2022 (6) TMI 657 - HC - Income Tax

Reopening of assessment u/s 147 - violation of principle of natural justice - HELD THAT - As interfere with the impugned assessment order for the reason that it is an appealable order and further that there is no procedural illegality or infirmity during the impugned reassessment proceeding and in passing the impugned assessment order. The principles of law and guidelines as laid down in the case of GKN Driveshafts (India) Ltd. 2002 (11) TMI 7 - SUPREME COURT has also been fully observed and there is no violation of principle of natural justice in this case since against the impugned notice under Section 148(b) of the Act, recorded reason was furnished to the petitioner. Opportunity to file objection to the same was given. Even draft assessment was served and opportunity to make objection against the same was also furnished to the petitioner. Thereafter the impugned final assessment order has been passed. This Court in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution can consider the decision making process but not the decision itself.

Summary

Issues:
Challenge to impugned assessment order under Section 147 read with Section 144(b) of the Income Tax Act, 1961.

Analysis:
The High Court of Calcutta, in a judgment delivered by Md. Nizamuddin, J., considered a petition challenging an assessment order under Section 147 read with Section 144(b) of the Income Tax Act, 1961. The Court heard arguments from both parties and examined the record. The Court declined to interfere with the assessment order, citing that it was appealable and did not exhibit any procedural irregularities or flaws during the reassessment proceedings or in the issuance of the assessment order. The Court emphasized that the principles and guidelines set by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO & Others (2003) had been duly followed. It was noted that there was no breach of natural justice as the petitioner was provided with the reasons for the notice under Section 148(b) of the Act, given an opportunity to raise objections, served with a draft assessment, and allowed to object to it before the final assessment order was issued.

The judgment highlighted that the Court, in its constitutional writ jurisdiction under Article 226 of the Constitution, could review the decision-making process but not the decision itself. Consequently, the writ petition (WPO NO. 2065 of 2022) was dismissed. However, the dismissal did not preclude the petitioner from pursuing the statutory remedy of filing an appeal in accordance with the law. The Court's decision underscored the importance of following due process and adhering to legal principles in assessment proceedings under the Income Tax Act, maintaining the rights of the parties involved while upholding the rule of law.