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2022 (7) TMI 697 - HC - Income TaxNotice seeking reopening of assessment and penalty challenged - bar to the entertainment of a writ petition - Valid proof of breach of principles of natural justice or fair play - respondents, submitted that an assessment order was made on 30.03.2022 in pursuance of the impugned notices Petitioner has an alternate and efficacious remedy available to them to challenge the assessment order; therefore, this petition may not be entertained - HELD THAT - We think this is not a fit case for exercise of our extraordinary and equitable jurisdiction, particularly since the assessment order has already been made in pursuance of the impugned notices, and the Petitioner has an alternate and efficacious remedy of appeal against such assessment order. The records do not make out a prima facie case of breach of principles of natural justice or fair play. The impugned notices may have been marked to PAN number, which the Petitioner claims it had already surrendered. However, the record also bears out that the impugned notices were served on the Petitioner's Chartered Accountant through email. Moreover, this email Id was registered by the Petitioner with the Income Tax Department for service of notices. Therefore, Ms. Linhares's contention that the Petitioner is only attempting to create some grounds to allege the failure of principles of natural justice eventually cannot be lightly brushed aside. There is nothing like a technical breach of the principles of natural justice. At least some prejudice will have to be demonstrated. Respondents have produced documentary material on record that at least prima facie indicates that cash deposits of an amount of Rs. 27,74,53,108/- were made in the Petitioner's bank account as against the PAN number that the Petitioner claims to have already surrendered. Additionally, in the affidavit filed by the Assistant Commissioner of Income Tax, it is asserted that even after 2012, PAN was used by the Petitioner for regularly conducting business transactions. There is also a statement that all notices were sent through the registered email Id quoting this PAN. Ms. Linhares maintained that even the assessment order had been validly served on the Petitioner. However, without prejudice and based on the instructions she submitted, the respondents would upload the assessment order against PAN (AAACC9272H) to enable the Petitioner to appeal the assessment order dated 30.03.2022 within seven days from today. However, she clarified that this was without prejudice to her contention about the earlier good service. We dismiss this petition but grant liberty to the Petitioner to appeal the assessment order dated 30.03.2022 on all grounds, including the grounds now raised in this petition, subject no doubt to all legal objections that the respondents might have in the matter. We clarify that the observations in this order are only prima facie and in the context of considering whether to entertain this petition or relegate the Petitioner to avail of the alternate remedy. Therefore, if the Petitioner does appeal the assessment order dated 30.03.2022, such appeal will have to be decided in accord with law and on its own merits without being unduly influenced by the prima facie observations that we have made in this order.
Issues:
Challenge to notice seeking to reopen assessment and penalty notices based on reassessment notices for AY 2013-2014. Analysis: The petitioner challenged the notice seeking to reopen the assessment and penalty notices based on reassessment notices for the assessment year 2013-2014. The respondent argued that the petitioner had an alternate and efficacious remedy available to challenge the assessment order and, therefore, the petition should not be entertained. The petitioner contended that there was a breach of principles of natural justice and fair play, as the assessment order was uploaded against a PAN that did not pertain to the petitioner but to a non-existent company. The petitioner further argued that despite surrendering the PAN, the impugned notices were served in the name of the non-existent company. The petitioner also highlighted that the objections raised were not adequately considered, and the assessment order ignored their contentions. The respondent claimed that the impugned notices were duly served on the petitioner's Chartered Accountant through email, as per the details provided by the petitioner to the Income Tax Department. They argued that the petitioner was attempting to create grounds for alleging a failure of natural justice without suffering any prejudice. The respondent also pointed out several cash deposits against the surrendered PAN, which the petitioner claimed to have deactivated. The respondent contended that the petitioner failed to disclose these details, indicating that the petition should not be entertained and the petitioner could appeal the assessment order. The court, after considering the arguments, held that it was not a fit case for the exercise of extraordinary jurisdiction, as the assessment order had already been made, and the petitioner had an alternate remedy of appeal. The court found no prima facie case of breach of natural justice, as the impugned notices were served on the petitioner's Chartered Accountant through the registered email ID. The court also noted documentary evidence of cash deposits in the petitioner's bank account against the surrendered PAN. The court referred to legal precedents to distinguish the petitioner's arguments and ultimately dismissed the petition but granted liberty to appeal the assessment order on all grounds, subject to legal objections. The court clarified that its observations were prima facie and should not unduly influence the appeal process.
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