2019 (2) TMI 1279 - HC - Income Tax

Notice issued by the authorities under Section 142 (1) - HELD THAT - The petitioner received the notice only in the afternoon of 27.12.2018, though the hearing was supposed to be at 11 Am. As an element of bonafide conduct on the petitioner s part, notice that the very next day the petitioner filed its objections and sought ten more days time. Perhaps to avoid the technical tangles, the respondent authority completed the assessment proceedings by 31.12.2018. It will only serves the interest of justice if the petitioner is given one more opportunity. I, therefore, set aside the Ext.P6 assessment order and remand the matter to the respondent for fresh adjudication. Standing Counsel proposes that if the Court fixes a date, the Income Tax Officer will take up the matter on that date, when the petitioner s representative could appear before the authority. I reckon the proposal is feasible. Therefore, as a matter of mutual convenience for the parties, fix 26.02.2018 as the date of hearing before the Income Tax Officer.

Summary

Issues: Assessment proceedings under the Income Tax Act for a public religious trust for the assessment year 2016.

Analysis:
The petitioner, a public religious trust, filed its income tax return for the assessment year 2016. Subsequently, in response to a notice under Section 142(1), the petitioner submitted a detailed reply. However, the petitioner received another notice under Section 143(2) requiring the production of vouchers and bills to support the return and explain certain additions. The petitioner claimed to have received this notice only in the afternoon of the scheduled hearing date, despite it being set for 11 AM. The petitioner promptly submitted objections the next day and requested ten more days to produce documents. The assessment was completed by the respondent authority on 31.12.2018, potentially to avoid issues related to limitation.

The High Court acknowledged that the petitioner received the notice late and acted promptly by filing objections the next day. Recognizing the petitioner's bona fide conduct, the Court noted that the assessment proceedings were completed by the respondent authority by 31.12.2018. In the interest of justice, the Court set aside the assessment order and remanded the matter to the respondent for fresh adjudication, providing the petitioner with another opportunity.

The Court accepted the proposal by the learned Standing Counsel that the Income Tax Officer would take up the matter on a fixed date, allowing the petitioner's representative to appear before the authority. To facilitate mutual convenience, the Court fixed a date for the hearing before the Income Tax Officer, without the need for further notice. The petitioner's representative was instructed to appear on the specified date, after which the authority would proceed with the matter. The writ petition was disposed of accordingly, providing the petitioner with a chance for fresh adjudication in the assessment proceedings.