2024 (6) TMI 1028 - HC - Income Tax

Dismissal of Writ Petition Against Income Tax Assessment Order: Alternative Appeal Route Available for AY 2018-19.

The HC dismissed the writ petition challenging the assessment order under Sec. 147 of the Income Tax Act for AY 2018-19, citing the availability of an ... Maintainability of writ petition in presence of alternative remedy of appeal - Right to disclosure of materials relied upon in reassessment proceedings - Proceedings under Section 148A and assessment under Section 147 read with Section 144B - Condonation of delay in filing appealMaintainability of writ petition in presence of alternative remedy of appeal - Proceedings under Section 148A and assessment under Section 147 read with Section 144B - Writ petition challenging the assessment order is not entertained on merits because an alternate remedy by way of appeal exists - HELD THAT: - The assessment under Section 147 read with Section 144B was preceded by proceedings under Section 148A, including issuance of notice under Section 148A(b) and an order under Section 148A(d). The disclosures relied upon in the assessment were set out in the notice under Section 148A(b) and the order under Section 148A(d). The petitioner did not respond to the Section 148A(b) notice and did not seek the documents during the Section 144B intimation proceedings. Given the availability of an effective appellate remedy, the court declined to examine the merits and held that the petitioner should agitate the points before the appellate authority by way of appeal. [Paras 12, 13, 14]Writ petition not decided on merits; petitioner to pursue the alternative remedy of appeal before the appellate authority.Right to disclosure of materials relied upon in reassessment proceedings - Condonation of delay in filing appeal - Direction to appellate authority to consider petitioner's application for disclosure of documents and information, subject to registration of appeal and condonation of delay - HELD THAT: - Although the court did not adjudicate the merits, it observed that if the petitioner files an appeal and makes an application for disclosure of the documents and information on which the reassessment was initiated, the appellate authority is permitted to consider such application. Consideration is subject to the appeal being registered, which may require condonation of delay in accordance with law. The court retained the documents produced in court but left substantive adjudication on disclosure and related contentions to the appellate forum. [Paras 7, 8, 13]Appellate authority to consider the petitioner's application for disclosure upon filing and registration of the appeal, subject to condonation of delay as per law.Final Conclusion: Writ petition disposed of without adjudicating merits; petitioner permitted to file an appeal for Assessment Year 2018-19 and to seek disclosure of materials from the appellate authority, which may consider the request if the appeal is registered and any delay is condoned in accordance with law. Issues involved:The present judgment involves a challenge to an assessment order under Section 147 of the Income Tax Act, 1961, for the assessment year 2018-19. The main issues revolve around the lack of disclosure of information to the petitioner, treatment of entities as fake, the timeliness of filing the writ petition, and the availability of an alternative remedy through an appeal.Challenge to Assessment Order:The petitioners challenged the assessment order on the grounds that they were not provided with the information and materials used in the assessment, which they argue vitiates the order. They specifically highlight discrepancies in the treatment of entities as fake and the addition of their purchases to the petitioner's income. The petitioners claim they were denied the opportunity to respond appropriately to the enquiries, thus questioning the validity of the assessment order.Timeliness of Writ Petition:The respondents argued that the writ petition was not maintainable as the assessment order was appealable, and the petition was filed after the expiration of the ordinary appeal period. They pointed out that the notice for the assessment year 2018-19 was issued in March 2022, and the petition was filed in April 2024, beyond the allowable timeframe for filing an appeal under the Income Tax Act.Disclosure of Information:The respondents contended that the petitioner was duly notified about the circumstances leading to the assessment proceeding, even though the information was not initially provided along with the notice. However, the department rectified this by sending the necessary information to the petitioner via email within two days of the notice. The respondents emphasized that the information considered in the assessment order was disclosed in the notice under Section 148A and subsequent order under Section 148A (d) of the Income Tax Act.Alternative Remedy through Appeal:The Court noted that the petitioner had an alternative remedy available in the form of an appeal. The Court opined that the petitioner could raise all points before the appellate authority, including seeking disclosure of documents and information. The judgment emphasized that the appellate authority could consider these points upon the filing of an appeal, subject to the appeal being registered after condonation of any delay, in accordance with the law.Conclusion:The Court disposed of the writ petition, emphasizing that the petitioner could pursue their grievances before the appellate authority. The judgment clarified that the Court did not delve into the merits of the case, leaving it open for the petitioner to raise all relevant points during the appeal process. All parties were directed to act based on the server copy of the order downloaded from the Court's official website.