2022 (9) TMI 520 - HC - Income Tax

Exemption u/s 11 - income from the trust was drawn by the trustee and evidences for the applications were not produced, the AO treated them as violation u/s. 13(1)(c) and hence denied the exemption - petitioner instructed to pass all contemporaneous, primary and secondary evidence in support of his claim before the Assessing Officer to pass Appropriate Orders after giving adequate opportunity to the assessee - HELD THAT - The order 2020 (8) TMI 912 - ITAT CHENNAI makes it clear that it is for the petitioner to file all the required documents. If such documents were filed by the petitioner in time, the respondent would have been required to consider the same and pass appropriate orders. Instead the petitioner has waited for the respondents to issue a Draft Assessment Order and the Show Cause Notice dated 17.09.2021. Though the Income Tax Web Portal was experiencing technical glitches and is stated to be the petitioner's inability to upload the information, there are no records to substantiate the same. The impugned order has been passed after the information called for by the respondent vide notice dated 20.02.2021 and the reminder notice dated 17.08.2021 were not fully complied. Though these notices were issued, nothing precluded the petitioner earlier from sending the information pursuant to the direction of the Tribunal 2020 (8) TMI 912 - ITAT CHENNAI No merits in this Writ Petition. Therefore this writ petition is liable to be dismissed. Liberty is however given to the petitioner to file a Statutory Appeal before the Appellate Commissioner under Section 246 A of the Income Tax Act, 1961 within a period of thirty days(30) from the date of receipt of a copy of this order. If such appeal is filed by the petitioner, the Appellate Commissioner shall entertain and dispose the same in accordance with law and on merits within a period of three months from the date of receipt of a copy of this order. The petitioner is also given liberty to file appropriate application before the respondent under Section 220(6) of the Income Tax Act, 1961 for staying the recovery of the proceedings.

Summary

Issues:
Challenge to Impugned Assessment Order for Assessment Year 2009-2010 due to lack of opportunity to upload required information for tax exemption under Income Tax Act, 1961.

Analysis:

1. Opportunity to Upload Information:
The petitioner challenged the Impugned Assessment Order dated 25.09.2021, claiming inadequate opportunity to upload necessary information for tax exemption. The petitioner cited technical glitches on the Income Tax Web Portal as the reason for non-compliance despite efforts to notify the authorities.

2. Respondent's Submission:
The Senior Standing Counsel for the respondents argued that the technical issues were resolved by July and August 2021, and the petitioner's inability to upload information cannot be justified. The respondent highlighted that the petitioner did not mention this issue in the affidavit, suggesting that the main grievance was the hurried passing of the order.

3. Principles of Natural Justice:
The Senior Standing Counsel pointed out notices issued under Section 142(1) of the Income Tax Act, 1961, emphasizing that the petitioner had prior opportunities to provide the required information. The respondent contended that there was no violation of Principles of Natural Justice and that the petitioner's claim for exemption lacked substantiation.

4. Alternate Remedy:
Moreover, the respondents argued that the petitioner had an alternate, more efficacious remedy available, indicating that the writ petition should be dismissed on this ground as well. The Senior Standing Counsel highlighted the dispute's relevance to the Assessment Year 2009-2010 as an additional reason for dismissal.

5. Judicial Decision:
In the final judgment, the court dismissed the writ petition, stating that there were no merits to support the petitioner's claims. The petitioner was granted liberty to file a Statutory Appeal before the Appellate Commissioner within thirty days. Additionally, the petitioner could seek a stay on recovery proceedings under Section 220(6) of the Income Tax Act, 1961, with considerations for the petitioner's previous inability to upload information promptly.

6. Conclusion:
The court's decision emphasized that the petitioner had sufficient opportunities to provide the necessary documentation for tax exemption, and the technical issues on the Income Tax Web Portal did not absolve the petitioner of this responsibility. The judgment highlighted the importance of timely compliance with tax requirements and the availability of statutory appeal mechanisms for addressing grievances.