2019 (8) TMI 366 - HC - Income Tax

Assessment u/s 153A - petitioner contended that after issuance of notice u/s 153A pending demand also abate - HELD THAT - In the present case, it is true that a notice was issued u/s 153. The petitioner was asked to furnish true and correct particulars of income including the income, which was included by the petitioner in the original return while finalizing the total income, meaning thereby, the return filed in response to the notice u/s 153A includes the income tax income (if any) in addition to income originally declared by the petitioner while filing the return u/s 139(1). Meaning thereby, in short, it is as clear as noon of the day that even after filing of the return u/s 153 , in fact, originally declared and demand raised thereon remains alive. There is no statutory provision under the Income Tax Act, 1961, which provides that in case search was conducted/assessment proceeding under Section 153A has been initiated, then, the tax, which remains unpaid by the assessee for the same period, cannot be recovered from the assessee. In the considered opinion of this Court, the ground raised by the petitioner for quashment of notice by taking into account Section 153A does not arise. It is not the case of the petitioner that the notice is without jurisdiction. It is admitted position that till today, no reply to the notice nor any return for the said assessment years as required were furnished before the learned Authority. Even though if any order of assessment or re-assessment is passed, the petitioner is having statutory remedy of appeal. Furthermore, there is time limit prescribed for completion of assessment u/s 153-A. On due consideration of the aforesaid, no case is made out to entertain this writ petition.

Summary

Issues:
Challenge to notices under Section 153A of the Income Tax Act, 1961 and release of seized documents.

Analysis:
1. The petitioner sought to quash notices dated 8.7.2019 issued under Section 153A of the Income Tax Act for multiple Assessment Years and requested the release of seized documents from a search and seizure operation. The petitioner claimed recovery proceedings initiated for previous years and objected to the issuance of notices for subsequent years.

2. The statutory provision under Section 153A of the Income Tax Act, 1961 was examined, which mandates assessment or reassessment in case of a search or requisition. The provision specifies the abatement of pending assessments falling within the six-year period preceding the search or requisition. The Court emphasized the need for a plain reading of the section to understand the abatement provision clearly.

3. The Court noted that the first proviso to Section 153A(1) requires the assessing officer to assess or reassess the total income for each of the six assessment years, while the second proviso states that any pending assessments within the specified period shall abate. The petitioner's contention regarding the abatement of demand raised in response to the notice under Section 153 was addressed.

4. It was highlighted that the absence of a statutory provision preventing the recovery of unpaid taxes during assessment proceedings under Section 153A was crucial. The Court opined that the petitioner's argument for quashing the notice based on Section 153A lacked merit as the notice was not challenged on jurisdictional grounds.

5. The Court observed that the petitioner had not responded to the notice or furnished returns for the assessment years in question. Additionally, the availability of statutory appeal remedies for any assessment or reassessment orders was noted, emphasizing the importance of complying with assessment procedures under Section 153A within the prescribed time limits.

6. After considering the arguments and statutory provisions, the Court concluded that the writ petition lacked merit and dismissed it, finding no grounds to entertain the petition challenging the notices issued under Section 153A of the Income Tax Act, 1961.