2022 (5) TMI 1429 - HC - Income Tax

Violation of principles of natural justice - assessment as contrary to the three notices issued to the petitioner - HELD THAT - Considering the fact that the impugned order has been passed based on the records that were available and furnished to the Income Tax Department find no merits in entertaining the present writ petition. It is suffice to state that the petitioner has to work out the remedy before the Appellate Commissioner. Therefore liberty is given to the petitioner to file a statutory appeal within a period of 30 days from the date of receipt of a copy of this order. If such an appeal is filed it shall be taken on file and disposed on merits. The petitioner is also given liberty to file an appropriate application to stay the recovery proceeding under Section 220(6) of the Income Tax Act 1961.

Summary

Issues:
Challenge to assessment order based on purchase and sale value discrepancy, Violation of principles of natural justice in passing the impugned order.

Analysis:
The petitioner challenged the assessment order issued by the second respondent, contending that the basis of assessment contradicts the three notices served earlier. The petitioner bought a property in 2007-2008 for Rs.95.18 Lakhs, selling it in the relevant financial year for Rs.90,00,000/-. The petitioner's counsel argued that the dispute centered on the sale consideration and income taxed, not the purchase value. Alleging a breach of natural justice, the petitioner sought to quash the impugned order.

The respondent's counsel countered that while the impugned order acknowledged the sale value as Rs.90,00,000/-, it determined the purchase value at Rs.12.35 Lakhs based on provided documents. The court noted that the order relied on available records furnished to the Income Tax Department. Consequently, the court found no merit in entertaining the writ petition, advising the petitioner to seek recourse with the Appellate Commissioner. The petitioner was granted 30 days to file a statutory appeal, with assurance of due consideration on merits. Additionally, the petitioner could apply to halt recovery proceedings under Section 220(6) of the Income Tax Act, 1961.

Ultimately, the court dismissed the writ petition, allowing no costs and closing connected Writ Miscellaneous petitions. The judgment emphasized the petitioner's avenue for appeal and potential stay of recovery proceedings, directing them to pursue relief through the statutory process.