2020 (1) TMI 1101 - HC - Income Tax

Availability of alternative remedy - HELD THAT - Court is of the view that petitioner may file appeal under Section 246-A of the Act before the first appellate authority against the assessment order dated 28.12.2019 within a period of four weeks from today. It is also open to the petitioner to file an application for stay along with the appeal in which event the same shall be considered by the appellate authority in accordance with law.

Summary

Issues:
Challenge to the legality and validity of the assessment order under the Income Tax Act, 1961 without notice or hearing to the petitioner.

Analysis:
The petitioner challenged the legality and validity of the assessment order dated 28.12.2019 under Section 143(3) of the Income Tax Act, 1961, concerning the assessment year 2012-13. The petitioner contended that a substantial sum was added to their income without notice or hearing, related to the receipt of share premium. The petitioner argued that the addition lacked proper deliberation by the Assessing Officer and violated principles of natural justice by not providing an opportunity to be heard.

Analysis Continued:
The standing counsel for respondent Nos.1 and 2 raised a preliminary objection regarding the petitioner not availing the alternative remedy before filing the petition. The petitioner's counsel, however, emphasized the violation of natural justice and the necessity to challenge the addition. The Court acknowledged the petitioner's intention to contest the addition through the statutory appeal process but directed the petitioner to file an appeal under Section 246-A of the Act within four weeks.

Analysis Continued:
The Court ordered that the assessment order dated 28.12.2019 would be kept in abeyance until the first appellate authority decides on the application for stay. The Court clarified that it had not expressed any opinion on the merit of the case, keeping all contentions open for further proceedings. Additionally, if the appeal order went against the petitioner, a similar abeyance period of two weeks would be granted to avail the statutory remedy.

Analysis Continued:
The writ petition was disposed of, allowing the petitioner to pursue the statutory remedy provided under the Act. The judgment emphasized the importance of following due process and providing opportunities for appeal, ensuring fairness and adherence to legal principles in tax assessments.