2024 (8) TMI 50 - HC - Income Tax

Reopening of assessment u/s 147 - time for completing the assessment under Section 153 - as submitted petitioner may be given one opportunity to explain the position before the first respondent - respondent submit that the Writ Petition is liable to be dismissed, as the petitioner has an alternate remedy before the Appellate Commissioner u/s 246(A) HELD THAT - Petitioner can be granted a partial relief by setting aside the impugned order explaining the position as to the limitation. In case, the petitioner succeeds on limitation, the demand that has been proposed may be dropped. On the other hand, in case, the Officer has come to a conclusion during the hearing that no case is made out for dropping the assessment on account of limitation, the petitioner shall be ready to make submissions on merits. The first respondent shall pass suitable order on merits as expeditiously as possible, preferably, within a period of six months from the date of receipt of a copy of this order. Needless to state, the petitioner is at liberty to file additional written submissions. The petitioner shall also be heard before passing final orders. The petitioner shall also co-operate with the first respondent.

Summary

Issues:
Challenge to Assessment Order dated 27.03.2023 for the Assessment Year 2013-2014; Dispute under Section 148 of the Income Tax Act, 1961; Constitutional validity of the Notification issued under the Taxation and Other Laws Act, 2020; Time limitation for completing assessment under Section 153 of the Income Tax Act, 1961.

Analysis:
The petitioner challenged the Assessment Order for the year 2013-2014, related to the sale of properties purchased in 2007. The properties were sold pursuant to a court order, leading to an income tax dispute under Section 148 of the Income Tax Act, 1961. The petitioner had previously challenged the constitutional validity of a notification under the Taxation and Other Laws Act, 2020. The petitioner argued that the assessment completed by the respondent was time-barred, considering the impact of the Covid-19 Pandemic and relevant legislation extending the assessment period.

The petitioner sought relief based on the limitation issue, requesting an opportunity to explain the position before the first respondent. The respondents contended that the petitioner had an alternative remedy before the Appellate Commissioner under Section 246(A) of the Income Tax Act, 1961. They argued that the notice served on 01.04.2021 extended the assessment completion deadline to 31.03.2023, rendering the writ petition without merit.

The Court granted partial relief to the petitioner, setting aside the impugned order to address the limitation issue. If the petitioner succeeds on limitation, the proposed demand may be dropped; otherwise, the petitioner must make submissions on merits. The first respondent was directed to pass suitable orders on merits within six months from the date of the Court's order. The petitioner was allowed to submit additional written arguments and would be heard before the final orders were issued, emphasizing cooperation with the first respondent.

In conclusion, the Court disposed of the writ petition with no costs, providing specific directions for further proceedings and emphasizing the petitioner's right to file additional submissions and be heard before final decisions were made.