2018 (5) TMI 446 - HC - Income Tax

Orders passed u/s 201(1)/201(1)(A)- two demand notices called upon the petitioners to pay the demands for the AY 2016-17 and 2017-18 consequent to the orders within a period of seven days. This without giving any reasons for curtailing the statutorily available period of 30 days in terms of Section 220 - Revenue objects to the petition being entertained as the impugned orders dated 7th February, 2018 are appeallable to the Commissioner of Income Tax (Appeals) Held that - The petitioner would file the two Appeals to the Commissioner of Income Tax (Appeals) from the two orders dated 7th February, 2018 within a period of 2 weeks from today. The impugned orders dated 7th February, 2018 had been stayed by the order of this Court dated 15th February, 2018. Thus, the 30 days period to file an Appeal would not have expired. In any event, in case the petitioners do file Appeals within a period of 2 weeks from today, the Commissioner of Income Tax (Appeals) will entertain the same on merits.

Summary

Issues:
Challenges to orders under Section 201(1)/201(1)(A) of the Income Tax Act, 1961 for Assessment Years 2016-17 and 2017-18 on grounds of breach of natural justice and curtailed statutory period for payment.

Analysis:
The two petitions filed under Article 226 of the Constitution of India challenged the orders dated 7th February, 2018 passed under Section 201(1)/201(1)(A) of the Income Tax Act, 1961 for Assessment Years 2016-17 and 2017-18. The petitioners contended that the assessment orders were passed in violation of principles of natural justice as the show cause notices issued by the Assessing Officer required information/documents by 9th February, 2018, but the impugned orders were issued on 7th February, 2018. Additionally, the demand notices called for payment within seven days, contrary to the statutory 30-day period under Section 220 of the Act.

The Revenue objected to the petitions being entertained, arguing that the impugned orders were appealable to the Commissioner of Income Tax (Appeals) under the Act. However, in a peculiar turn of events, the Revenue, represented by Mr. Suresh Kumar, offered that if the petitioners filed appeals within two weeks, no coercive recovery proceedings would be initiated until the Appeals were disposed of by the Commissioner of Income Tax (Appeals) within 4 months from filing.

In response, Mr. Mistri, representing the petitioners, confirmed their intention to file appeals within two weeks. The impugned orders dated 7th February, 2018 had been stayed by a previous court order, ensuring that the 30-day period for filing appeals had not lapsed. Consequently, the Commissioner of Income Tax (Appeals) agreed to consider the appeals on their merits.

Given the statement made by the Revenue and the petitioner's decision to file appeals, Mr. Mistri sought to withdraw the petitions, which were subsequently disposed of as withdrawn.