2024 (10) TMI 92 - HC - Income Tax

Validity of order u/s 148A(d) and a notice u/s 148 were issued to the petitioner and penalty orders - failure to respond to the show cause notice - petitioner also admittedly failed to file the return of income in response to the Section 148 notice, and has approached this Court after the penalty was issued - HELD THAT - Impugned assessment order and impugned penalty order are set aside on condition that the petitioner remits a sum of Rs.2,00,000/- towards the income tax demand, as agreed to, within four weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice. Upon receipt of the petitioner's reply and subject to being satisfied regarding the receipt of the sum of Rs.2,00,000/-, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing by video conferencing, and thereafter issue a fresh order within four months from the date of receipt of the petitioner's reply. In order to enable the petitioner to upload the reply, the respondents are directed to provide access to the portal. All legal issues are kept open for consideration by the assessing officer.

Issues:
Challenge to assessment and penalty orders for assessment year 2015-16 based on non-compliance with Income Tax Act provisions.

Analysis:
The petitioner, along with other legal heirs, sold an immovable property in February 2014 and received the sale proceeds in the same financial year. Subsequently, the petitioner created fixed deposits in the following assessment year. Notices were issued under various sections of the Income Tax Act, including Section 148A(b), 148A(d), and 148, as the petitioner failed to respond to earlier communications. The impugned assessment and penalty orders were issued due to non-compliance.

The petitioner's counsel argued that the petitioner's inability to respond to notices was due to being diagnosed with Grade 2 Carcinoma of the tongue, which affected his participation in the proceedings. The petitioner agreed to remit a sum of Rs.2,00,000/- towards the income tax demand as a condition for remand.

The respondents' counsel contended that despite being diagnosed with cancer after the issuance of notices, the petitioner failed to respond to earlier communications, including the notice under Section 148. The counsel highlighted the petitioner's delayed approach to the court, waiting until after the penalty order was issued.

Pathology reports confirmed the petitioner's cancer diagnosis during the period of the show cause notice issuance. While the petitioner's explanation for not responding to the show cause notice was accepted, the failure to engage with earlier communications, including not filing the return of income in response to the Section 148 notice, was noted. The court emphasized the need to protect revenue interest while addressing the matter.

The court set aside the assessment and penalty orders on the condition that the petitioner remits Rs.2,00,000/- towards the income tax demand within four weeks and submits a reply to the show cause notice. The assessing officer was directed to provide a reasonable opportunity for the petitioner, including a personal hearing by video conferencing, and issue a fresh order within four months upon receipt of the reply. The respondents were instructed to provide portal access for uploading the reply, keeping all legal issues open for the assessing officer's consideration.

The writ petitions were disposed of based on the above terms, with no costs imposed, and related miscellaneous petitions were closed.

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