2024 (11) TMI 652 - HC - Income Tax

Unconscionable addition as made on the petitioner, as against the returned income - primary grievance being that the case of the petitioner is based on several replies which according to the petitioner made out sufficient justification supporting the returned income as indicated in the return of income, was required to be considered/dealt with by the AO against such addition being proposed to be made by the AO. HELD THAT - This being the primary grievance, we are of the opinon and it is appropriate that all these contentions be permitted to be raised by the petitioner in the proceedings of an appeal which is statutory appeal, which is a remedy available to the petitioner. For such reasons, we are not inclined to adjudicate this petition on merits as an effective statutory remedy to urge all his grievances against the assessment order as also to move an application on stay of the demand, as also the penalty proceedings. The petitioner is permitted to avail of the statutory remedy of filing an appeal against the impugned assessment order which be filed within three weeks from today.

Summary

Issues:
Challenge to assessment order under Section 144B r.w.s. 143(3) of the Income Tax Act, 1961, demand notice under Section 156, and penalty order dated 12.09.2024. Request for writs of Certiorari, Prohibition, and Declaration. Allegation of unconscionable addition of Rs. 266.80 Crores against returned income of Rs. 21.92 lakhs. Disposal of rectification application under Section 154 on 12.09.2024 without considering petitioner's grievances. Relief sought from the Court against assessment order, rectification order, demand notice, and penalty order.

Analysis:
The petitioner filed a petition under Article 226 seeking various reliefs, including quashing the assessment order under Section 144B r.w.s. 143(3) of the Income Tax Act, 1961, the demand notice under Section 156, and the penalty order dated 12.09.2024. The petitioner alleged an unconscionable addition of Rs. 266.80 Crores against the returned income of Rs. 21.92 lakhs. The petitioner moved a rectification application under Section 154 on 25.04.2024, claiming that the Assessing Officer did not consider the submissions made in detailed replies while passing the assessment order on 31.03.2024. However, the rectification application was disposed of on 12.09.2024 without addressing the petitioner's grievances, merely stating the availability of an appeal remedy.

The Court noted that the assessment, making a substantial addition against the returned income, raised valid concerns. The petitioner contended that their justifications in the replies were not considered by the Assessing Officer. The Court refrained from delving into the merits of the petition, emphasizing the availability of a statutory remedy through an appeal to address all grievances against the assessment order, rectification order, demand notice, and penalty order. Consequently, the Court permitted the petitioner to file an appeal within three weeks, along with a stay application, staying coercive actions until the application's decision. The Court kept all contentions open for the appellate proceedings.

The Court disposed of the petition without costs, allowing the petitioner to raise all arguments in the appellate process. It also granted a further protection of four weeks if the stay application was decided against the petitioner, emphasizing the appellate authority's consideration of all contentions. The judgment emphasized the importance of utilizing statutory remedies available to address grievances and seek redressal through the appropriate legal channels.