2024 (9) TMI 975 - HC - Income Tax

Maintainability of Writ petition - tax demand notices and orders under the Income Tax Act - as argued when the Appeal was already filed and pending before the 2st Respondent, the aforesaid impugned order made by the 2nd Respondent is totally non application of mind and against the principles of natural justice and therefore seeks to set aside the same - HELD THAT - In the impugned order the 2nd Respondent has clearly stated that if the Petitioner disagrees with the impugned order, he can file the rectification petition u/s 154 of the Act and also directed the Petitioner to pay 20% of demand, if the Appeal is pending. Therefore, the right course to be adopted by the Petitioner is to file a rectification petition under Section 154 of the Act, but without doing so, the Petitioner has approached this Court. Thus, right course to be adopted by the Petitioner is to file a rectification petition under Section 154 - But without doing so, the Petitioner has approached this Court by way of this Writ Petition and therefore this Court is of the view that the Writ Petition filed by the Petitioner is devoid of merits and the same is liable to be dismissed.

Summary

Issues: Challenge to tax demand notices and orders under the Income Tax Act, 1961; Petitioner's compliance with tax notices and appeals; Allegation of non-application of mind and violation of natural justice in passing impugned order; Respondent's contention on filing a rectification petition under Section 154 of the Act.

Analysis:

The petitioner, an agriculturist, challenged an order by the respondent demanding tax payment, alleging that the deposited amounts were not in accordance with the law. The petitioner sold ancestral land, bought a house site, and deposited the remaining money in the bank. The respondent issued multiple notices demanding tax payments, leading to the petitioner filing returns for the assessment year 2017-2018. The petitioner paid taxes as demanded and complied with requests for documents. Subsequently, the respondent issued further notices demanding substantial amounts, leading to an appeal by the petitioner. The impugned order directed the petitioner to pay the demanded amount and file an appeal before the 1st Respondent. The petitioner contended that the order was passed without proper consideration, violating natural justice principles. The respondent argued that the petitioner should file a rectification petition under Section 154 of the Act instead of approaching the court directly. The court noted the impugned order's direction for rectification petition filing and payment of 20% of the demand if the appeal was pending. The court agreed with the respondent's stance that the petitioner should have followed the prescribed procedure of filing a rectification petition under Section 154 before approaching the court, deeming the writ petition devoid of merits and dismissing it. The petitioner was granted liberty to file a rectification petition within 30 days from the date of the order. No costs were awarded, and connected miscellaneous petitions were closed.