2020 (4) TMI 167 - HC - Income Tax

Validity of best judgement assessment u/s 144 - It is submitted that reply could not be submitted since the notice was not uploaded on the website - Violation of principles of natural justice - HELD THAT - Petitioners stated in the grounds of appeal he has not raised the grounds now urged before this Court before the Appellate Authority. Therefore it would only be appropriate that a direction is given to the petitioner to file the additional grounds now raised regarding the violation of principles of natural justice and a further direction is given to the CIT (appeals) to consider the same in the first instance and if he finds that there is a violation of principles of natural justice pass appropriate orders. If the Officers find that there is no violation of principles of natural justice then the said Officer may proceed to examine the appeals. The additional grounds of the appeal will have to be filed before the Commissioner of Income Tax appeals on or before 17.03.2020. If it is filed within the said date the Commissioner of Income Tax may take up those additional grounds for enquiry on or before 30.03.2020 but subject to availability of records and any other administrative reasons.

Summary

Issues:
Challenging assessment orders under Section 144 of the Income Tax Act for the year 2017-2018; Allegation of violation of principles of natural justice due to non-service and delayed uploading of notices; Request for interference by the court to remit matters back to the assessment officer for fresh assessment orders; Reference to previous judgments with similar circumstances; Direction for filing additional grounds of appeal regarding the violation of principles of natural justice before the Commissioner of Income Tax.

Analysis:
The High Court of Madras delivered a judgment on two writ petitions challenging assessment orders under Section 144 of the Income Tax Act for the year 2017-2018. The petitioners raised concerns regarding the violation of principles of natural justice due to non-service and delayed uploading of notices. They alleged that the assessment orders were passed without considering their explanations, leading to a lack of fair opportunity to present their case. The court was urged to interfere and remit the matters back to the assessment officer for fresh assessment orders, emphasizing the importance of adherence to natural justice principles in such proceedings.

In response to the petitioners' contentions, the court considered previous judgments with similar circumstances. It referenced cases where assessment orders were quashed and remitted back to the assessment officer for fresh consideration due to procedural irregularities and violations of natural justice principles. The court highlighted the importance of ensuring a fair and transparent assessment process, especially in cases where taxpayers' rights are at stake.

The court also addressed the issue of filing additional grounds of appeal regarding the violation of principles of natural justice before the Commissioner of Income Tax. It directed the petitioners to file these additional grounds within a specified timeline and instructed the Commissioner of Income Tax to consider them in the first instance. The court emphasized the need for a thorough review of the alleged violations of natural justice and instructed the Commissioner to take appropriate action based on the findings.

In conclusion, the court disposed of the writ petitions with observations on the importance of upholding principles of natural justice in tax assessment proceedings. It emphasized the need for a fair and transparent process that allows taxpayers to present their case effectively. The court's decision aimed to ensure that the rights of the petitioners were protected and that any procedural irregularities were addressed appropriately.