2023 (10) TMI 208 - HC - Income Tax

Validity of reassessment proceeding - notice issued solely on the basis of the statement obtained from the petitioner during the course of survey u/s 133A - HELD THAT - This Court finds that there is merit in the submission made by the learned counsel for the respondent that the writ petitions at this stage is premature and thus ought not to be entertained. It is open to the petitioner to raise all its objection and place reliance on the judgment referred and circular before the assessing authority who shall consider the same while passing the orders of assessment. It is made clear that while completing the assessment, the assessing authority shall afford reasonable opportunity in accordance with law. Needless to state that if the petitioner were to raise the jurisdiction of the assessing officer to make assessment solely on the basis of statement obtained under Section 133A of the IT Act, the same would be dealt with.

Summary

Issues involved: Challenge to impugned assessment notices for the assessment years 2015-16, 2016-17, and 2017-18 based on statements obtained during a survey under Section 133A of the Income Tax Act, 1961.

Summary:

Facts Overview:
The petitioner, a company trading carbon and alloy steel iron bars, had a survey under Section 133A of the IT Act on its premises where statements were obtained. The petitioner initially offered a low net profit percentage but later retracted the statement. Notices were issued under Section 148 of the IT Act based on the initial statement, leading to objections from the petitioner.

Petitioner's Argument:
The petitioner challenged the assessment notices, arguing that making assessments solely based on statements under Section 133A is improper. Reference was made to a previous court judgment highlighting the importance of giving the assessee an opportunity to correct any incorrect admissions.

Respondent's Argument:
The respondent contended that objections should be raised before the completion of assessment and that the petitioner can present all objections during that stage.

Court Decision:
The court found merit in the respondent's submission that the writ petitions were premature. The court directed the petitioner to raise objections before the assessing authority, who should consider them during the assessment process. The assessing authority was instructed to provide a reasonable opportunity and address any jurisdictional issues raised by the petitioner during the assessment.

Conclusion:
The writ petitions were disposed of with the direction for the assessing authority to address the petitioner's objections during the assessment process. No costs were awarded, and connected miscellaneous petitions were closed.