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2021 (5) TMI 810 - HC - Income TaxValidity of Assessment passed under Section 143(3) read with Section 144B - order was passed prior to the expiration of deadline prescribed for preferring a response - assessment order was passed much before the time to file the response elapsed - alternative remedy available - demand issued under Section 156 of the Act and the notice for initiation of penalty proceedings issued under Section 274 read with Section 270A - HELD THAT:- The impugned orders cannot be sustained.The reason being that, although, via the show cause notice-cum-draft assessment order dated 18.04.2021, the petitioner was given leave to respond to the same by 23.59 hours on 22.04.2021, the impugned assessment order was passed on 22.04.2021 at 14.11 hours, i.e., much before the time to file the response elapsed. The petitioner has taken the stand, as indicated in our order of 10.05.2021, that it had made attempts on 22.04.2021 to upload the response to the aforementioned show cause notice-cum-draft assessment order, which failed, perhaps, due to the fact that the impugned assessment order had already been passed. We have reached the conclusion that the impugned orders cannot be sustained, as none of these facts, which are stated in our order of 10.05.2021, have been put in issue. The argument that an alternate statutory remedy is available to the petitioner does not find favour with us as it is simply a self-imposed limitation which does not prevent a Court from entertaining a writ petition in a fit case - See CALCUTTA DISCOUNT COMPANY LIMITED [1960 (11) TMI 8 - SUPREME COURT] The other argument advanced on behalf of the respondent/revenue that several opportunities were given to the petitioner, before issuance of the show cause notice-cum-draft assessment order, and hence, merely because the impugned assessment order was passed prior to the expiration of deadline prescribed for preferring a response, the same would not result in violation of principles of natural justice – is, equally, untenable. The reason is this: once the respondent/revenue issued a show cause notice-cum-draft assessment, as required in law, which proposed a variation in the petitioner’s declared income, it was obliged to give an opportunity to the petitioner to file its objections. With the issuance of the show cause notice-cum-draft assessment order, the respondent/revenue firmed up its position as to how it wishes to move further in the matter. Notices issued prior to this stage are inquisitorial in nature. These are issued to ferret information and make inquiries with the object to, inter alia, ensure that there is no understatement of income or a claim of excessive loss, or a case involving under payment of tax; but once a show cause notice-cum-draft assessment order is issued, the noticee’s statutory right to file a reply and to seek a personal hearing kicks in, which cannot be curtailed. WP allowed.
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