2022 (3) TMI 725 - HC - Income Tax

Reopening of assessment u/s 147 - objections against the reasons for reopening - HELD THAT - Bare reading of the relevant extract of web page of the portal indicates about the attachment annexed with the communication dated 10.06.2021, more particularly, under the column view other action, there is reference to view attach document file. The said document is suggestive of the fact that in fact the document in the nature of attachment was very much available on the Income Tax Business Application portal - without going into the aforesaid controversy of service of reasons recorded by the Assessing Officer seeking reopening of the assessment under Section 147 to balance equity we find it appropriate to relegate the writ applicant to submit it s objections along with necessary documents, if any, which the writ applicant may propose to rely, in response to the reasons being produced before this Court. Writ applicant is permitted to approach the respondent Authority to submit the objections against the reasons for reopening of the relevant A.Y. under consideration with necessary documents, if any, within a period of two weeks from the date of receipt of the copy of this order. The writ applicant is at liberty to take all legal contentions as may be permissible in law. On receipt of such objections along with documents, if any, the respondent Authority is hereby directed to look into the matter and take decision in accordance with law. We clarify that even otherwise we have not gone into merits of the legality and validity of the impugned notice.

Summary

Issues:
1. Jurisdiction of the High Court under Article 226 of the Constitution of India regarding notices issued under the Income Tax Act, 1961 for Assessment Year 2013-14.
2. Allegation of non-supply of reasons for reopening assessment by the respondent department.
3. Contentions regarding service of reasons for reopening assessment under Section 147 of the Income Tax Act.
4. Preliminary objection raised by the respondent department regarding the timing of the writ application.
5. Interpretation of the notice dated 18.06.2021 issued under Section 143(2) read with Section 147 of the Income Tax Act.

Analysis:

1. The writ applicant, a Public Limited Company, filed a writ application under Article 226 of the Constitution of India seeking to quash notices dated 31.03.2021 and 18.06.2021 issued under Sections 148 and 143(2) read with Section 147 of the Income Tax Act for Assessment Year 2013-14. The applicant alleged that the reasons for reopening assessment were not supplied, challenging the validity of the notices beyond the four-year period.

2. The respondent department issued notices for reassessment for A.Y. 2013-14 to the applicant, a Public Limited Company engaged in trading and services. The applicant claimed that despite submitting a revised return of income in response to the notice under Section 148, reasons for reopening were not provided, leading to the writ application challenging the notice's validity.

3. The respondent department contended that the reasons for reopening assessment were uploaded on the portal along with a communication dated 10.06.2021. The applicant disputed this claim, stating that no attachment of reasons was served. The High Court directed the applicant to submit objections with necessary documents within two weeks upon receipt of the order, allowing legal contentions while refraining from delving into the merits of the notice's legality.

4. The High Court considered the contents of the notice dated 18.06.2021 and the respondent's submissions regarding the availability of reasons for reopening assessment on the Income Tax Business Application portal. Despite the controversy surrounding the service of reasons, the Court balanced equity by permitting the applicant to submit objections in response to the reasons produced before the Court.

5. Ultimately, the High Court disposed of the petition by directing the applicant to submit objections within two weeks upon receipt of the order, allowing the respondent Authority to review the objections and take a decision in accordance with the law. The Court clarified that it did not assess the legality or validity of the impugned notice, focusing on procedural fairness and the applicant's opportunity to present objections.