2022 (1) TMI 791 - HC - Income Tax

Order passed by invoking Section 144 read with Section 69A - as submitted that the petitioner has an alternate remedy by way of an appeal under Section 246A - HELD THAT - The impugned order has not discussed the records furnished by the petitioner to distance himself from the entire liability. Therefore, to that extent, the impugned order can be interfered by remitting the case back to the respondent to pass a proper assessment order. However, it is noticed that the petitioner has himself offered to pay the tax under Section 44AD of the Income Tax Act, 1961 on the undiscussed income. Considering the above, the impugned order is set aside subject to the petitioner paying tax as per the computation under Section 44AD of the Income Tax Act, 1961 within a period of six weeks from the date of receipt of a copy of this order. After the petitioner deposits the admitted tax under Section 144AD of the Income Tax Act, 1961, the respondent shall pass a fresh assessment order on merits and in accordance with law within a period of four weeks thereafter.

Summary

Issues:
Challenge to Assessment Order based on lack of consideration of documents, invocation of Section 144 and 69A of Income Tax Act, 1961, reliance on previous court decisions, failure to maintain proper records, availability of alternate remedy through appeal.

Analysis:
The petitioner challenged the Assessment Order dated 28.09.2021, claiming it was passed without considering documents proving the petitioner's role as a middleman in bank auctions for tractors financed to defaulting farmers. The petitioner argued that certificates from buyers confirmed no tax liability awareness under the Income Tax Act, 1961. The petitioner sought to quash the order invoking Section 144 and 69A of the Act.

The petitioner's counsel referred to a previous court decision in a similar case to support the challenge. The petitioner also mentioned a case involving a worker under a rural employment scheme where relief was granted, urging for similar consideration.

The respondent contended that the petitioner received a notice under Section 148 but failed to file returns or reply promptly. Due to lack of proper records, the respondent justified invoking Section 69A and 144AD of the Act. The respondent highlighted the availability of an appeal under Section 246A before the Commissioner of Income Tax (Appeals).

The judge noted the absence of discussion on records distancing the petitioner from liability in the impugned order. The judge decided to set aside the order, subject to the petitioner paying tax under Section 44AD of the Act on the undisclosed income within six weeks. Once the tax is paid, the respondent was directed to pass a fresh assessment order within four weeks.

In conclusion, the Writ Petition was disposed of with the above directions, with no costs imposed. The connected Writ Miscellaneous Petition was closed accordingly.