2017 (3) TMI 147 - HC - Income Tax

Reopening of assessment - investigation conducted by the Central Excise authorities - Held that - The petitioner is approaching this Court in a second inning. Its previous attempt to seek an order quashing the reassessment notice failed as this Court was satisfied that the reasons furnished as well as the consequential order dated 08.08.2016, could stand the scrutiny of law. In the circumstances, its reiteration and regurgitation as it were on the grounds assailing the reassessment notice are precluded. The reliance on the decisions in the opinion of the Court is not appropriate because none of them disclose that the petitioner had approached the Court on an earlier occasion and were permitted to reiterate the same grounds at the completion of the assessment. As far as the validity of the assessment goes, the Court notices that a number of hearings took place before the AO, who called for the documents not at one go, but at least at two separate occasions. The proceedings completed on 15.11.2016 and in the circumstances, the petitioner s complaint that it was deprived of an opportunity to cross examine is hardly a matter for this Court to exercise its writ jurisdiction. It is not in every case where violation of natural justice is complained of that the Court exercises its special jurisdiction to intervene in the proceedings; nothing was shown that the existing appellate remedy of an appeal to the Commissioner would in any manner be inadequate to address the situation. Similar complaints are made before the Commissioner in several cases, in a routine manner - i.e., of denial of natural justice, denial of opportunity of cross-examination etc. Thus there is no special feature warranting exercise of discretion

Summary

Issues:
Challenge to validity of reassessment proceedings under Section 147/143(3) of the Income Tax Act, 1961 due to lack of proper opportunity of hearing and prevention from producing relevant records in earlier assessment proceedings.

Analysis:
The petitioner challenged the order dated 20.12.2016 made under Section 147/143(3) of the Income Tax Act, 1961, alleging lack of proper opportunity of hearing and prevention from producing all relevant records in the earlier assessment proceedings. The reassessment notice for AY 2009-10 was issued to the petitioner based on an investigation by Central Excise authorities. The petitioner contended that the matter was dropped by the Central Excise authorities, which formed the basis of challenging the reassessment proceedings. The petitioner approached the Court seeking to quash the reassessment notice, which was later withdrawn with liberty to raise contentions before the revenue authority. The Revenue had rejected objections to reassessment before the petitioner approached the Court, leading to further proceedings. The petitioner was asked to produce documents under Section 142 of the Act, which were submitted on various dates. The petitioner argued that the reassessment was erroneous as the rationale for reassessment ceased to exist with the closure of Central Excise proceedings. The petitioner also claimed denial of an opportunity to cross-examine, vitiating the assessment proceedings.

The Court noted that multiple hearings took place before the Assessing Officer, where documents were requested on separate occasions. The petitioner's complaint of being deprived of an opportunity to cross-examine was deemed insufficient for the Court to intervene through its writ jurisdiction. It was emphasized that not every violation of natural justice warrants the Court's intervention, especially when existing appellate remedies could address the situation adequately. The Court highlighted that complaints of denial of natural justice and cross-examination are routinely addressed before the Commissioner in appeal cases. Therefore, the Court found no special circumstances necessitating its intervention and dismissed the writ petition, emphasizing the availability of appellate remedies to address the petitioner's grievances effectively.