavit in reply points out that the mention of DCIT-12(1)(2) instead of DCIT-12(1)(1) was a typographical error. It does appear to be so. Therefore, both the above contentions urged by the petitioner would not result in the impugned notice being without jurisdiction.

However, the petitioner invited our attention to Section 92CA (2C) of the Act which read as under :

"92CA. Reference to Transfer Pricing Officer.

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(1) �. �. �.

(2) �. �. �.

(2A) �. �. �.

(2B) �. �. �.

(2C) Nothing contained in sub-section (2B) shall empower the Assessing Officer either to assess or reassess under section 147 or pass an order enhancing the liability of the assessee under Section 154, for any assessment year, proceedings for which have been completed before the 1st day of July, 2012.

In this case the petitioner points out that for the assessment year 2008-09 the regular Assessment under Section 143(3) of the Act was completed on 18th October, 2010. The sanction for the impugned notice is obtained on the transfer pricing adjustment as recorded in the reasons as follows :

"4. In view of the above I have reason to believe that issue of Rs. 1,80,00,000/- and transfer pricing adjustment has escaped assessment within the meaning of Section 147 of the Act. Therefore, a fit case to re-open being issue of notice under section 148 of the Income Tax Act, 1961".

Prima facie the sanction for re-opening the assessment of the Commissioner of Income Tax was also in respect of International transaction, which was a subject matter of assessment completed much prior to 1st day of July, 2012. Therefore, the impugned notice is hit by Sub-Section (2B) of Section 92CA of the Act. However, Mr. Pinto submits that this issue has not been canvassed by the assessee before the Assessing Officer while filing its objections. Therefore, they cannot raise this now but in the peculiar facts he does not oppose the issue of Section 92CA (2C) of the Act being agitated before the Assessing Officer.

As this objection goes to the root of matter, it would be appropriate that this objection of the petitioner be considered by the Assessing Officer and disposed of expeditiously. It is true that normally we would not let an assessee challenge a reopening notice before us on a ground not taken in the objections made to the Assessing Officer. However, on the face of it, it appears that the impugned notice is without jurisdiction. However, rather then admitting the petition and staying the notice in the peculiar facts, the Assessing Officer should have a chance to deal with it. In the above view at this stage, we are not disturbing the impugned notice or the order disposing of the objection and only directing the Assessing Officer to consider the petitioner''s objections in respect of Section 92CA (2C) of the Act.

It is made clear that in case the petitioner files its objections/representation with regard to Section 92CA (2C) of the Act within one week from today, the Assessing Officer will dispose of the same within a period of four weeks from the date the petitioner file its objections/representation only on the issue of Section 92CA (2C) of the Act. It is made clear that with regard to the other objections contended by the petitioner we are not inclined to entertain this petition.

However, in the peculiar facts of this case, we direct a stay of the impugned notice for further period of ten weeks from today. This would enable the petitioner to challenge the order disposing of the objection in respect of Section 92CA of the Act raised by the petitioner. This period of ten weeks has been provided taking into account decision of this Court in case of Asian Paints 296 ITR 90 which directs the Assessing Officer not to commence reassessment proceedings for a period of four weeks from the disposal of the objections.

Petition disposed of in above terms. No order as to costs.