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M/s. Hanon Automotive Systems India Private Limited, (Previously known as M/s. Visteon Automotive Systems India Private Limited) Represented by its Authorised Signatory, B. Swaminathan v/s The Deputy Commissioner of Income Tax, Chennai & Another


Company & Directors' Information:- HANON AUTOMOTIVE SYSTEMS INDIA PRIVATE LIMITED [Active] CIN = U35911TN1997PTC037782

Company & Directors' Information:- VISTEON AUTOMOTIVE (INDIA) PRIVATE LIMITED [Active] CIN = U31902PN2005PTC020905

Company & Directors' Information:- C P SYSTEMS PVT LTD [Active] CIN = U29199DL1999PTC101718

Company & Directors' Information:- J J AUTOMOTIVE LTD [Active] CIN = L34103WB1981PLC033996

Company & Directors' Information:- T SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U72200DL2004PTC127138

Company & Directors' Information:- A K M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC018546

Company & Directors' Information:- S C L AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U35900TN2009PTC072343

Company & Directors' Information:- W B M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC017764

Company & Directors' Information:- P P AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U35999HR2009PTC039808

Company & Directors' Information:- A. S. INDIA LIMITED [Active] CIN = U70100MP2009PLC022300

Company & Directors' Information:- AUTOMOTIVE CORPN OF INDIA LTD [Strike Off] CIN = U15422MH1974PLC017377

Company & Directors' Information:- G N AUTOMOTIVE PRIVATE LIMITED [Strike Off] CIN = U50102MH2010PTC201448

Company & Directors' Information:- G. H. AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U34300DL2007PTC161956

Company & Directors' Information:- A R G SYSTEMS LIMITED [Active] CIN = U74899DL1994PLC062621

Company & Directors' Information:- C V AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U63011DL2009PTC189646

Company & Directors' Information:- S SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111270

Company & Directors' Information:- SYSTEMS INDIA PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059377

Company & Directors' Information:- K J AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U50401PN2013PTC146058

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- V S S SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U03000TZ1997PTC007933

Company & Directors' Information:- D M AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U29253HR2012PTC045797

Company & Directors' Information:- I L SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U18100GJ1999PTC037104

Company & Directors' Information:- A V SYSTEMS PRIVATE LIMITED [Active] CIN = U31909PN2001PTC015788

Company & Directors' Information:- N D T SYSTEMS PRIVATE LIMITED [Active] CIN = U74210MH1996PTC104744

Company & Directors' Information:- S P P S SYSTEMS PRIVATE LIMITED [Active] CIN = U72200TG2000PTC033732

Company & Directors' Information:- L S I SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U32109DL2000PTC105666

Company & Directors' Information:- T K W AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U34300DL2005PTC137031

Company & Directors' Information:- H B S SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1992PTC048198

Company & Directors' Information:- L G K AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U34300AS2001PTC006713

Company & Directors' Information:- L K AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U34300GJ2011PTC066118

Company & Directors' Information:- U C SYSTEMS INDIA PVT LTD [Active] CIN = U72200DL1997PTC084267

Company & Directors' Information:- L C SYSTEMS PRIVATE LIMITED [Active] CIN = U55200PB2012PTC036880

Company & Directors' Information:- C I SYSTEMS PVT LTD [Active] CIN = U45200TG1983PTC003915

Company & Directors' Information:- M J SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72900MH2005PTC150591

Company & Directors' Information:- R R SYSTEMS PRIVATE LIMITED [Active] CIN = U30007DL1999PTC098142

Company & Directors' Information:- C N C SYSTEMS PVT LTD [Active] CIN = U72900DL1999PTC100476

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- M B M SYSTEMS PRIVATE LIMITED [Active] CIN = U30006DL1988PTC030404

Company & Directors' Information:- C SYSTEMS PRIVATE LIMITED [Active] CIN = U31103TN2009PTC071155

Company & Directors' Information:- R M I SYSTEMS PRIVATE LIMITED [Active] CIN = U72200KA2011PTC060246

Company & Directors' Information:- W & S SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U74910TN2005PTC055568

Company & Directors' Information:- M. Y. T. SYSTEMS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74990TG2016PTC110104

Company & Directors' Information:- L V SYSTEMS PRIVATE LIMITED [Active] CIN = U31900KA2021PTC150256

Company & Directors' Information:- CHENNAI AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U34300TN2021PTC146444

Company & Directors' Information:- S E I SYSTEMS LIMITED [Strike Off] CIN = L74899DL1994PLC061731

Company & Directors' Information:- D C S SYSTEMS LIMITED [Strike Off] CIN = U72100MP2000PLC014224

Company & Directors' Information:- I T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL1999PTC098431

Company & Directors' Information:- I O SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029166

Company & Directors' Information:- S E C O M SYSTEMS PRIVATE LIMITED [Active] CIN = U31909HR2009PTC039084

Company & Directors' Information:- D M SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL1999PTC101817

Company & Directors' Information:- J N AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U50102AS2014PTC011838

Company & Directors' Information:- K K K SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100UP1995PTC017784

Company & Directors' Information:- A S A AUTOMOTIVE PVT LTD [Strike Off] CIN = U51109WB1991PTC052174

Company & Directors' Information:- E-SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72200WB2003PTC096700

Company & Directors' Information:- J B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200KL1997PTC011510

Company & Directors' Information:- M AND S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200MH1996PTC103819

Company & Directors' Information:- K AND M SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U32101UP1993PTC015352

Company & Directors' Information:- S S V SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1996PTC037072

Company & Directors' Information:- R G B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1998PTC040485

Company & Directors' Information:- C C SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31100TG1996PTC023469

Company & Directors' Information:- D R P AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U51101DL2014PTC267341

Company & Directors' Information:- K R T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U52392TN2002PTC048704

Company & Directors' Information:- B & D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100OR1996PTC004611

Company & Directors' Information:- A M P S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900WB2001PTC093281

Company & Directors' Information:- G M E SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U71290DL1987PTC029758

Company & Directors' Information:- R B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31300RJ1990PTC005689

Company & Directors' Information:- E D H SYSTEMS PVT. LTD. [Strike Off] CIN = U99999DL1991PTC045384

Company & Directors' Information:- H N G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900RJ2012PTC040713

Company & Directors' Information:- F A SYSTEMS PRIVATE LIMITED [Active] CIN = U72100MH2004PTC148941

Company & Directors' Information:- D S AUTOMOTIVE PRIVATE LIMITED [Strike Off] CIN = U50102MH2011PTC215763

Company & Directors' Information:- H AND P SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U74900PN2013PTC146918

Company & Directors' Information:- G. K. SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900PN2006PTC129225

Company & Directors' Information:- T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31403TN2006PTC061859

Company & Directors' Information:- V. E AUTOMOTIVE INDIA PRIVATE LIMITED [Active] CIN = U34200UP2012PTC054101

Company & Directors' Information:- I T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72400AS1999PTC005824

Company & Directors' Information:- Y Y SYSTEMS PRIVATE LIMITED [Active] CIN = U72200CH2015PTC035767

Company & Directors' Information:- N P M E SYSTEMS PRIVATE LIMITED [Active] CIN = U29299DL1998PTC094645

Company & Directors' Information:- K. S. AUTOMOTIVE PRIVATE LIMITED [Active] CIN = U51502DL2007PTC163634

Company & Directors' Information:- R D SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL2000PTC103462

Company & Directors' Information:- V C SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111812

Company & Directors' Information:- K B N SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U64204DL1997PTC088904

Company & Directors' Information:- A B SYSTEMS PRIVATE LIMITED [Active] CIN = U93000DL2012PTC234774

Company & Directors' Information:- J K AUTOMOTIVE PRIVATE LIMITED [Converted to LLP] CIN = U34300DL2011PTC218392

Company & Directors' Information:- J S N D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900GJ2011PTC065160

Company & Directors' Information:- J C D SYSTEMS PVT LTD [Strike Off] CIN = U32109PB1988PTC008438

Company & Directors' Information:- Y R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC105093

Company & Directors' Information:- S R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC104743

Company & Directors' Information:- F C S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U73100DL1997PTC090517

Company & Directors' Information:- E R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC061904

Company & Directors' Information:- R & T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL2008PTC179617

Company & Directors' Information:- Q S Q SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U51109KA2000PTC026269

    W.A. Nos. 830, 835 of 2019 & C.M.P. No. 6495 of 2019

    Decided On, 14 March 2019

    At, High Court of Judicature at Madras

    By, THE HONOURABLE DR. JUSTICE VINEET KOTHARI & THE HONOURABLE MR. JUSTICE C.V. KARTHIKEYAN

    For the Appellant: N.V. Balaji, Advocate. For the Respondents: Hema Muralikrishnan, Senior Standing Counsel.



Judgment Text


(Prayer: Writ Appeals filed under Clause 15 of Letters Patent against the order of this court dated 11.1.2019 in W.P.Nos.938 and 941 of 2019.)

Common Judgment

Dr. Vineet Kothari, J.

1. The Assessee M/s.Hanon Automotive Systems India Private Limited has filed these Intra-Court Appeals being aggrieved by the order of the learned Single Judge dated 11.1.2019, dismissing the writ petitions which were filed by the Assessee challenging the initiation of re-assessment proceedings under Section 147/148 of the Income Tax Act, 1961 against the Assessee for the Assessment Year 2011-2012.

2. The reasons for initiation of the said re-assessment proceedings are quoted below for ready reference:-

“It is seen the P&L a/c, net profit during the year is Rs.1162.84 million whereas net profit adopted in the income computation statement is only Rs.116,27,98,958/-. The difference of Rs.50,000/- is income escaped assessment.

On scrutiny of records, it is revealed that as per Col.17(a) of Form 3CD audit report, capital expenditure debited to P&L a/c is Rs.14,16,73,150/- being development and testing charges. As per P&L a/c, total development and testing charges debited is Rs.22,53,57,511/-. The assessee did not add back the same in the Income Computation statement. Since capital expenditure is not allowable expenditure, the same should be disallowed.”

3. The Assessee did not raise any objection against the reasons indicated to him. Thereupon, the learned Assessing Authority has passed the order of re-assessment dated 7.12.2018 adding back the said Development and Testing Charges of Rs.22,53,57,511/- holding it to be a Capital Expenditure which was claimed as Revenue Expenditure by the Assessee in the Profit and Loss Account.

4. Aggrieved by the same, instead of filing regular Appeals before the Commissioner of Income Tax (Appeals), the Assessee filed the present writ petitions under Article 226 of the Constitution of India which, however, came to be dismissed by the learned Single Judge by the impugned order which is under Appeals before us under Clause 15 of the Letters Patent.

5. The learned Single Judge held that the Assessee, having not filed any objection before the Assessing Authority against initiation of re-assessment proceedings for the reasons for re-opening the Assessment, he was not entitled to question the jurisdiction of the Assessing Authority now and therefore, the writ petition was not maintainable and the Assessee ought to have filed regular Statutory Appeals under the provisions of the Act.

6. Being aggrieved, the Assessee has approached the Division Bench in this Intra-Court Appeals.

7. The learned counsel for the Assessee Mr.N.V.Balaji submitted that there was lack of jurisdiction with the Assessing Authority to re-open the said Assessment as in the earlier Assessment Years, under section 143(3) of the Act this aspect of the matter about the Development and Testing Charges being claimed as Revenue Expenditure by the Assessee was duly considered by the Assessing Authority wherein the Assessee had supplied the relevant materials and the same came to be allowed as Revenue Expenditure by the Assessing Authority in Assessment under Section 143(3) and therefore, on a change of opinion, the Assessing Authority could not have re-opened the Assessment Order under Section 147/148 of the Act to disallow the same as Capital Expenditure. He, therefore, submitted that the impugned notice under Section 143(3) read with Section 147 of the Act itself deserves to be quashed. As far as the first reason of disclosing the net profits as per the Profit & Loss Account, which was as disclosed as Rs.1162.84 Millions was merely detailed as Rs.116,27,98,958/- and therefore, a difference of Rs.50,000/- could not be treated as escaped income. He therefore, submitted that both the reasons are not reasons at all in the eye of law and therefore, re-assessment deserves to be quashed. He submitted that even though no objection was raised before the Assessing Authority at the time of impugned notice under Section 147/148 of the Act or upon the reasons for re-opening supplied to him, since the question goes to the root of the jurisdiction of the Assessing Authority to re-open, the writ petition was maintainable and the learned Single Judge has erred in rejecting the writ petition. He further submitted that the Assessing Authority ought to have recorded the reasons also about the failure on the part of the Assessee to disclose the relevant materials fully and truly during the course of Original Assessment which was done earlier and therefore, it is a vital question that to be decided in the present case. He relied upon the judgment of the Supreme Court in the case of Calcutta Discount Co. Ltd. v. Income Tax Officer ((1961) 41 ITR 191 (SC) and also the decision of the Commissioner of Income-tax, Chennai v. Schwing Stetter India (P) Ltd. ((2015) 61 Taxmann.com 19 (Madras).

8. Having heard the learned counsel appearing for the appellant, we are satisfied that there is no merit in the present writ appeals and the same deserve to be dismissed for the following reasons.Firstly, we may observe that the learned Single Judge was absolutely right in holding that the Assessee, having not raised an objection before the Assessing Authority to the re-opening of the assessment under Section 147/148 of the Act, should be deemed to have acquiesced to the same. Nothing prevented the Assessee from raising the objection, which could have been dealt with by the Assessing Authority in accordance with law.

9. Having not raised any such objection before Assessing Authority that the expenditure claimed as Revenue Expenditure was already considered and allowed as Revenue Expenditure and therefore, for treating the same now as Capital Expenditure is a change of opinion, is not a tenable contention and therefore, it cannot be a ground to be raised in writ jurisdiction. Further, when a specific and adequate alternative remedy is available to the Assessee for taking such a plea to find as to whether the expenditure claimed by the Assessee is to be treated as Revenue Expenditure or Capital Expenditure, if the High Court was to entertain such controversy on merits, the entire litigation in this respect can be just brought on the Board of the High Court instead of availing the regular Appellate Forum provided under the Act.

10. The Income Tax Act is a self-contained Act and the High Court, under Section 260A of the Act, in its Appellate Jurisdiction, is not the proper forum for deciding such a mixed question of facts and law. The decision of the Hon’ble Supreme Court in Calcutta Discount Co. Ltd. v. Income-tax Officer ((1961) 41 ITR 191 (SC)) and the decision of a co-ordinate Bench of this court in Commissioner of Income-tax, Chennai v. Schwing Stetter India (P) Ltd. ((2015) 61 Taxmann.com 19 (Madras)), cited by the learned counsel for the Appellant cannot be applied to the present case as in each and every case, the circumstances warranting interference by High Court, in its writ jurisdiction, would vary.

11. We are satisfied that in the present case, there was no change of opinion on the part of the Assessing Authority and therefore, the re-opening of the Assessment Order was initiated on valid and reasonable grounds. Even the difference between ‘change of opinion’ and ‘reasons to believe’-the condition precedent for invoking Sections 147 and 148 of the Act is very thin. Even if there is a correct disclosure of the expenditure, it may be, in the opinion of the Assessee, a Revenue Expenditure but, in the opinion of the Assessing Authority, it can be a Capital Expenditure. B

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ut, that deserves to be decided on the basis of facts by the higher Appellate Forums and that cannot become the ground to straightaway invoke the writ jurisdiction under Article 226 of the Constitution of India. Therefore, we are satisfied that the order of the learned Single Judge does not suffer from infirmity so as to call for any interference and the present appeals are devoid of merit and are liable to be dismissed. Accordingly, the Appeals of the Assessee are dismissed. No costs. The connected miscellaneous petition is also dismissed. 12. If the Assessee now files the regular Statutory Appeal within a period of two weeks from today, the same could be entertained without objection as to the period of limitation, however subject to compliance of other usual conditions by the Assessee for maintaining such Appeals under Section 246 of the Act.
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