High Court Karnataka High Court

M/S Bemco Hydraulics Ltd vs Deputy Commissioner Of Income Tax on 20 September, 2008

Karnataka High Court
M/S Bemco Hydraulics Ltd vs Deputy Commissioner Of Income Tax on 20 September, 2008
Author: Anand Byrareddy
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

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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]