2021 (11) TMI 574 - HC - Income Tax

Validity of assessment - violation of the principles of natural justice as the assessee did not have adequate opportunity to explain to the Assessing Officer voluminous documents, which were presented by the assessee at the time of assessment - HELD THAT - Admittedly, the Income Tax Act is a Code by itself and it provides for hierarchy of remedies. The contention both before the learned Single Judge as well as before us is that the assessee did not have adequate opportunity to explain the voluminous documents. On the other hand, the Assessing Officer would submit that adequate opportunity was granted and the assessee represented by their authorized representative was heard. Whether appreciation of the documents was done or not and whether there was sufficient opportunity granted to the assessee or not are all issues, which can be canvassed before the First Appellate Authority and we find that there is no valid reason for the assessee to bypass a statutory appeal remedy. Therefore, we are not inclined to interfere with the impugned order before us. The above writ appeal is dismissed. The liberty granted to the assessee by the learned Single Judge in paragraph 24 of the order impugned is sustained.

Summary

Issues:
Challenge to assessment order based on violation of principles of natural justice and availability of alternate remedy.

Analysis:
The appellant challenged the assessment order dated 30.12.2010 for the year 2007-08, primarily on the ground of violation of the principles of natural justice. The appellant claimed that there was a lack of adequate opportunity to explain voluminous documents presented during the assessment process. The appellant argued that the officer who passed the assessment order rushed through the matter without affording proper opportunity to the assessee. In response, the respondents contended that notices were issued by both the earlier and new officers, and the authorized representative of the assessee appeared on various dates and affixed signatures in the assessment file, indicating that adequate opportunity was provided. The Single Judge disposed of the writ petitions citing the availability of an alternate remedy.

Upon careful consideration, the High Court agreed with the Single Judge's decision. The Court emphasized that the Income Tax Act provides for a hierarchy of remedies, and issues regarding the adequacy of opportunity and appreciation of documents can be raised before the First Appellate Authority. The Court noted that the contention of inadequate opportunity could be addressed through the statutory appeal remedy, and there was no valid reason for the assessee to bypass this route. Therefore, the High Court declined to interfere with the impugned order and dismissed the writ appeal.

In the final judgment, the High Court upheld the liberty granted to the assessee by the Single Judge and provided a specific timeline for filing an appeal before the First Appellate Authority. The Court ordered that the period from the date of filing the writ petition till the receipt of the judgment's certified copy would be excluded when computing limitation for the appeal. The appellant was granted two weeks from the receipt of the judgment's copy to file the appeal, and during this period, no coercive action could be taken by the respondents against the appellant. The Court concluded by stating that no costs were to be incurred, and the connected CMP was also dismissed.