A H Engineering Contractors Vs ITO (Madras High Court)
The Madras High Court heard two writ petitions filed by the petitioner concerning reassessment proceedings under the Income Tax Act, 1961. In W.P.No.30284 of 2022, the petitioner challenged a Draft Assessment Order dated 12.03.2022 and a demand notice dated 22.09.2022. However, during the proceedings, it was brought to the Court’s attention that the Department had already passed a final assessment order on 28.03.2022 under Section 144 of the Act. As the final assessment order superseded the draft order, the Court held that W.P.No.30284 of 2022 had become infructuous.
The second writ petition, W.P.No.31668 of 2022, concerned a challenge to the notice issued on 30.03.2021 under Section 148 for the Assessment Year 2013–2014 and the consequential assessment order dated 28.03.2022. The Court observed that the petitioner had not participated in the reassessment proceedings, and therefore, the Assessing Officer had passed the order ex parte.
The assessment order, as reproduced in the judgment, detailed that the petitioner’s Income Tax System (ITS) and Form 26AS records showed total contract receipts of ₹3,67,95,249 and rent receipts of ₹12,36,526 during the relevant financial year. Since the petitioner failed to file a return of income or provide any explanation or supporting details in response to the notice under Section 148, the Assessing Officer considered 10% of the contract receipts, amounting to ₹36,79,530, as undisclosed income. The rent income was also determined at ₹8,65,568 after applying the deduction under Section 24(a) of the Act. Consequently, the total undisclosed income was computed at ₹45,45,098, and penalty proceedings were initiated separately under Section 271(1)(c) for concealment of income.
