CHENNAI: The Madras High Court has upheld the notices of the Income Tax department, which re-opened the assessment for 2008-09 and 2009-10 in respect of former Union Telecom Minister Dayanidhi Maran.
“Our great nation is a fast developing country in the world. We are effectively performing in respect to the developmental and technological activities. Greedy men are attempting to exploit the situations in many places. Corruption in our country is mounting and it becomes a routine affair in certain public businesses." When corruption is spreading like cancer in our great nation, such provisions are to be interpreted constructively by not allowing the offenders to escape from the clutches of law. The scientific way of transactions by using modern technologies is to be keenly addressed by the officials also. The corrupt activities are being injected deep into the system and it is very difficult for the authorities to cull out the modus operandi of such activities. Investigations are to be modernised and the methods of investigations are to be improved so as to match the level of corruption and the modus operandi of corruptions in certain areas,” Justice S M Subramaniam said.
The judge was dismissing two writ petitions from Maran challenging the validity of the notices issued in 2015 and 2016. In huge transactions like those of the present cases on hand, the authorities must be in a position to investigate the issues thoroughly and by using an intelligent way of investigation. “Under these circumstances, the courts cannot interfere in a routine manner in respect of the notice issued under Section 148 of the IT Act. Whenever such allegations are raised against the assessee, who was holding a high position of a Union Minister, then the department shall be allowed to investigate the matter with all fairness and by adopting an intelligent way of investigating the issues”, the judge said.
On a perusal of various circumstances incorporated under Section 147 of the Act, for reopening of the escaped assessment, the judge said that it is (the section) certainly flexible and wider power has been provided, enabling the Assessing Officer (AO) to reopen the assessment in the interest of revenue and to ensure that the assessees pay the correct tax with reference to the provisions of the Act. Where certain doubts in respect of the reasons have been raised by the assessee, such benefit of doubt should be held in favour of the revenue and not in favour of the taxpayer.
Contrariness is to be established by the assessee while scrutinising the materials available with the AO. It is for the assessee to convince the AO in respect of all such escaped assessments, information and materials available and submit the returns. This being the legal principles to be followed, the provisions are to be interpreted to achieve its purpose and the object and therefore, the wider powers provided under Section 147 of the Act for reopening the escaped assessments can never be restricted by imposing certain conditions on the AO, the judge said.
Even in case of certain procedural lapses, the judge said that such procedural lapses can be taken advantage of by the assessee only if it causes prejudice to the proceedings, if any. Such lapses not causing any prejudice to the rights of the assessee during the course of the proceedings of the reassessment, then the assessee cannot file a writ petition, seeking quashing of the entire proceedings.
Such writ petitions also cannot be entertained in view of the fact that such procedural lapses or omissions or commissions have not caused any prejudice to the interest of the assessee nor resulted in denial of fair procedure and opportunity to him, the judge pointed out. The judge also dismissed similar petitions from Sun Direct TV Private Limited and South Asia FM Limited challenging the notices issued for different assessment years on the same grounds.