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Cenveo Publisher Services India Ltd vs. UOI (Bombay High Court)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS:
COUNSEL: ,
DATE: February 1, 2019 (Date of pronouncement)
DATE: February 16, 2019 (Date of publication)
AY: 2011-12
FILE: Click here to download the file in pdf format
CITATION:
S. 147 Reopening: If the assessee delays filing objections to the reasons and leaves the AO with little time to dispose of the objections and pass the assessment order before it gets time barred, it destroys the formula provided in Asian Paints 296 ITR 90 (Bom) that the AO should not pass the assessment order for 4 weeks. A writ petition to challenge the reopening will not be entertained

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O.O.C.J.
WRIT PETITION NO. 284 OF 2019
Cenveo Publisher Services India Ltd. …Petitioner.
vs
Union of India & Ors. …Respondents
…..
Mr Bharat Raichandani a/w Ms Pragya Koolwal I/b UBR Legal for the
Petitioner.
Mr N.C.Mohanty for Respondent Nos.2 and 3.
…..
CORAM : AKIL KURESHI &
B.P.COLABAWALLA, JJ.
FEBRUARY 01, 2019.
P.C. :

The Petitioner has challenged the notice of reopening of
the assessment dated 31.3.2018, as at annexure “A” to the petition
and further an order dated 28.12.2018 passed by Respondent No.3-
Assessing Officer rejecting the Petitioner’s objections to the notice of
reopening. By the time this petition was filed, the Assessing Officer
had also passed the order of reassessment. The petitioner has,
therefore, challenged such an order of reassessment dated 29th
December, 2018.

2 This challenge arises in the following background. The
Petitioner is a company registered under the Companies Act. For the
Assessment Year 2011-12 the Petitioner had filed the return of
income declaring the total income of Rs.1.65 crores (rounded off).
Subsequently the Petitioner had revised the return declaring the
revised income of Rs.2.64 Criores (rounded off). The return of the
petitioner was taken in scrutiny by the Assessing Officer who passed
the order under Section 143(3) of the Income Tax Act, 1961 (“the
Act” for short) on 3.3.2015 accepting the Petitioner’s revised income.

3 To reopen such assessment, the Assessing Officer issued
the impugned notice. He had recorded the reasons for issuing the
notice. In response to the notice of reopening of the assessment, the
Petitioner filed return in April 2018 stating that the revised return
may be treated as the return in response to the notice. In such a
communication the Petitioner had also asked the Assessing Officer to
supply the reasons recorded for reopening the assessment. Such
reasons are supplied by the Assessing Officer to the Petitioner on
14.9.2018. The Petitioner thereupon filed Writ Petition No. 3534 of
2018 challenging the notice of reopening the assessment. This was,
at the request of the Petitioner was taken up for hearing by the Court
on 13th December, 2018. This Court noticed that the Petitioner had
approached the Court without raising objections before the Assessing
Officer. This was clearly in breach of the mechanism devised by the
Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs.
Income Tax Officer reported in 259 ITR 19 (SC). The petition was
disposed of in following terms.

“Learned counsel for the petitioner sought permission to
withdraw the petition leaving all contentions open to be
raised before the Assessing Officer either in form of
objections to the notice of re-opening or during the course
of re-assessment opposing the validity of the reassessment proceedings themselves. Permission as
prayed for granted. Needless to clarify that all other
contentions on merits are also kept open. Petition
disposed of accordingly.”

4 The Petitioner thereupon raised the objections before the
Assessing Officer to the notice of reopening of the assessment on
14.12.2018. Such objections were disposed of by the Assessing Officer
on 28.12.2018. Since the last date for framing the assessment was
fast approaching and the assessment would get time barred on 31st
December, 2018, the Assessing Officer passed the order of assessment
on 28.12.2018.

5 In such circumstances, the Petitioner has once again
approached the Court challenging very notice of reopening of the
assessment and also including the challenge to the order of reassessment as consequential to the main challenge to reopening of the
assessment.

6 At the outset we had called upon counsel for the Petitioner
to satisfy us why the petitioner should not be relegated to the
statutory appellate remedy. In response to the same, counsel for the
petitioner vehemently contended that the notice of reopening of the
assessment is based on the reasons which are not sustainable. He
submitted that the impugned notice has been issued beyond the
period of four years from the end of relevant assessment year without
there being any failure on the part of the assessee to disclose truly all
material facts. In that view of the matter, the counsel contended, that
the Assessing Officer would have no jurisdiction to reopen the
assessment. Such being the facts the Petitioner should not be
relegated to the alternative remedy. He further submitted that the
Assessing Officer consumed considerably long time in providing the
reasons for reopening the assessment. It is, therefore, that the
Petitioner could not challenge the notice earlier. The Petitioner
should not be penalized for delay on the part of the Assessing Officer
in supplying the reasons.

7 The learned counsel relied on following decisions;

(1) The Division Bench of this Court in the case of Aroni
Commercials Ltd. Vs. The Dy. Commissioner of
Income Tax-2(1) reported in 362 ITR 403 (Bom) in
which the Court examined the challenge of the Petitioner
to the very notice of reopening of the assessment though
assessment order was already passed.

(2) In case of Crompton Greaves Ltd. Vs Assistant
Commissioner of Income Tax reported in 275 CTR
(Bom) 49 in which the Division Bench of this Court once
again entertained the challenge of the Petitioner to the
notice of reopening of the assessment, even though by
the time the petition was filed, the order of the
assessment was passed.

8 In facts in the present case we are not inclined to
entertain this petition and we would relegate the petition to the
statutory remedy. This is so for the following reasons.

(i) We may recall the petitioner after being supplied the
reasons for reopening of the assessment by the Assessing Officer on
14.9.2018, approached this Court by filing the Writ Petition in
November, 2018, without first raising the objections before the
Assessing Officer. This was in clear breach of the procedure laid down
by Supreme Court in the case of GKN Driveshafts (supra). It is true
that in a given case the mechanism provided by the Supreme Court in
the case of GKN Driveshafts may be open to flexibility. However, the
petitioner – assessee cannot without any reason or explanation, at his
will choose to file the Writ Petition directly before the Court without
following the procedure set out in GKN Driveshafts (supra) i.e.
without first raising the objections before the Assessing Officer.

Allowing the assessee to do so without any explanation at all would
dismantle such mechanism. It was because of this that the Court had
previously refused to entertain his petition directly filed without
raising objections before the Assessing Officer. The Petitioner
thereupon withdrew the petition on 13th December, 2018 and filed the
objections before the Assessing Officer.

(2) The fact that in this case the petitioner raised objections
promptly after withdrawing the petition from this Court, would not in
any manner dilute the fact that it was on the ground of the
petitioner’s conduct that the Assessing Officer was left with little time
to dispose of his objections and thereafter complete the assessment
before it becomes time barred. We may record that this Court in the
case of Asian Paints Ltd. Vs. Dy. Comm. Of Income Tax & Ors.
reported in 296 ITR 90 Bom has provided that if the Assessing
Officer does not accept the objections of the assessee, he shall not
proceed further in the matter within a period of four weeks from the
date of receipt of said order of objections. The petitioner by its
conduct destroyed this formula provided by the Court in the case of
Asian Paints (supra), making it impossible for the assessing officer
to wait for four weeks after disposal of objections without running the
risk of allowing the assessment to be time barred.

(3) The Supreme Court in the case of Commissioner of
Income Tax Vs Chhabil Dass Agarwal reported in 357 ITR 357
(SC) has held that, ordinarily Writ Petition should not be entertained
when an alternative statutory remedy is available. As correctly
pointed out by the petitioner, it does not completely oust the writ
jurisdiction of the High Court under Article 226 of the Constitution of
India. Nevertheless the facts may emerge in a given case, where
despite availability of the jurisdiction, the Court may refuse to
exercise the same.

In a case where the order of the assessment is
passed, the jurisdiction of the Assessing Officer to pass such an order
on the basis of validity of reopening of the assessment would be one
part of the challenge. Another part would involve the challenge to the
assessment made by the Assessing Officer and would necessarily
entail examination of facts on record which the High Court would be
loath to do as a writ court.

Ordinarily, therefore, the Court would
insist that in such a situation the assessee should take appellate
route. Otherwise, the petitioner would argue the jurisdictional
question in the High Court and if he fails, would opt to challenge the
order on merits before the Appellate Authority, which would be most
convenient.

9 Before closing we may record that in a case where the
Petitioner is already before the Court and the order of the assessment
was passed thereafter may stand on entirely different footing.
Further in the present case by the self imposed restriction, we have
refused to entertain the petition since by not following the procedure
set out by the Supreme Court in the case of GKN Driveshafts (India)
Ltd.(supra), the petitioner has brought about a situation where the
Assessing Officer was left with short time to dispose of the objections
and complete the assessment. This element is clearly absent in the
judgments cited before us by the counsel for the petitioner.
10 In these circumstances, this petition is not entertained,
leaving it open to the petitioner to challenge the assessment order
before the Appellate Authority. If in the process, there has been some
delay, we are sure that the Appellate Authority shall consider the
same in view of the fact that the Petitioner was bona fide pursuing its
remedies before this Court. All contentions of the Petitioner are kept
open.
(B.P.COLABAWALLA, J.) (AKIL KURESHI, J. )

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