2023 (1) TMI 1293 - HC - Income Tax

Reopening of Assessment u/s 147 - Whether order passed u/s 148A(d) is passed in breach of principles of natural justice? - submission is on the premise that the notice dated 23/03/2022 was received by the assessee by post on 31/03/2022 and the order under clause (d) of section 148A came to be passed on the same date without giving any opportunity whatsoever to the assessee to show cause - HELD THAT - The averments on oath which were extracted have not been rebutted by the petitioner and we see no difficulty in accepting the veracity thereof. In this view of the matter the submission that the notice and the subsequent order falls foul of the principles of natural justice must be rejected. The next submission is that the premise on which the notice is issued is unfounded and contrary to the record maintained by the petitioner-society. It is submitted that the allegation that the petitioner deposited Rs. 15, 0000/- as time deposit and amount of Rs. 59, 73, 800/- with Khamgaon Urban Cooperative Bank in the year 2014-15 is incorrect inasmuch as the petitioner has no bank account with the said bank. We are afraid that in writ jurisdiction it would not be permissible for us to consider the said contention which the petitioner has not raised before the assessing authority. We have already noticed supra that if any illegal or unjust demand of tax is made the remedy of the assessee lies elsewhere and not by directly invoking the writ jurisdiction. The petition is dismissed.

Summary

Issues:
Assailing notice under section 148A of the Income Tax Act and order rendered under the same section.
Allegations of breach of natural justice in passing the order.
Validity of notice and subsequent order based on the premise of tax evasion.
Jurisdiction of the court to consider contentions not raised before the assessing authority.

Analysis:
The judgment pertains to the challenge against a notice issued under section 148A of the Income Tax Act and the subsequent order passed. The assessing authority found that a taxable income of Rs. 74,73,800 had escaped assessment in the year 2015-16. The petitioner contended that the order was passed without giving any opportunity to show cause, alleging a breach of natural justice. However, the respondents asserted that the notice was duly served on the petitioner through email and speed-post, providing a timeline of events leading to the order.

The court noted that the petitioner did not rebut the respondent's version of events, leading to the rejection of the natural justice violation claim. Additionally, the petitioner disputed the basis of the notice, claiming discrepancies in the alleged deposits with a cooperative bank. The court held that such contentions, not raised before the assessing authority, could not be considered in a writ jurisdiction. The judgment emphasized that the appropriate forum for challenging tax demands is through the hierarchy of appeals provided by the Act, rather than directly invoking writ jurisdiction.

Ultimately, the petition was dismissed, clarifying that the court did not delve into the merits of the case, leaving it for the competent authority to assess the petitioner's contentions on their merits at the appropriate stage. The judgment underscores the importance of following due process and utilizing the prescribed avenues for redressal in tax matters, maintaining the integrity of the legal framework governing taxation assessments.