Challenge to reassessment based on survey statement u/s 133A held premature; objections left to assessing authority

The HC held that the challenge to the reassessment proceedings initiated on the basis of a statement recorded during a survey u/s 133A of the IT Act was premature. The writ petitions were dismissed, with liberty to the petitioner to raise all objections, including on jurisdiction and reliance on the 133A statement, before the assessing authority. The HC directed the assessing authority to consider such objections, including any judicial precedents and departmental circulars cited, and to afford reasonable opportunity of hearing before passing the reassessment orders in accordance with law.

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Issues involved: Challenge to impugned assessment notices for the assessment years 2015-16, 2016-17, and 2017-18 based on statements obtained during a survey under Section 133A of the Income Tax Act, 1961.

Summary:

Facts Overview:
The petitioner, a company trading carbon and alloy steel iron bars, had a survey under Section 133A of the IT Act on its premises where statements were obtained. The petitioner initially offered a low net profit percentage but later retracted the statement. Notices were issued under Section 148 of the IT Act based on the initial statement, leading to objections from the petitioner.

Petitioner's Argument:
The petitioner challenged the assessment notices, arguing that making assessments solely based on statements under Section 133A is improper. Reference was made to a previous court judgment highlighting the importance of giving the assessee an opportunity to correct any incorrect admissions.

Respondent's Argument:
The respondent contended that objections should be raised before the completion of assessment and that the petitioner can present all objections during that stage.

Court Decision:
The court found merit in the respondent's submission that the writ petitions were premature. The court directed the petitioner to raise objections before the assessing authority, who should consider them during the assessment process. The assessing authority was instructed to provide a reasonable opportunity and address any jurisdictional issues raised by the petitioner during the assessment.

Conclusion:
The writ petitions were disposed of with the direction for the assessing authority to address the petitioner's objections during the assessment process. No costs were awarded, and connected miscellaneous petitions were closed.

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