Court upholds assessment notices for A.Y. 2016-17 & 2017-18, dismisses challenge, grants further submissions

The court rejected the challenge to assessment notices for A.Y. 2016-17 and A.Y. 2017-18, finding that the petitioner was provided with adequate opportunities to respond. It held that the jurisdictional validity of the show cause notices was upheld, emphasizing the availability of alternative remedies under the Income Tax Act. The court concluded that the writ applications lacked merit, vacated interim relief, and rejected the applications. However, the petitioner was granted an opportunity to make further submissions before the concerned authority in the related proceedings, subject to limitation, ensuring a fair hearing process.

---

---

Issues Involved:
1. Challenge to assessment notices for A.Y. 2016-17 and A.Y. 2017-18.
2. Adequacy of the opportunity provided to the petitioner to respond to show cause notices.
3. Jurisdictional validity of the show cause notices.
4. Availability and adequacy of alternative remedies under the Income Tax Act.

Issue-wise Detailed Analysis:

1. Challenge to Assessment Notices for A.Y. 2016-17 and A.Y. 2017-18:
The writ applications challenge the assessment notices issued for the Assessment Years (A.Y.) 2016-17 and 2017-18. The petitioner sought to quash the show cause notices dated 18/12/2018 and 21/12/2018, arguing that these notices were issued without proper jurisdiction and adequate opportunity for response.

2. Adequacy of the Opportunity Provided to the Petitioner:
The petitioner contended that insufficient time was provided to respond to the show cause notices, which were issued on 18/12/2018 and 21/12/2018, with hearings fixed on 20/12/2018 and 24/12/2018, respectively. The petitioner argued that this short notice period did not allow them to adequately address the contents of the notices, particularly as the enquiry report referenced in the notice was not furnished to them. However, the court found that adequate and reasonable opportunities were given to the petitioner from time to time, and the petitioner was well aware of the facts of the pending court proceedings. The court also noted that the assessment proceedings had been transferred to the Central Charge, and all relevant documents were furnished to the petitioner.

3. Jurisdictional Validity of the Show Cause Notices:
The petitioner argued that the issues raised in the impugned notices were not referred to in the initial notice issued under Section 143(2) of the Income Tax Act on 28th July 2017. The court rejected this contention, stating that once a notice under Section 143(2) is issued, the assessment is at large, and any further information received during the assessment proceedings must form part of the assessment. The court clarified that the issuance of further show cause notices during the ongoing assessment proceedings is permissible under the scheme of the Act.

4. Availability and Adequacy of Alternative Remedies:
The court emphasized that the petitioner had an adequate alternative remedy available under the Income Tax Act, which includes the assessment/re-assessment process, imposition of penalty, and obtaining relief through appeals. The court referenced the Supreme Court's decision in Commissioner of Income Tax vs. Chhabil Das Agarwal, which held that the writ jurisdiction should not be invoked when an effective statutory remedy is available. The court also noted that the petitioner had not demonstrated that the alternative remedy was ineffectual or non-efficacious.

Conclusion:
The court concluded that the writ applications lacked merit and should not interfere with the impugned show cause notices. The interim relief granted earlier was vacated, and the writ applications were rejected. However, the court allowed the petitioner an opportunity to make further submissions before the concerned authority in the proceedings related to Special Civil Application No.22471 of 2019, subject to the aspect of limitation.

Further Order:
The court clarified that the concerned authority should hear the petitioner before taking a final decision in the matter, even if the department believes the hearing has concluded, to ensure the petitioner can make relevant submissions.

Judgment Delivered by:
The judgment was delivered by Honourable Mr. Justice J.B. Pardiwala and Honourable Mr. Justice Ilesh J. Vora.

---