2019 (7) TMI 803 - HC - Income Tax

Reopening of assessment u/s 147 - survey u/s 133A was conducted in the business premise - reassessment based on documents sized/obtained in survey - assessee contend that documents obtained have no evidentiary value under the Evidence Act - not pressed the substantive prayers made in the writ petition - HELD THAT - The respondent has set in motion the steps for reassessment upon reopening the assessment orders. The petitioner is afforded opportunity to substantiate its return. The petitioner by praying for a writ of mandamus or direction as noted above, would virtually lay the path on which the proceedings u/s 148 are to be undertaken and concluded. This Court is of the view that now that the proceedings u/s 148 are initiated, the commencement as well as conclusion are very well defined by the procedure under the Income Tax Act. AO is seized of the issue and the prayer now made if is considered the same amounts restricting the discretion by this Court and in the peculiar facts of this case, this Court is of the view that such directions amount to intercepting the otherwise duly regulated power of AO and substituting the view of this Court. This Court is not persuaded to accept the request of petitioner. Therefore, no ground is made out warranting the issuance of a direction to the limited extent noted above. Writ petition fails and dismissed. However, Mr. Anil D Nair apprehends that the objections that are available in this behalf may also be shut out by understanding the order of this Court in a different way, to avoid such eventuality he requests the Court to permit the petitioner to file additional comprehensive reply to the notices impugned in the writ petition. Mr. Christopher Abraham submits that three weeks time from today can be considered and given to petitioner.

Issues:
1. Reopening of assessment under Section 147 of the Income Tax Act based on survey conducted under Section 133A.
2. Petitioner's request for reasons for reopening assessment and reliance on legal requirements related to data from computer systems.
3. Writ petition seeking quashing of orders for reopening assessment and stay of recovery proceedings.
4. Petitioner's request for a ruling on documents seized and consideration of Ext. P13 before reassessment.
5. Contentions regarding the applicability of Indian Evidence Act and Information Technology Act in assessing documents.
6. Discretion of Assessing Officer in reassessment proceedings and petitioner's request for a direction to consider Ext. P13.
7. Court's analysis of petitioner's request, premature nature of the request, and refusal to interfere with Assessing Officer's discretion.
8. Dismissal of the writ petition with permission granted to file additional comprehensive reply to the notices impugned.

Analysis:
1. The judgment pertains to the reopening of assessments for multiple assessment years based on a survey conducted under Section 133A of the Income Tax Act. The respondent initiated reassessment for various years, including the Assessment Year 2017-18, under the category of 'Manual Verification of Assessment'. The petitioner sought reasons for the reopening, highlighting legal requirements related to data obtained from the petitioner's computer systems.

2. The writ petition sought to quash the orders for reopening assessments and requested a stay on recovery proceedings. Additionally, the petitioner requested a ruling on the seized documents and urged the consideration of Ext. P13 before the reassessment process. The petitioner's counsel emphasized the importance of understanding the respondent's approach to the reassessment based on the collected material.

3. The legal arguments revolved around the applicability of the Indian Evidence Act and Information Technology Act in assessing the seized documents. The petitioner contended that the retrieved data should undergo specific legal procedures before being used for assessment purposes. However, the respondent opposed these arguments, stating that the provisions of the Evidence Act were not directly applicable in this context.

4. The judgment deliberated on the Assessing Officer's discretion in reassessment proceedings and the petitioner's request for a directive to consider Ext. P13. The Court analyzed the premature nature of the petitioner's request and declined to interfere with the Assessing Officer's authority, emphasizing the regulated procedure under the Income Tax Act for reassessment.

5. Ultimately, the writ petition was dismissed, with the Court rejecting the petitioner's request for a direction to consider Ext. P13. However, the petitioner was granted three weeks to file an additional comprehensive reply to the impugned notices. The judgment highlighted the importance of following the established procedures in reassessment cases and upheld the Assessing Officer's discretion in conducting the proceedings.

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