2021 (10) TMI 172 - HC - Income Tax

Best judgment assessment u/s 144 - Valid notice issued u/s 142(1)(i) or not - proof of communication of notices and the draft assessment order - HELD THAT - Revenue has produced the original file and photocopies of the relevant documents in the form of a typed set of papers from which, we find that the notice dated 14.02.2018 issued under Section 142(1)(i) of the Act was sent by Registered Post with Acknowledgement and has been received by the assessee on 24.02.2018. The hearing notice dated 20.05.2019 was also sent by Registered Post with Acknowledgement and the appellant-assessee has received the same on 25.05.2019. By a communication dated 16.09.2019, the Assessing Officer communicated the draft assessment order under Section 144 of the Act and gave one final opportunity to the assessee to file his explanation, if any, by 27.09.2019. This was communicated by Registered Post with Acknowledgement and received by the assessee on 27.09.2019. Thus, the notices and the draft assessment order have been communicated to the appellant and the appellant, despite having received the same, has not cooperated with the assessment proceedings and therefore, we find that there is no error in the order passed by the learned Writ Court. Writ Appeal fails and is dismissed - we grant liberty to the appellant-assessee to file an appeal before the Commissioner of Income Tax (Appeals), within a period of 30 days from the date of receipt of a copy of this judgment.

Summary

Issues:
Challenge to best of judgment assessment under Section 144 of the Income Tax Act, 1961 based on non-participation in assessment proceedings.

Analysis:
The appellant-assessee challenged the best of judgment assessment order dated 26.11.2019 under Section 144 of the Income Tax Act, 1961, contending that despite receiving notices, they did not participate in the assessment proceedings. The Single Bench dismissed the Writ Petition citing the appellant's non-cooperation. The Writ Appeal was heard to determine if the appellant was served with the necessary notices and draft order. The court emphasized the importance of proof of service under Section 142(1) of the Act to proceed under Section 144. The Revenue was directed to produce records to establish the service of notices.

The Revenue provided the original file and relevant documents, demonstrating that the notice dated 14.02.2018 under Section 142(1)(i) was sent via Registered Post and acknowledged by the assessee on 24.02.2018. Similarly, the hearing notice dated 20.05.2019 and the draft assessment order dated 16.09.2019 were also sent by Registered Post and duly received by the appellant. Despite receiving these notices, the appellant did not cooperate with the assessment proceedings. Consequently, the court found no error in the order passed by the Writ Court, upholding the best of judgment assessment.

In conclusion, the Writ Appeal was dismissed, and the appellant was granted liberty to file an appeal before the Commissioner of Income Tax (Appeals) within 30 days from the date of receipt of the judgment copy. The appellate authority was instructed to entertain the appeal without rejecting it on the grounds of limitation. No costs were awarded in this matter, and the connected miscellaneous petition was closed.