2024 (9) TMI 964 - HC - Income Tax

Validity of order passed u/s 147 r/w 144 resorting to best judgement u/s 144 - petitioner, a HUF, claimed that after the death of the main Karta, returns were filed for the AY 2012-2013 but not for 2013-2014 - petitioner's wife filed independent returns for 2013-2014, declaring the HUF income for the last two months post the Karta's death. Notices were sent to the designated email ID which were not replied back by the petitioner HUF - As submitted that even if the Karta died on 15.01.2013, the status of the HUF did not get disintegrated and it was the responsibility of the surviving coparcener to file the returns HELD THAT - The petitioner can be given one opportunity as there are several factors which have contributed to the passing of the impugned order partly, on account of the death of the Karta on 15.01.2013 and thereafter due to out break of Covid 19 pandemic. Therefore to balance the interest of the parties, Court is inclined to come to the rescue of the petitioner by quashing the impugned order and remits the case back to the respondent to pass a fresh order on merits. The impugned order which stands quashed shall be treated as addendum to the notices issued to the petitioner as detailed in para 4 of the impugned order. Under these circumstances, there shall be a direction to the respondent to take steps to complete the assessment in accordance with the faceless assessment scheme.

Summary

Issues:
Challenge to Assessment Order under Income Tax Act, 1961

Analysis:
The petitioner challenged the Assessment order dated 29.09.2021 passed under Section 147 read with 144 of the Income Tax Act, 1961, resorting to best judgment under Section 144. The petitioner, a HUF, claimed that after the death of the main Karta, returns were filed for the Assessment year 2012-2013 but not for 2013-2014. The petitioner's wife filed independent returns for 2013-2014, declaring the HUF income for the last two months post the Karta's death. The petitioner alleged not receiving several notices preceding the impugned order, urging for one last chance.

The respondent argued that notices were sent to the designated email ID, though updated later, and the responsibility to file returns and respond to notices fell on the surviving coparcener post the Karta's death. As no returns were filed for 2013-2014, the impugned assessment was completed under Section 147 read with 144. The respondent highlighted the family's long-term presence at the address, indicating awareness of the communication. The Court considered various factors leading to the impugned order, including the Karta's death and the Covid-19 pandemic, and decided to quash the order, remitting the case back to the respondent for a fresh order on merits. The impugned order was to be treated as an addendum to the notices issued.

The Court directed the respondent to complete the assessment in accordance with the faceless assessment scheme. The writ petition was disposed of without costs, and connected writ miscellaneous petitions were closed.