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2024 (2) TMI 929 - HC - Income TaxValidity of reopening of assessment - as argued reasons for re-opening the assessment were not provided - Assessment was completed u/s 147 r.w.s 144 for non-compliance and non filing of return - whether the impugned assessment order should be interfered with in exercise of discretionary jurisdiction? - HELD THAT - Re-assessment proceedings commence with a notice calling upon the assessee concerned to file the return of income. Upon receipt of said notice, assessee had two options. The first option was to file a revised return of income and request for reasons for re-opening the assessment. The second option was to inform the assessing officer that the original return of income may be treated as the return in response to the notice u/s 148. If the second option had been availed of, it would still have been open to the petitioner to request for reasons for re-opening the assessment as per principles laid down in Tiwari Kanhaiya Lal and S.G.Portfolio. The petitioner did not, however, resort to either option. Thereafter, AO issued notice u/s 142(1) calling upon the assessee to produce the documents specified in such notice. The annexure to the notice indicates that the petitioner did not comply with the notice u/s 148. Upon receipt of this notice, the petitioner replied asking for reasons for reopening the assessment and attached certain documents, while requesting for further time to submit other documents. This communication was issued more than six months after receipt of notice u/s 148. As contended if the petitioner had provided a revised return of income or called upon the assessing officer to treat the original return of income as the return in response to notice u/s 148, the petitioner would have been entitled to challenge the proceedings on the ground that reasons for re-assessment were not provided, but not otherwise. The impugned order does not warrant interference on the ground that principles laid down in GKN Driveshafts 2002 (11) TMI 7 - SUPREME COURT were not complied with. For the same reason, i.e. non-filing of return, and the consequential assessment on best judgment basis u/s 144, the impugned order does not call for interference in exercise of discretionary jurisdiction on the ground of non-issuance of notice u/s 143(2). Referring to the statements on which reliance was placed in the impugned order - As with regard to the execution of civil work, the petitioner stated that she did not have the experience in mass excavation and sandfilling. Her husband said that he too did not possess the requisite experience and that the sub-contractors had the experience. One of the sub-contractors, M/s.Meenakshi Timber Plywood, issued a statement that the work was executed by the proprietary concern of the petitioner, thereby completing a circle leading back to the petitioner. The impugned order was also assailed on the ground that no opportunity to cross-examine Mr. Manuel Joseph was provided. As stated earlier, Mr.Manuel Joseph stated that he did not have experience in mass excavation and sand filling. In those circumstances, the denial of the request for cross-examination does not warrant interference under Article 226. Undoubtedly, in cases where the assessee concerned is able to provide some indication of real prejudice, not providing the opportunity to cross-examine would justify interference while exercising discretionary jurisdiction, but not otherwise. Petitioner assailed the impugned order was that a remand should not be made for a second time and that the time limit for issuing the assessment order was close to expiring when the assessment order was issued - The broad proposition that there should be no remand for a second time is not supported by statute or precedent and, in any event, on account of conclusions recorded earlier, the petitioner cannot succeed on this basis. Petitioner was provided a reasonable opportunity to place on record evidence of execution of civil work (mass excavation and sand-filling), such as contracts for hiring excavation and other equipment, running account and final bill, proof of payment by the employer, contracts with sub-contractors, running account and final bills of sub-contractors, proof of payment to sub-contractors, and the like - Apart from producing work orders, photographs and the offer letter of employment of Mantri Developers Private Limited, the petitioner did not place any other evidence on record leading to the inference in the impugned order that no proof of carrying out work was submitted by the assessee. In these facts and circumstances, conclude that there is no justification for exercising discretionary jurisdiction. The impugned assessment order does not warrant interference under Article 226 of the Constitution of India.
Issues Involved:
1. Non-provision of reasons for re-opening the assessment. 2. Non-provision of statements relied upon by the assessing officer. 3. Denial of opportunity to cross-examine the petitioner's husband. 4. Non-issuance of notice under Section 143(2) following Section 142(1) notice. 5. Timeliness and procedural fairness of the assessment order. Summary: 1. Non-provision of reasons for re-opening the assessment: The petitioner contended that the reasons for re-opening the assessment were not provided, violating the Supreme Court's directive in GKN Driveshafts (India) Ltd v. Income Tax Officer. The Court noted that under Section 148, the petitioner had the option to file a revised return or request that the original return be treated as the response to the notice, which the petitioner did not do. Consequently, the impugned order does not warrant interference on this ground. 2. Non-provision of statements relied upon by the assessing officer: The petitioner argued that the statements, particularly from M/s.Meenakshi Timber & Plywood, were not provided. The Court examined the statement and found it indicated that the petitioner's proprietary concern executed the work. Thus, the Court concluded that no prejudice was caused to the petitioner by not providing the statement. 3. Denial of opportunity to cross-examine the petitioner's husband: The petitioner's husband stated he had no experience in mass excavation and sand filling. The Court held that the denial of cross-examination did not warrant interference under Article 226, as no real prejudice was demonstrated by the petitioner. 4. Non-issuance of notice under Section 143(2) following Section 142(1) notice: The petitioner contended that the notice under Section 142(1) was not followed by a notice under Section 143(2). The Court noted that due to the non-filing of the return, the assessment was made on a best judgment basis under Section 144, and thus, the impugned order does not call for interference on this ground. 5. Timeliness and procedural fairness of the assessment order: The petitioner argued that the assessment order was issued five days before the court-imposed deadline and that a second remand should not be made. The Court found no statutory or precedential support for the broad proposition against a second remand and concluded that the petitioner was provided a reasonable opportunity to present evidence. Thus, the assessment order does not warrant interference. Conclusion: The impugned assessment order dated 16.12.2021 does not warrant interference under Article 226 of the Constitution of India. The petitioner is advised to file a statutory appeal. Consequently, the challenge to the penalty order also fails. Both writ petitions are dismissed, and connected miscellaneous petitions are closed.
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