2022 (7) TMI 696 - HC - Income Tax

Reopening of assessment u/s 147 - procedure followed by the officer - Petitioner stated that the firm to which the notice has been sent is no longer in existence, as it has been succeeded by a company - HELD THAT - As admitted position that the address of the firm and the company is one and the same. Thereafter, the Assessing Authority has once again issued notice under Section 142(1) of the Act on 09.03.2022 calling upon the company to respond by 11.03.222. Admittedly, the petitioners have not responded to this notice as well. It is in these circumstances that the impugned orders of assessment have come to be passed, on 30.03.2022, 31.03.2022 and 31.03.2022 respectively. No infirmity in the procedure followed by the Assessing Authority and also find that sufficient opportunity has been granted to the assessees to make their submissions and such opportunities have not been availed. The mere filing of letter dated 07.12.2021 will not exonerate the petitioners from not responding to the earlier and subsequent notices issued and it is of the considered view that no infirmity is made out warranting interference in the impugned orders under Article 226 of the Constitution of India.

Summary

Issues:
1. Challenge to three assessment orders for different assessment years under the Income Tax Act, 1961.
2. Mandamus sought for directing the respondents to consider and pass orders on rectification applications under Section 154 of the Act.

Analysis:

Challenge to Assessment Orders:
The petitioners filed Writ Petitions challenging three assessment orders for the assessment years 2015-16, 2016-17, and 2017-18, passed under Section 147 read with Section 144 and Section 144B of the Income Tax Act, 1961. The petitioners were issued notices under Section 148 of the Act on 26.03.2021, followed by a questionnaire under Section 142(1) on 15.11.2021. The petitioners replied stating that the firm mentioned in the notice no longer existed and had been succeeded by a company. Despite subsequent notices, the petitioners failed to respond. The court found no fault in the procedure followed by the Assessing Authority, noting that adequate opportunities were given to the assessees to present their case. The court held that the petitioners' failure to respond to the notices justified the assessment orders, leading to the dismissal of the Writ Petitions.

Mandamus for Rectification Applications:
Separate Writ Petitions were filed seeking mandamus to direct the respondents to consider and pass orders on rectification applications dated 05.05.2022 under Section 154 of the Act. The court directed the respondents to dispose of the rectification applications within sixteen weeks from the date of receipt of the order after hearing the petitioner. Consequently, the Writ Petitions seeking relief for the rectification applications were disposed of in accordance with the court's directive.

In conclusion, the High Court dismissed the Writ Petitions challenging the assessment orders for specified assessment years, citing the petitioners' failure to respond to notices issued by the Assessing Authority. Additionally, the court directed the respondents to dispose of the rectification applications within a specified timeframe, ensuring the timely consideration of the rectification requests under Section 154 of the Income Tax Act, 1961.