M/S.SAHAYAMATHA SALTERNS V. THE DEPUTY COMMISSIONER OF

WP(MD)/1611/2017

AI Insights

The case involves M/s. Sahayamatha Salterns Pvt Limited, a company engaged in salt manufacturing, which filed a writ petition against the Deputy Commissioner of Income Tax, Circle-1, Tuticorin. The petition challenged an order under Section 153C of the Income Tax Act, 1961, which was issued following a search operation at the premises of another company, M/s. Diamond Sea Food Exports. The impugned order added additional income to the petitioner's declared income for the assessment year 2013-2014, which had already been assessed earlier. The court examined whether the reassessment under Section 153C was justified, given that there was no new escapement of income and the overall tax demand remained unchanged from the previous assessment.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 732900 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 25-03-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PARAMESHWARI
• Assessee Lawyers: G BASKAR
• Keywords: Double taxation; Income tax assessment; Scrutiny; Search and seizure; Writ of Certiorari; Additional Determination of Income
• Section: 143(3); 271(1)(c); 153C

Judgement Text

" W.P.(MD)No.1611 of 2017 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 25.03.2021 CORAM THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN W.P.(MD)No.1611 of 2017 and WMP(MD) No.1321 of 2017 M/s.Sahayamatha Salterns Pvt Limited, Rep by its Managing Director, Thiru.Michael Motha, Son of Thiru.John Motha, 13-A/1, Meenakshipuram West, Tuticorin – 628002. ...Petitioner Vs. The Deputy Commissioner of Income Tax, Circle – 1, No.19, W G C Road, Tuticorin. ...Respondent PRAYER: Writ petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, calling for the order in AACCS0545D dated 30.12.2016, on the file of the respondent relating to the A.Y.2013-2014 and quash the same. For Petitioner : Mr.G.Baskar For Respondents : Ms.Parameshwari for Mrs.S.Srimathy Standing Counsel O R D E R Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondent. 2.The petitioner is a company engaging in salt manufacturing. The case on hand pertains to the assessment year 2013-2014. The petitioner filed its e-return of income on 28.09.2013, admitting an income of Rs.66,77,810/-.The return of income was selected for scrutiny. The assessment order under Section 143(3) of the Income Tax Act, 1961 was passed on 28.03.2016 and the following additional determination of income was made:- “Total income returned Rs. 66,77,810 Add as discussed above Rs.4,41,65,300 Total income determined Rs.5,08,43,110 Demand/Refund Due (calculation sheet enclosed) Rs.1,98,76,300 This should be paid as per demand notice and challan enclosed. Penalty proceedings u/s 271 (1) (c) initiated separately.” 1/6 https://hcservices.ecourts.gov.in/hcservices/ W.P.(MD)No.1611 of 2017 3.Aggrieved by the said order, he has filed an appeal before the Appellate Authority and it is said to be still pending. In the meanwhile, the petitioner received a notice dated 28.11.2016 under Section 153C of the Income Tax Act. The issuance of the said notice was a fall out of the search of the premises of one M/s.Diamond Sea Food Exports (DSF Group). It appears that there was a sale transaction between the two parties. Based on the same, after issuing notice under Section 153C, the impugned order dated 30.12.2016 came to be passed. Questioning the same, the present Writ Petition has been filed. 4.The respondent filed a detailed counter affidavit. The learned Standing Counsel appearing for the respondent took me through the contents set out therein. The respondent has chosen to justify the initiation of the proceedings under Section 153C of the Act. It is also stated that there is no double taxation of the petitioner's income. The further objection is that the present Writ Petition cannot be entertained, because the petitioner is very much having liberty of filing an appeal before the Appellate Authority. 5.I have carefully gone through the rival contentions, materials available on record and the impugned order. In the impugned order, the following determination has been made. Total income returned Rs. 66,77,810 Add as discussed Rs.4,41,65,3 00 Total income Assessed Rs.5,08,43,1 10 Demand Payable Rs.2,01,42,5 50 6.As rightly pointed out by the learned counsel for the petitioner, a bare comparison of the Assessment order passed under Section 143(3) of the Income Act and the impugned order passed under Section 153C of the Income Tax Act would show that there is no escapement of the income, even according to the respondent. In fact, the Counter affidavit itself, it has been fairly conceded in paragraph 20 that there is no change in the demand amount and that the overall demand raised in respect of the assessee is Rs.2,01,42,550/- and that no further additional demand has been raised by the impugned order. If there is no escapement of income and the petitioner's income has already been determined in the earlier round, there is absolutely no justification in passing one more order under Section 153C of the Income Tax Act. Such an exercise is nothing but reiteration of the earlier order passed under Section 143(3) of the Income Tax Act. 2/6 https://hcservices.ecourts.gov.in/hcservices/ W.P.(MD)No.1611 of 2017 7.In this view of the matter, the impugned order is quashed. The Writ Petition is allowed. No costs. Consequently, connected Miscellaneous Petition is closed. Sd/- Assistant Registrar () // True Copy // / /2021 Sub Assistant Registrar(CS) Note: In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned. To The Deputy Commissioner of Income Tax, Circle – 1, No.19, W G C Road, Tuticorin. +1 CC to M/s.S.SRIMATHY, Advocate ( SR-13754[F] dated 25/03/2021 ) +1 CC to M/s.A.CHANDRASEKARAN, Advocate ( SR-13937[F] dated 26/03/2021 ) W.P.(MD)No.1611 of 2017 and WMP(MD) No.1321 of 2017 25.03.2021 Ak(12/05/2021) 3 P 4C 3/6 https://hcservices.ecourts.gov.in/hcservices/ "