2024 (1) TMI 116 - HC - Income Tax

Validity of assessment order passed u/s 147 - Allegation of denial of natural justice - petitioner was issued against a notice on 17.05.2023 and the petitioner asked for further time to 07.06.2023. In the meantime, the impugned assessment order has been passed on 24.05.2023 - addition u/s 69A - demand notice for payment of tax was also annexed with the assessment order and direction was issued to initiate penalty proceedings - HELD THAT - The petitioner admittedly did not filed reply even up to the extended time asked by him up to 20.05.2023. Though the second Show Cause Notice was issued again the petitioner asked time and did not filed reply. It is relevant to take note of the fact that in respect of the first show cause notice the petitioner had asked time up to 20.05.2023 and it was granted to him, which is evident from Exhibit P-8. The petitioner did not file reply and therefore, the Authority was well within its power not to grant further time for the petitioner. Therefore, we find no much substance in the submission that there is violation of the principles of natural justice. Petitioner cannot go on asking for time one after another in response to the show cause notice issued one after another. We do not find any ground to interfere with the impugned order or notice.

Summary

Issues involved:
The issues involved in the judgment are the validity of the assessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961 and the penalty notice issued under Section 274 read with Section 271 (1) (c) of the Income Tax Act, 1961.

Assessment Order:
The assessment in the case was reopened based on high-value cash transactions made by the assessee, totaling Rs. 6.91 crores, with various modes of transactions. The reasons for reopening the assessment were provided to the petitioner, who responded to the notice. The assessment order determined the total taxable income to be Rs. 6,48,29,2113/- with an addition of Rs. 6,36,70,393/- under Section 69A of the Income Tax Act. A demand notice for payment of tax and initiation of penalty proceedings was also issued.

Principles of Natural Justice:
The petitioner requested multiple extensions of time to file replies to show cause notices, but failed to do so within the granted time frames. The Authority was deemed justified in not granting further time due to the petitioner's repeated delays in responding. The Court found no violation of the principles of natural justice, stating that the petitioner cannot keep asking for more time in response to successive show cause notices. The petitioner was advised to pursue the remedy of filing an appeal against the assessment order instead of approaching the Court through a writ petition.

Court's Decision:
The Court did not find grounds to interfere with the impugned order or notice. The petitioner was given permission to file an appeal within fifteen days before the Appellate Authority. During this period, no coercive steps were to be taken against the petitioner regarding the assessment order. The Appellate Authority was instructed to examine the appeal on its merits and any stay application filed along with it. The appeal should be decided on merit without considering the question of limitation, ensuring expeditious handling, preferably within two months from the date of filing the stay application.