IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHARWAD
DATED THIS THE 20?}! DAY OF SEPFEMBF§R,2{i(}é A'
BEFORE'
THE HONBLE MR.JUS'I'ICE .€£:~;Ai=i:)" JiE3Y':I?A I§ E,DDY;.:"'~.fi 'i
wan' PETITION N¢~.. j_§_562[A.2007.[fi1"'f_I;i;j""'
BETWEEN:
M/s Bemco *
Udyambag, %
Bclgatflm. _V _'
Rcpresmltexi "
General --Managc1f--- ~ < é «'
S/0 Bapusaheb Patti},
Agefi about 58"ysars. ..Pctitioner
'V Senior Clounsel for Smt.Van;i H. Adv.)
1. Commissioner of
incpme Tax, Cixcked,
Beigaum.
_ " . 5Asst. Commissioner of
Income Tax, Circle-I,
Belgaum. ..Respondc3:1ts
(By Sri. K. V. Aravind for Sri.M.V. Scshachala, CGSC)
5
This writ petition is filed under Articles 226 and'??? of
the Constitution of India praying to quash the :1ot;i<:eT
section 148 dated 20.12.2006 issued by the reagxzndent in
1e-assess the income for the assessment year j€rizi_e" _
Annexure--C, and etc.
B~gmup, this day, the Court madezethei = ~
This mt petition coming onvftii'
The petition coming on in B-
grcrund is taken up forvfiiaal
«_ learned Senior Counsel
for Smt.'«ii;<.~1'_jiA~ Id, the petitioner and Sri.K. V.
appearing for Sri. MV. Scshachala,
'V fejspondcnt
are as follows:
A 'I'1_;e' is a Company carrying on business at
In mspcct of the assessment ywrs 1998-99, the
V."V'petii2:&}13ser had filed income Tax Returns with a nzport under
44«-AB ofthe Income Tax Act, 1961. The petitienefs
income as declared in the return was not accepted and
8
certain additions were made by way of prima facic
adjustments vide intimation dated 19.3.1999 fisued _}_;nder
section l43(1)(a) of the Income Tax Act, 1961.5'
petitioner being aggrieved by this intimation
before the Commissioner of Income 'A "
who by his order dated 4.9.2009
Aggricved by this, the pessoa{e;.e;c *
before the Income Tax Bench,
Panaji. The appeal' 'sf by order dated
27. 1 . Q 9' helsi fofiowsz
V' 'W': the fizvai submissions.
The mpresentafive for the
,5.251ssessee'is.V:eor1jz:*:ct in his submission that the
9 "the A0 in making adjustment
9.1:112;;i.cz'*' 143(1) does not extend to the
are of debatable nature or which
examination into factual or legal aspects
A sffiihc case. In the present case, the assesses
'T had credited a sum of Rs.6,67,361/- to the Profit
9 Gr. Loss Account on sale of building. It was
claimed by the assesses in 3 written note filed
along with the xetum of income that the
aforesaid entzy was made under a mistaken
3
impression. The said entry A'
subsequently reversed. The issue, 'M
1equmed' cxam1na' tion into the '-the
assessec. in our view, the édju{3maé3fit.xnade A'
the A0 is clearly outsidg: = of
143(1), if the A0 {o..
mater, he shank; havcAi%roi;awe4 rm;
prescribed by under
section 143(2). The made
under t}1cz§c2 foz=e, stand.
The _Ii}<f::paqt£nt;sfii'i§a:i"'é1uthofifies in
this set aside. mg
Assiéésg free to take such
gigfibn fie in Law to tsrin.s,..m
afofcsafii ;-to tax." (underlining for
--._.....-....-man-n-an-ua-u.u«
<':1:;;phasis) " "
the porfion underlined in the above
(flier, section 148 of the Act was issued on
for the assessment year 1998-99. In reply to the
k. thc petitioner hm filed objections to prim' anly'
that the respondent had no jmisdiction to issue the
hitiotice since the ‘l’ribuna1 has not given any findings or
directions as such. It was ftlrther urged that the
procflings under Section 150 of the Act wen: not callw for.
E
interim order by this court for stay of further proceedings.
The respondents have proceeded to complete
assessment and have also passed order of m–asseés1nen.t:’e’
Notwithstanding the same, the learned Senior
submit that the Income Tax Act, 1961}, iv e
of limitation in respect of the escaped asse$smen.t”ef
being brought to tax under 147 ef the
income Tax Act, 1961. to
take refuge, as aforesaid, of the
Tribune! to take such action
as may be the aforesaid amount to
tax, doesu nottéhaxxfe. the teafieét of extending the period of
the-re \eas'”no’ pmceeding in respect of
eueh nseesement The reading. of section 150 and
snb¥Seeiisnn 153 cannot be pressed into sexvice
Iespenctente in seeldng to contend that the proceedings
within time.
5{ The learned Senior Counsel would take this
. ‘ ” elaborately through the provzisionsto substantiate the
circumstances and it is further emphasised that it is not in
5
serious dispute, that in terms of Section 149 _
reassessment were barred by time. it is u
upon the observation of the iv e
deparment has proceeded as 8f01’&3as.8.i(i &’;;(‘l”‘
submit that the action is without ~ that
there is no direction the
period of limitationetood to
invoke the being taken
in under section
159 or _of Ificweme Act.
6. Cojn&a.,”‘V V Aravind, learned Counsel
_ for the “m_ej>endent~department, woum vehemently
direction is a clear indication that the
its have proceeded under section 143(2).
The ii.=a,p1;.@.:2«;:1:”<A)bse1va1:iQn made under section 143 oouki
_. , fflfitn be sustained and that it was open for the
to take appropriate action, which Wonk! clearly
that there was every liberty provided to the
iespondents to initiate appropriate action, which they have
done well within the time from the date of the order. Hence,
6
Secfion 150 of the Income Tax Act specifically _
such a situation. If there is no ‘_vfo”r«:the u
tenor of section 150 of the Income Act; .A
proceedings for re-assessment wéts«._}jve1l7wi_tf1in
limitation, there was no to
initiate such action. It 1ap§e-. time
enabling the respondents to wk’.-fion that the
observation is ‘V
7, ._ the assessment of
income «em: escaped assessment is in
relation to the ‘ of petitioner for a panic’ ‘ ular
_. .assess:znent~ year: ” proceedings under section 143(1)
to be bad’, does not preclude the
xeepo’ndent-;£iepan*tnxent from proceeding as directed by the
V anfi’t.fierefore, it can only be construed as direction
N K ‘take appropriate acfltwn, and further the respondents
re-assessment pmceedings there is no
Vt for interference by this Court. The xemedy of the
” ” petitioner is, to take recourse to the pmvisbns for appeal
under the Income Tax Act and the present proceedings are
3
an abuse of process of the court and hence be A’
with costs.
8. Having given my if
rival contentions, from a bf fl1:=._ %
Appellate ‘I’ribunal, whichjs qu9tcd 3}crei;:1
be said that the there is 4 to enable
the respondents ‘tiic impuwed
notice. The contraxy is
fialacious xm; gs at the outset is
without p s said to
have been
the pefion is allowed.
all consequent proceedings are held
are quashed.
Si’-1/F:
Iud§3
” Sub]