Mavis Satcom Ltd. v. Deputy Commissioner Of Income-Tax

The Judgment of the Court was delivered by

T. Raja, J.:— The petitioner has filed these writ petitions challenging the notices issued to M/s. Mavis Satcom Ltd., represented by its managing director, Mrs. Prabha Sivakumar, 48, NP, Jawaharlal Nehru Salai, Ekkattu-thangal, Chennai-600032 seeking certiorari and other appropriate writ, direction or order calling for the records in PAN : AACCM2127K dated November 6, 2009, and November 4, 2009, on the file of the respondent pursuant to the notice dated December 19, 2008, and December 5, 2008, relating to the assessment years 2003–04 and 2004–05 and quash the same.

2. The petitioner is a registered company under the provisions of the Indian Companies Act and carrying on the business of operating a television network.

3. Being an assessee on the file of the respondent, the Deputy Commissioner of Income-tax, the petitioner has been maintaining the regular books of account by filing returns of income regularly. In respect of the year 2003–04, the return was filed by the petitioner declaring annual income. After processing the income, the Income-tax Department accepted the same pursuant to the issue of a prima facie intimation dated November 18, 2004. Thereafter, the return of income was selected in scrutiny proceedings and statutory notices under section 143(2) were issued. The petitioner appeared before the assessing authority and furnished the details sought for. Thereafter, the respondent also completed the assessment under section 143(3) by order dated March 30, 2006 demand of Rs. 51,408 was also raised and the same was paid by the petitioner herein. In respect of the assessment year 2004–05, a return of income was filed in respect oi which the Department issued an intimation under section 143(1) accepting the return filed on August 24, 2005, and determining a sum of Rs. 1,48,159. The same was also paid by the petitioner. No further proceedings were initiated by the respondent. Subsequently, the petitioner received notices under section 148 of the Income-tax Act. The petitioner received two notices dated December 19, 2008, and December 5, 2008, in respect of the assessment years 2003–04 and 2004–05. Within a period of 30 days from the date of the receipt of the notices, the correctness of issuance of these notices has been put in issue in the writ petitions on the ground that the respondent had erroneously issued these two notices on the basis of audit objection raised in respect of some of the assessments.

4. The learned counsel appearing for the petitioner would further submit that the reasons for issuance of notices cannot be permissible in view of the settled position of law and in support of her submission, she has also relied upon CIT v. Hackbridge-Hewittic & Easun Ltd., [1985] 154 ITR 378 (Mad) and Commissioner Of Income-Tax v. E.I.D Parry (India) Ltd., [1998] 230 ITR 70 (Mad). The above mentioned judgments have held that the reopening of assessment cannot be done on the basis of audit objection and on this basis, the learned counsel appearing for the petitioner seeks to quash the abovesaid impugned notices.

5. In reply, the learned senior special public prosecutor appearing for the respondent would submit that this court shall not entertain the writ petitions since the petitioner has got effective and an alternative remedy under section 251, as an appeal and further right of appeal under section 252 before the Income-tax Appellate Tribunal. Again, as against the Income-tax Appellate Tribunal, further appeal before this court under section 260A and also further remedy is contemplated under section 260B before this court. On these basis he has urged to dismiss the submissions made by the learned counsel appearing for the petitioner. The learned counsel appearing for the respondent also submitted that the petitioner also after receiving the impugned notices from the respondent have appeared before the Assessing Officer on November 27, 2009, and after making their appearances, they sought for adjournment. This was also granted and the case was also posted on December 3, 2009. Subsequently, on the date of hearing on December 3, 2009, no one appeared. No letter was submitted by the petitioner seeking further time. Nonetheless, the case was again posted to December 14, 2009. Therefore, still sufficient time is available for the petitioner to appear before the Assessing Officer by filing a detailed explanation for the notices impugned herein, hence it was urged, the writ petition is not maintainable in law.

6. Heard the parties on both the sides. This court does not want to go into the correctness of the reasons mentioned for issuance of notices impugned herein. As rightly pointed out by the learned counsel appearing for the respondent, the petitioner after receiving the impugned notices have appeared before the Assessing Officer and obtained further time to submit explanation. Now, the matter is posted for further hearing on December 14, 2009. Therefore, having seen that the matter is posted for hearing before the Assessing Officer on December 14, 2009, this court is not inclined to interfere with the notices which have called upon the petitioner to give explanation. Therefore, this court, to meet the ends of justice, one week time is granted from today (December 10, 2009) to file a detailed explanation before the Assessing Officer. Till then the respondent will not pass any final order. After considering the explanation which will be given within one week from today, it is open for the respondent to consider and pass appropriate orders in accordance with law. With this observation, these writ petitions are dismissed. No costs. Consequently, the connected miscellaneous petitions are also closed.