2024 (6) TMI 1405 - HC - Income Tax

Validity of assessment order passed u/s 143(3) in regard to issue of freight income - violation of natural justice - respondent had mentioned that the assessee had not submitted any bills and vouchers with respect to the freight outward - impugned order indicates that the respondent had assessed that the petitioner had earned freight income as freight receipts from its own trucks - respondent contends that the Writ petition is not maintainable and that the petitioner has a remedy of appeal to the CIT(A) u/s 246 HELD THAT - It is settled law that if there is a violation of principle of natural justice, existence of alternative remedy is not a bar to entertain the writ petition. Prima facie, we are satisfied that there has been violation of principle of natural justice and that the petitioner had not been informed about the respondent s proposed action of estimating the freight income, either during the course of hearing or in the show cause notice, particularly when the respondent appears to have ignored the material submitted by the petitioner along with its reply through Annexure-V. Therefore, there shall be interim stay of recovery of only from the petitioner, until further orders. List on 13th August, 2024.

Summary

The High Court of Himachal Pradesh exempted the petitioner from filing certain copies at this stage but directed to file them within seven days. The court found a violation of natural justice in the assessment order passed by the respondent under the Income Tax Act and granted an interim stay on the recovery of Rs. 4,85,61,534 from the petitioner. The case is listed for further hearing on August 13, 2024.