2016 (12) TMI 495 - HC - Income Tax

Reopening of assessment - grievance of the petitioner is that the Principal Commissioner of Income Tax has besides deciding the dispute with regard to the date of issue of notice dated 28th March, 2015 also held that the notice has been served upon the petitioner by virtue of deemed service of notice - Held that - We notice that the impugned order dated 6th September, 2016 the Principal Commissioner of Income Tax has correctly recorded that the following two issues had to be decided by him consequent to the order dated 13th July, 2016 of this Court (i) Whether or not the alleged notice under Section 148 of the Act was issued, and (ii) If so, the date of its issuance. Therefore, all observations/findings with regard to service of the impugned order dated 6th September, 2016 are completely outside his mandate and are to be ignored. It would be open for the Assessing Officer while deciding on the reopening notice to independently consider the issue of service of the impugned notice dated 28th March, 2015. Needless to state the Assessing Officer will not be even remotely influenced by the observations as to deemed service of the notice in the impugned order dated 6th September, 2016. We must make it clear that window of four weeks was provided only to safeguard the petitioner in case the order of the Principal Commissioner of Income Tax is in breach of our directions. This safeguard given to the petitioner will not entitle it to convert the writ court into an appellate authority to examine the weight to be given to the evidence led before the Principal Commissioner of Income Tax. In fact, nothing has been shown to us which would even remotely suggest that the order dated 6th September, 2016 is perverse in any manner.

Summary

Issues:
Challenge to notice seeking to reopen assessment for Assessment Year 2008-09 under Section 148 of the Income Tax Act, 1961 and the order determining the issuance date of the notice.

Analysis:
The petitioner challenged show cause notices issued by the Assessing Officer for the Assessment Year 2008-09, claiming they were time-barred as no notice under Section 148 had been issued before March 31, 2015. Dispute arose regarding the date of issue of the notice, leading to the Principal Commissioner of Income Tax being tasked to determine the issuance and date within eight weeks. The Principal Commissioner conducted hearings, allowed evidence, and cross-examination, culminating in the order of September 6, 2016, affirming the notice was issued on March 28, 2015, within the statutory limitation period.

The petitioner contested the order, arguing the Principal Commissioner overstepped by deciding on the notice's service, beyond the court's directive. The court clarified that the Commissioner's mandate was solely to determine if the notice was issued before the limitation period, disregarding any findings on service. The Assessing Officer was tasked to independently assess the service issue without influence from the Commissioner's observations.

Further, the petitioners raised objections on the appreciation of evidence in the September 6, 2016 order, contending it should be addressed by the authorities under the Act. The court noted that the Commissioner's decision was a plausible view based on the evidence presented, focusing on the issue directed to decide – the notice's timely issuance for reopening the assessment.

The court emphasized that its July 13, 2016 order allowed for challenging the Commissioner's decision within a specific timeframe to safeguard against any breaches of directions, clarifying that this did not permit the court to act as an appellate authority for evidentiary weight. As the September 6, 2016 order was not shown to be perverse, the court declined to intervene, directing the matter to proceed before the Assessing Officer as per the previous order.

Lastly, the petitioner sought an extension of the stay granted, which was denied by the court based on the circumstances. The petition was disposed of accordingly, with no costs imposed, and all contentions were kept open for further proceedings before the authorities under the Act.