IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 18.01.2010 Coram : THE HONOURABLE MR.JUSTICE D.MURUGESAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Writ Appeal Nos.419 to 423 of 2000 M/s Revathi- C.P.Equipment Ltd., Pollachi Road, Malumichampatti, Coimbatore. Rep. by its Managing Director R.K.Raghavendra .... Appellant in all WAs v. 1. The Deputy Commissioner of Income Tax, Special Range-II, Income Tax Office Building, Race Course Road, Coimbatore-641 018. 2. The Commissioner of Income-tax(Appeals), Income Tax Office Building, Race Course Road, Coimbatore-641 018. 3. The Inspecting Assistant Commissioner of Income -Tax (Assessment), Range-II, Income-tax Office Building, Race Course Road, Coimbatore-641 018. Respondents in all WAs. Writ Appeals filed Clause 15 of Letters Patent against the common order passed in W.P.Nos.11394 to 11398 of 1992 dated 23.10.1998. Petitions presented to this court under article 226 of the constitution of India to issue writs of certiorari calling for the records in P.A.No.47-023-CV-3183/SR-II/CBE, dated 19.6.92 relating to the Assessment Years 1. 1983-84 (WP 11394/1992) 2. 1985-86 (WP 11395/1992) 3. 1986-87 (WP 11396/1992) 4. 1987-88 (WP 11397/1992) and 5. 1988-89 (WP 11398/1992) respectively on the file of the first respondent and quash the same. For appellants in : Mr.V.Ramachandran, Senior Counsel all Appeals for M/s.Anita Sumanth https://hcservices.ecourts.gov.in/hcservices/ For respondents : Mr.T.Ravikumar in all Appeals COMMON JUDGMENT (Judgment of the Court was delivered by D.MURUGESAN,J.) The writ appeals are filed questioning the order dismissing the writ petitions filed by the appellants. In all the writ appeals a common question is raised for consideration and it pertains to the assessment years 1983-1984, 1985-1986, 1986-1987, 1987-1988 and 1988- 1989. In all the appeals, the appellant is one and the same person. The appellant is the manufacturer of water well drilling rigs, blast hold etc. For the above assessment years, the appellant was granted deduction under Section 80-I of the Income Tax Act, 1961 by the assessing officer in respect of assessment years. The difficulty arose when the same claim of deduction came to be considered by the officer concerned for the assessment year 1989-1990 and the same was not allowed. Based on the said finding, the earlier assessments were sought to be reopened by issuing notices dated 19.06.1992 under Section 148 of the Act. There is no dispute that the notices are only show cause notices calling the appellant to deliver within 30 days from the date of the service of the notice, a return in the prescribed form of the income in respect of which the appellant are assessable for the respective assessment years. 2. These notices were questioned by the appellant by separate writ petitions. It appears that the main challenge to the above show cause notices is on the basis of proviso to Section 147 of the Act. By that provision, no action shall be taken under section 147 after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Sub Section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts necessary for the assessment, for that assessment year. The learned Judge having noticed that the impugned show cause notices were issued admittedly after a period of four years, held against the appellant on facts. The common order is put in issue in these appeals. 3. We have heard Mr.V.Ramachandran, Senior Counsel appearing for the appellant and Mr.T.Ravikumar, learned counsel for the revenue. 4. Admittedly, the notices, which were questioned in the writ petitions, are only show cause notices. Whatever the grievance that may be available to the appellant viz., assessee, against those notices could be put forth by filing returns in the prescribed format and allow the assessing officer to consider those objections. Show cause notices can be questioned only on the ground of want of https://hcservices.ecourts.gov.in/hcservices/ jurisdiction. Having accepted that such show cause notices could be issued even after four years on the ground that the assessee had not disclosed fully and truly all material facts for the assessment years, this Court should have left the matter for adjudication by the assessing officer concerned on merits and for the said purpose, the proper course that could be adopted is after dismissing petitions, liberty may be given to the assessee to go before the assessing officer. 5. Mr.V.Ramachandran, learned Senior Counsel for the appellant would submit that inasmuch as the stand taken by the assessee had been accepted by the assessing officer for the assessment years 1983 to 1989 (except the assessment year 1984-1985), the assessing officer, for the assessment year 1989-1990 alone, had taken a different stand and consequently did not allow the deduction. That order was finally taken on appeal before the Tribunal, which has held in favour of the assessee. He would also submit that in any case, as on today, no final assessment orders have been made as per the instructions from his client and thereby, no such order can be passed in terms of Section 153 of the Act, which relates to time limit for completion of assessment and re-assessments. 6. On the other hand, Mr.T.Ravi Kumar, learned counsel appearing for the revenue would submit that insofar as the order of the Tribunal in respect of the assessment years 1989-1990, he had no instructions. As far as the limitation is concerned, in the wake of the provisions of Section 149-B of the Act, it may even be six years on the facts of particular case. Nevertheless, the proceedings that were questioned in the writ petitions, being show cause notices, the assessee should have approached the concerned assessment officer in compliance of those notices with all those objections that are available with the assessee. The writ petition against a show cause notice is normally not entertained unless for want of jurisdiction. 7. We have carefully considered the above submissions. As far as the limitation aspect is concerned, though the learned Judge has accepted the case of the assessee/appellant that the notices have been issued beyond the period of four years, which notices could not have been issued in view of the proviso to Section 147 of the Act, has gone further into the merits of the case and has decided the same without there being any opportunity to the assessee, that too, on the basis of the explanation offered by the revenue by way of counter affidavit. In our opinion when once the show cause notices are questioned, it would only be proper for this Court to reject the challenge unless it is questioned on the ground of jurisdiction and leave the matter to the authorities concerned to decide on merits. Hence, we are not expressing any opinion on any of the submissions made by the assessee as well as the revenue and we are inclined to dismiss the writ petitions on the ground that those writ petitions were filed questioning the show cause notices. Equally we are also https://hcservices.ecourts.gov.in/hcservices/ inclined to set aside the findings in the writ petitions rendered on merits of the case, as the assessee/appellant should have been given an opportunity to go before the authorities with all available objections pursuant to the show cause notices. 8. In view of the above finding, we allow the writ appeals and set aside the findings rendered by the learned Judge on merits and remit the matter to the authorities concerned to enable the assessee to file returns as required under the show cause notices impugned in the writ petitions dated 19.06.1992. The assessee is entitled to raise all the objections available, particularly, in respect of the findings of the assessing officer on earlier proceedings as well as the order of the Tribunal, which were passed in favour of the assessee in respect of the assessment year 1989-1990. However, we make it clear that such exercise is available to the assessing officer only in the event of the assessment orders having been passed in time and, as contended by the learned counsel for the appellant, if no assessment order has been passed in terms of Section 153, further exercise cannot be taken as it would be beyond the period of limitation under Section 153 of the Act. In any case, the objections shall be considered strictly in accordance with law and without prejudice to the rights of both the appellant and the revenue. 9. With the above observations all the writ appeals are allowed. No costs. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. raa 1. The Deputy Commissioner of Income Tax, Special Range-II, Income Tax Office Building,Race Course Road, Coimbatore-641 018. 2. The Commissioner of Income-tax(Appeals), Income Tax Office Building, Race Course Road, Coimbatore-641 018. https://hcservices.ecourts.gov.in/hcservices/ 3. The Inspecting Assistant Commissioner of Income -Tax (Assessment), Range-II, Income-tax Office Building, Race Course Road, Coimbatore-641 018. + 1 cc to M/s. Dr.Anita Sumanth, Advocate Sr 2868 + 1 cc to Mr.J.Naresh Kumar, Sr. Standing Counsel for I.T.Cases 2898 W.A.Nos.419 to 423 of 2000 KG (CO) RH (18.2.10) https://hcservices.ecourts.gov.in/hcservices/