2023 (11) TMI 1005 - HC - Income Tax

Writ petitions challenging assessment orders dismissed for non-maintainability after voluntary withdrawal of appeals

M/s. Travancore Diagnostics Private Ltd., Versus The Assistant Commissioner Of Income Tax, Circle-1, Kollam

Kerala HC dismissed writ petitions challenging assessment orders for non-maintainability. Petitioner withdrew appeals before CIT(A) voluntarily, not due ... Maintainability of writ petition - validity of reopening of assessment on Non-service of notice u/s 143(2) - non-mentioning of the provision of Section 142(3) in the notice - as per revenue once the petitioner has challenged the assessment orders in appeals before the CIT(A) u/s 246 of the Act, there was no occasion for him to approach this Court challenging the very same assessment orders - HELD THAT:- This Court had permitted only to cure the technical defects, if any, and to file writ petitions afresh. However, this Court had not granted any liberty to the petitioner to withdraw the appeals filed before the CIT(A). Withdrawal of the appeals by the petitioner filed before the CIT(A) against the assessment orders, was not because of the liberty granted by this Court, but on his own volition. The petitioner could have challenged the assessment orders on merits, but it wanted to advantage of some technical issues and, therefore, instead of contesting the assessment orders on merits, the petitioner approached this Court. Hence, do not find that these writ petitions are maintainable. Non-service of notice u/s 143(2) of the Act is also liable to be rejected. In as much as the petitioner was issued notice in Annexure-R(a) and in pursuance to the said notice, the petitioner had participated in the proceedings for re-opening of the assessment orders, which is evident from the order sheet maintained before the assessing officer. Therefore, if the notice, Annexure-R(a) did not mention the provision under Section 143(2) of the Act, the same would not become invalid because of non-mentioning of the provision of Section 143(2). What is relevant is notice of hearing and the petitioner was issued notice of hearing. In substance, the notice in Annexure-R(a) was a notice under Section 143(2). Therefore, find no substance in the submission of petitioner that the petitioner was not served with notice under Section 143(2) of the Act, and therefore, the subsequent proceedings and assessment orders had become bad in law and are liable to be set aside. The judgment cited by the learned counsel for the petitioner in the case of Hotel Blue Moon (supra) is distinguishable on the facts of the present case. The technical issue raised by the petitioner is also not present in the facts of these cases. Therefore, these writ petitions are not maintainable and are liable to be dismissed. Considering the provisions of Sections 292B and 292BB of the Act, when the petitioner had participated in the proceedings in pursuance to the notice issued in Annexure-R(a), the petitioner, after finalisation of the assessment orders, cannot take the plea that the assessment orders are incorrect on the ground of non-mentioning of the provision of Section 142(3) in the notice. The assessment orders cannot be challenged on just technical ground, in view of the express provision of Sections 292B and 292BB of the Act. No substance in these writ petitions, which are hereby dismissed. Issues involved:The judgment involves challenges to assessment orders and demand notices for the assessment years 2007-08 and 2008-09, withdrawal of appeals before the Commissioner of Income Tax (Appeals), and the validity of notice under Section 143(2) of the Income Tax Act.Challenge to Assessment Orders:The petitioner, a Private Limited Company providing medical diagnostics services, filed returns for the years 2007-08 and 2008-09, but a survey revealed suppressed receipts and payments without TDS. Notices were issued under Section 148 for escaped assessment. Assessments were completed based on gross receipts, leading to demand notices challenged in the writ petitions.Withdrawal of Appeals:The petitioner had initially filed appeals against the assessment orders before the CIT(A) but withdrew them to address technical defects. The withdrawal was not due to any court direction but voluntary. The petitioner then filed the writ petitions challenging the assessment orders without pursuing the appeals before the CIT(A), which led to objections on maintainability.Validity of Notice under Section 143(2):The petitioner argued that the absence of a notice under Section 143(2) rendered the subsequent assessment orders null and void. The Revenue contended that the petitioner participated in proceedings after receiving the notice, and the format of the notice did not invalidate it. The Court considered the substance of the notice and the petitioner's participation in the proceedings.Court's Decision:The Court found the writ petitions not maintainable due to the withdrawal of appeals before the CIT(A) without court direction. It rejected the argument of non-service of notice under Section 143(2), stating that the petitioner's participation in the proceedings validated the notice. The judgment emphasized the importance of substance over technicalities and dismissed the writ petitions. The Court directed the restoration of the withdrawn appeals before the CIT(A) for further consideration on merits.Conclusion:The judgment addressed the challenges to assessment orders, withdrawal of appeals, and the validity of the notice under Section 143(2). It emphasized the need to focus on substance over technicalities in legal proceedings and directed the petitioner to pursue the appeals before the CIT(A) for a proper consideration of the issues raised.