2020 (1) TMI 627 - HC - Income Tax

Reopening of assessment u/s 147 - non response to notice by petitioner - HELD THAT - The notice under Section 148 (1) was issued to the Petitioner as early as on 27.03.2019, he did not respond to that notice for over six months nor he invoked the jurisdiction of this Court to challenge the notice on the ground of jurisdiction. He responded to the notice for the first time on 04.10.2019. The conduct of the Petitioner in not filing the return, he was obligated to, in response to the notice under Section 148 (1) and disregarding the notice under Section 148 of the Act, in our view, disentitles the Petitioner to grant of any relief in the present proceedings. The Supreme Court in GKN Driveshafts (India Ltd.) v. Income Tax Officer 2002 (11) TMI 7 - SUPREME COURT has clarified that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file a return and if he so desire, to seek reasons for issuing notices. We therefore dismiss this petition and leave it to the Petitioner to pursue all his pleas in his statutory appeal before CIT (A) against the impugned assessment order.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act and consequential assessment order for AY 2012-13, Jurisdiction of the notice issuing authority, Failure to file income tax return in response to notice under Section 148.

Analysis:

Challenge to Notice under Section 148 and Consequential Assessment Order:
The petitioner filed a writ petition challenging the notice dated 27.03.2019 issued under Section 148 of the Income Tax Act and the subsequent assessment order for AY 2012-13. The petitioner sought a direction to restrain the respondents from taking coercive steps to enforce the demand. The petitioner failed to file the income tax return within thirty days of receiving the notice under Section 148, despite being provided reasons for the reassessment. Subsequent notices were issued under Section 142 (1) for compliance, and the reassessment proceedings were transferred to the jurisdictional Assessing Officer. The petitioner's counsel argued that the notice was issued by a non-jurisdictional officer, while the respondents contended that the officer at Noida had jurisdiction due to the property transaction location. The High Court dismissed the petition, stating that the petitioner's conduct of not filing the return as required by Section 148 and delaying response disentitled him to relief. The court directed the petitioner to pursue statutory appeals before CIT (A) against the assessment order.

Jurisdiction of the Notice Issuing Authority:
The petitioner raised objections regarding the jurisdiction of the notice issuing authority, claiming that the officer was not the jurisdictional officer. However, the respondents argued that the officer at Noida had jurisdiction due to the property transaction location. Citing a previous court decision, the respondents emphasized that the proceedings were transferred to the jurisdictional AO after the initial notice. The High Court found in favor of the respondents, stating that the petitioner's failure to file a return in response to the notice under Section 148 (1) precluded him from raising objections regarding jurisdiction.

Failure to File Income Tax Return in Response to Notice under Section 148:
The petitioner did not file the income tax return within the stipulated period after receiving the notice under Section 148. Despite multiple notices and opportunities for compliance, the petitioner only responded after a significant delay. The High Court held that the petitioner's failure to adhere to the statutory requirements, as outlined in Section 148, deprived him of any relief in the present proceedings. Referring to a Supreme Court decision, the court emphasized that the proper course of action for the notice recipient is to file a return and seek reasons for the notice under Section 148. Consequently, the court dismissed the petition and directed the petitioner to address grievances through statutory appeals before CIT (A).

This detailed analysis of the judgment provides insights into the issues raised, the arguments presented by both parties, and the court's reasoning leading to the dismissal of the petition.