Court dismisses Writ Petition challenging Assessment Order for 2007-08, directs appeal process

The Court dismissed the Writ Petition challenging the Assessment Order for the Assessment Year 2007-08. It held that the petitioner should have availed the statutory remedy of appeal before the Commissioner before approaching the Court. As there was no violation of fundamental rights or principles of natural justice, the Court directed the petitioner to move the appellate authority within four weeks, maintaining status quo until then. The Original Assessment Order was to be returned to the petitioner's counsel for the appeal process.

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Issues:
Challenge to Assessment Order for Assessment Year 2007-08.

Analysis:
The Writ Petition was filed to quash the Assessment Order dated 22.03.2013 for the Assessment Year 2007-08. The petitioner, a company engaged in various businesses, claimed depreciation at 80% for its Power Generating Unit. The Department issued a notice under Section 148 of the Income Tax Act alleging escapement of income, leading to the reopening of assessment proceedings. The petitioner contended that the claimed depreciation was in accordance with the law and had been duly disclosed to the Department in previous years. The petitioner raised objections to the proposed assessment, which were rejected by the respondent, resulting in the filing of the Writ Petition to challenge the assessment order.

The respondent argued that the petitioner's claim of depreciation at 80% without exercising the option as per Rule 5(1) of the Income Tax Rules within the due date of filing the return was noticed after the completion of the initial assessment under Section 143(3) of the Act. The respondent maintained that the petitioner had to exercise the option as per Rule 5(1) to claim a higher rate of depreciation, which was not done in this case.

The petitioner contended that the order of assessment passed by the respondent was vitiated in law as it did not consider the order of status quo granted by the Court, which was to be in effect until a specified date. However, the respondent argued that due to the closing of the financial year, the Assessing Officer had to scrutinize the assessment and pass final orders, providing the petitioner with an appeal remedy before the Commissioner.

The Court noted that the petitioner had filed its return for the Assessment Year 2007-08 declaring 'nil' income after claiming deductions under Section 80IB of the Act. The Department found the claimed depreciation to be excessive, leading to the reassessment and the impugned order. The Court emphasized that the petitioner had an effective statutory remedy of appeal before the Commissioner, which should have been availed before approaching the Court. As there was no violation of fundamental rights or principles of natural justice, the Court directed the petitioner to move the appellate authority within four weeks and maintained status quo until then. The Original Assessment Order was to be returned to the petitioner's counsel for the appeal process.

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