Appeal to be preferred before appellate authority as assessment order was within jurisdiction

Heartwares Medicals India Private Limited Vs Assessment Unit (Kerala High Court)

Kerala High Court held that petitioner was duly put to notice and thereafter the assessment proceedings had been completed. As assessment order was within jurisdiction and not in violation of principles of natural justice, petitioner directed to file an appeal before appellate authority u/s. 246A of the Act.

Facts- The present writ petition has been filed under Article 226 of the Constitution of India impugning the assessment order in respect of the assessment year 2021-22. The petitioner submits that enquiries were held behind the back of the petitioner- assessee in respect of certain sales effected to different hospitals and the assessing authority did not take into consideration the details of the confirmation of the sales made by the petitioner to different hospitals, and the amount of sale considerations had been added as income of the petitioner. It is further submitted that the petitioner had obtained the details with regard to confirmation of the sales from the said hospitals after the assessment order. He, therefore, prays that the matter may be remanded back to the assessing authority with direction to re-consider the same.

Conclusion- In exercise of the power of judicial review under Article 226 of the Constitution of India, this Court can interfere with the proceedings only when the same has been issued without jurisdiction or there has been in infraction of principles of natural justice. The petitioner was put to notice and thereafter the assessment proceedings had been completed. Therefore, I do not find that the impugned assessment order is without jurisdiction or there has been any violation of principles of natural justice. This Court would not like to consider the merits of the assessment order. The petitioner was given notice under Section 142(1) of the Act.

In view of the above, the present writ petition is disposed of with liberty to the petitioner to file appeal under Section 246A of the Act before the appellate authority against the impugned assessment order, within a period of fifteen (15) days from today.

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

The present writ petition has been filed under Article 226 of the Constitution of India impugning the assessment order in Ext.P13 dated 26.12.2022 in respect of the assessment year 2021-22. Learned counsel for the petitioner submits that enquiries were held behind the back of the petitioner- assessee in respect of certain sales effected to different hospitals and the assessing authority did not take into consideration the details of the confirmation of the sales made by the petitioner to different hospitals, and the amount of sale considerations had been added as income of the petitioner. It is further submitted that the petitioner had obtained the details with regard to confirmation of the sales from the said hospitals after the assessment order. He, therefore, prays that the matter may be remanded back to the assessing authority with direction to re-consider the same on the basis of the sales confirmation as per Ext.P14 series documents.

2. Under Section 133C of the Income Tax Act, 1961, (“Act”, for short) there is no requirement that notices for confirming the sales etc. should be issued with the knowledge of the assessee. The assessment order would disclose that in respect of the alleged sales effected by the petitioner to different hospitals, notice under Section 133(6) was sent to each of the hospitals. However, no response was received from the said hospitals. During the assessment proceedings, the petitioner did not file sale confirmation letters, which have been obtained by him after the assessment order. Once the sales confirmation letters were not before the assessing authority, the assessment order cannot be faulted with for not considering the evidence, which were collected by the petitioner- assessee after the issuance of the assessment order. The petitioner has the remedy of appeal against the assessment order. Instead of filing appeal against the assessment order, the petitioner has approached this Court with this writ petition.

3. In exercise of the power of judicial review under Article 226 of the Constitution of India, this Court can interfere with the proceedings only when the same has been issued without jurisdiction or there has been in infraction of principles of natural justice. The petitioner was put to notice and thereafter the assessment proceedings had been completed. Therefore, I do not find that the impugned assessment order is without jurisdiction or there has been any violation of principles of natural justice. This Court would not like to consider the merits of the assessment order. The petitioner was given notice under Section 142(1) of the Act.

In view of the above, the present writ petition is disposed of with liberty to the petitioner to file appeal under Section 246A of the Act before the appellate authority against the impugned assessment order, within a period of fifteen (15) days from today. If such an appeal is filed before the appellate authority as above, the appellate authority should consider the same on merits, without going into the question of limitation. It is directed that no coercive steps shall be taken against the petitioner for a period of fifteen (15) days from today, for realisation of the tax determined vide the impugned assessment order.

Pending interlocutory application, if any, in the present writ petition stands dismissed.