Noel Villas And Apartments Vs ACIT (Kerala High Court)
The Kerala High Court dismissed two writ petitions filed by an assessee challenging the assessment order for Assessment Year 2020-21, the subsequent rectification order, and the related penalty notices issued under Sections 270A and 274 of the Income Tax Act. The Court held that the assessment was completed within the statutory time limit, that issuance of a draft assessment order was not mandatory in the petitioner’s case, and that the petitioner had an effective statutory appellate remedy against the assessment orders.
The petitioner, a partnership firm engaged in the construction of apartments, villas and commercial complexes, had filed its return of income under Section 139(1). During faceless assessment proceedings, the authorities issued notices under Sections 143(2) and 142(1) seeking clarifications and supporting documents, including details regarding stock valuation, financial statements, business activities, and raw materials. After considering the replies, the department issued a show cause notice proposing three variations to the returned income. The petitioner responded with objections and supporting documents, but alleged that these were not properly considered before the assessment order was passed. Consequential demand and penalty notices followed, and while the first writ petition was pending, the department passed a rectification order and a fresh demand notice, leading to the second writ petition.
