2023 (11) TMI 506 - HC - Income Tax

Validity of order passed u/s 144 r.w.s. 147 - personal account has been attached by the Income Tax authorities - petitioner s case that therefore none of the notices that were sent by the Assessing Officer (A.O.) was received by petitioner - Husband of assessee died who was the only other director carrying on the business entirely and company was effectively non functional - HELD THAT - Notices that were sent to petitioner came back undelivered with the endorsement Left . The AO it appears from the impugned order, was racing against time because the matter would have got time barred and therefore passed the impugned order. We also find that the impugned order has been passed on the basis that assessee had come to One Time Settlement (OTS) on 21st October 2008 with Union Bank of India for loan taken and in the absence of complete details of the OTS the said amount was added as income of petitioner. Since petitioner/Uma Devesh Ajmera came to know about the existence of the order only on or about March 2020, the time to file appeal has also expired. It is averred in the petition that the OTS with Union Bank of India was only about Rs. 42 Lakhs and not Rs. 9.60 Crores. Therefore, in our view grave prejudice will be caused to petitioner if the impugned order is sustained. As petitioner/Uma Devesh Ajmera stated that she will fully co-operate with the Jurisdictional Assessing Officer (JAO) and provide all details to reconsider the assessment of petitioner for Assessment Year 2009-10. Statement accepted. The impugned order is quashed and set aside. JAO shall, within two weeks provide copy of all notices issued to petitioner through petitioner s advocate. Within two weeks thereafter petitioner shall reply/show cause to the notices and provide all details and documents.

Summary

Issues involved:
The impugning of an order under the Income Tax Act for Assessment Year 2009-10 due to non-receipt of notices, passing of the impugned order based on time constraints and incomplete information, expiry of appeal filing time, discrepancy in the One Time Settlement amount, and the need for reconsideration of the assessment.

Non-receipt of Notices:
The petitioner challenged an order passed under the Income Tax Act for Assessment Year 2009-10, claiming that notices sent by the Assessing Officer were not received due to the death of one director and the company becoming non-functional. The impugned order noted that the notices came back undelivered, prompting the Assessing Officer to complete the assessment based on available information. The petitioner, Uma Devesh Ajmera, only became aware of the order in March 2020, after her personal account was attached by the Income Tax authorities.

Incomplete Information and Time Constraints:
The impugned order was passed based on the assumption that the assessee had entered into a One Time Settlement (OTS) with Union Bank of India for a substantial amount. However, the petitioner contended that the OTS amount was significantly lower than what was considered for assessment. The order was rushed due to the matter nearing the limitation period, leading to the assessment being completed to the best of the Assessing Officer's judgment.

Expired Appeal Filing Time and Discrepancy in OTS Amount:
Due to the delayed awareness of the order, the petitioner missed the deadline to file an appeal. The petitioner argued that the OTS amount with Union Bank of India was inaccurately stated in the impugned order, causing potential harm if the order was upheld. The petitioner expressed willingness to cooperate with the Jurisdictional Assessing Officer for reassessment.

Judgment and Directions:
The High Court quashed and set aside the impugned order dated 30th December 2016. The Jurisdictional Assessing Officer was directed to provide copies of all notices to the petitioner's advocate, who would then reply and provide necessary details within two weeks. Subsequently, the Assessing Officer was instructed to pass a reasoned order within six weeks after a personal hearing with the petitioner, considering all submissions. Consequential Notices/Demands issued were also quashed, with a clarification that the Court did not express any opinion on the merits of the case.