Case Law Details
Jaganathan Bhaarath Vs ACIT (Madras High Court)
Introduction: In a recent judgment, the Madras High Court addressed the case of Jaganathan Bhaarath vs. ACIT, setting aside an order dated 30.07.2022 and its consequential notice. The petitioner challenged a notice under Section 148 of the Income Tax Act, 1961, pertaining to an alleged escaped assessment for the Assessment Year 2013-14. The court’s decision revolved around discrepancies in the acknowledgment of the petitioner’s replies, emphasizing the need for accurate administrative processes.
Background: The petitioner received a notice under Section 148 and, following directions from the Supreme Court in Union of India v. Ashish Agarwal, [2022] 444 ITR 1 (SC), responded on 23.05.2022. Despite submitting replies physically on 01.06.2022 and 02.06.2022, the impugned order incorrectly stated that the petitioner had not replied to the notice. This discrepancy formed the basis of the petitioner’s challenge.
Court’s Analysis: The respondent’s counsel acknowledged the need for proceedings in the case of escaped assessment but agreed to remand the matter for reconsideration of the petitioner’s objections. The court scrutinized the documents on record, which included the petitioner’s replies with acknowledgments from the Income Tax Office. The court found that the impugned order’s conclusion about the petitioner not filing a reply was inconsistent with the documented evidence, rendering the order unsustainable.
Court’s Decision: In light of the administrative error, the court allowed the writ petition, quashing the impugned order and related notices. The matter was remanded to the Assessing Officer, with directions to consider the objections filed by the petitioner on 01.06.2022 and 02.06.2022. The Assessing Officer was instructed to provide a reasonable opportunity to the petitioner and complete the reconsideration process within 12 weeks from the date of receiving a copy of the court’s order. The connected miscellaneous petitions were closed, and no costs were imposed.
Conclusion: Jaganathan Bhaarath’s case underscores the importance of accurate administrative procedures in legal matters. The court’s intervention rectified a misrepresentation in the order, emphasizing the need for precision in recording and acknowledging responses to notices in income tax proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition is directed against order dated 30.07.2022 and a consequential notice.
2. A notice under Section 148 of the Income Tax Act, 1961 (Income Tax Act), was issued to the petitioner in respect of alleged escaped assessment for the Assessment Year 2013-14. Pursuant to directions issued by the Hon’ble Supreme Court in Union of India v. Ashish Agarwal, [2022] 444 ITR 1 (SC), such notice was treated as a notice under the amended provision [Section 148 A(b)] and the petitioner was called upon on 23.05.2022 to submit a reply thereto. According to the petitioner, the e-filing portal did not include a tab for the submission of an online reply. Consequently, the petitioner submitted the reply physically on 01.06.2022 and obtained an acknowledgment from the office of the Assistant Commissioner of Income Tax. A further reply was also submitted on 02.06.2022. In spite of such replies, learned counsel for the petitioner submits that impugned order proceeds on the basis that the assessee did not a reply to notice dated 23.05.2022. The present writ petition arises in the said facts and circumstances.
3. Learned counsel for the respondent submits that there was sufficient basis for the initiation of proceedings in respect of escaped assessment. Without prejudice to the contentions on merits, he submits that the matter may be remanded for consideration of the objections of the petitioner.
4. The documents on record include the reply dated 06.2022 of the petitioner to notice dated 23.05.2022. The said reply also bears acknowledgment dated 01.06.2022 of the relevant Income Tax Office. A subsequent reply dated 02.06.2022 is also on record and, likewise, the said reply also bears acknowledgment dated 02.06.2022 of the relevant office. In light of these documents, the conclusion in paragraphs 5 and 6 of the impugned order to the effect that the assessee did not file a reply to notice dated 22.05.2022 is contrary to the documents on record. Therefore, the said order cannot sustained.
5. For reasons set out above, this writ petition is allowed by quashing impugned order dated 30.07.2022 and the notices issued pursuant thereto. As a corollary, the matter is remanded for reconsideration. The Assessing Officer is directed to proceed with the matter on merits after duly considering the objections filed by the petitioner on 01.06.2022 and 02.06.2022 and after providing a reasonable opportunity to the petitioner. This exercise shall be completed within a period of 12 weeks from the date of receipt of a copy of this order. Consequently, connected connected miscellaneous petitions are closed. There shall be no order as to costs.
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