Katteri Kaderi Vs Assessment Unit Headed By Principle Chief Commissioner (Kerala High Court)
The Kerala High Court recently dismissed a writ petition filed by an assessee challenging the assessment order dated 15.03.2023, passed under Section 147 of the Income Tax Act. The petitioner, who failed to file the return of income for the assessment year 2018-19, contested the proceedings initiated against them.
Detailed Analysis:
The case was reopened based on specific information flagged through the CBDT’s Risk Management Strategy. The petitioner’s transactions during the financial year 2017-18, leading to a significant cash deposit and other transactions, prompted the reopening of the case under Section 147. The notice under Section 148 was duly served on the petitioner after obtaining necessary approval under Section 151.
Despite multiple notices, including a detailed questionnaire under Section 142(1), the petitioner did not respond. The court noted that every communication was not only uploaded on the portal but also communicated via email with real-time alerts. The petitioner did not dispute the transactions mentioned in the assessment order.
In the absence of the petitioner’s response, the Assessing Officer finalized the assessment under Section 144 read with Sections 147 and 144B, determining a total income of Rs. 2,27,95,237. The court mentions that interest and fees were imposed under various sections of the IT Act for non-filing of the return, and proceedings for imposing penalties under Section 271AAC(1) were contemplated.
Conclusion:
The petitioner’s contention that they did not receive notices was rejected by the court, emphasizing the electronic communication channels used. The court concluded that there was no violation of natural justice, especially as the petitioner chose not to respond to any notices. The assessment order was deemed valid, and the writ petition was dismissed, with the petitioner retaining the right to explore other legal remedies available.
This case underscores the importance of active participation in assessment proceedings to avoid adverse consequences and highlights the court’s reliance on electronic communication methods in ensuring due process.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
1. The present writ petition has been fled by the petitioner, an assessee under the provisions of the Income Tax Act, impugning the assessment order dated 15.03.2023 in Exhibit P-1 passed under the provisions of Section 147 read with Section 144 and 144B of the Income Tax Act.
2. The petitioner an assessee did not fled his return of income under Section 139 (1) of the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act, 1961’) for the assessment years 2018-19.
3. The specific information was fagged as per Risk Management Strategy formulated by the CBDT through ITBA software under the head ‘High Risk CRI/VRU cases’.
4. As per the specific information, the petitioner had carried out the transactions mentioned in the impugned assessment order during the financial year 2017-18, relevant to the assessment year 2018-19. consequently the case was reopened. The transaction would disclose the huge cash deposit and receipts including purchase of vehicle worth Rs.81,59,456/-.
5. The petitioner case was reopened within the meaning of Section 147 of the IT Act, 1961 and notice under Section 148 was issued and served on the petitioner after taking necessary prior approval from the competent authority under Section 151 of the IT Act, 1961. Reasons for reopening the assessment are also communicated by the notice issued under Section 148. The petitioner did not responded to the said notice and thereafter, an order under Section 148A (d) of the IT Act, 1961 dated 30.03.2022 came to be passed and final notice under Section 148 of the IT Act, 1961 dated 30.03.2022 was issued to the petitioner asking him to file his return of income. A notice under Section 142 (1) with detailed questionnaire was also issued to the petitioner. Paragraph 3 of the assessment order would note of the dates of notices etc. and also suggest that none of it was responded by the petitioner.
6. In the absence of any response from the petitioner, the notice was also sent through speed post with consignment number and as per the verification of the speed post, the said letter was delivered on the petitioner on 07.03.2023 and therefore, a show cause notice under Section 144 of the IT Act, 1961 was issued and served on the petitioner on 27.01.2023 giving the assessee an opportunity to show cause within time period prescribed as to why in the absence of compliance by the assessee, the time barring should not be concluded logically ex parte. The petitioner however did not responded to any such notices and communications and considering the record available with the Assessing Officer, the assessment under Section 144 read with Section 147 and Section 144B of the IT Act, 1961 was finalised on total income of Rs. 2,27,95,237/-. the interest under Section 234A, 234B and 234C of the IT Act, 1961 was issued and Charge fees under Section 234F of the IT Act, 1961 for not fling the return for the demand notice has been issued. It has been further said that further proceedings for depositing the penalty under Section 271AAC(1) would be initiated against the petitioner.
7. The Learned Counsel for the petitioner submits that the petitioner did not receive any of the notices as mentioned in the assessment order.
8. The said contention is only to be rejected. Every communication/notice is not only uploaded in the portal, but it also communicated in e-mail with real time alert by messages. Therefore, the spacious ground taken in the writ petition that there has been violation of the principles of natural justice does not merit consideration by this Court. The petitioner has not disputed the cash deposits and transactions as mentioned in the assessment order. The petitioner did not participate with the assessment proceedings initiated under Section 147 read with Section 148 inasmuch as the petitioner did not file return of his income and now he has approached this Court by fling the present writ petition on the ground that there was violation of principle of natural justice. This Court does not find that there has been any violation of principles of natural justice when the petitioner chose not to respond to any of the notices. The assessment order passed does not call for any interference by this Court and therefore, the present writ petition is hereby dismissed leaving it open to the petitioner to file any other remedy, if available to him under the law.
