Vijayakumar Vs Assessment Unit (Madras High Court)
The case of Vijayakumar Vs Assessment Unit, adjudicated upon by the Madras High Court, revolved around the challenge to an assessment order and a penalty order concerning income tax. The petitioner, an income tax assessee, contested these orders primarily on the grounds of not having been given a reasonable opportunity to contest the matter on merits.
The crux of the issue stemmed from a notice issued to the petitioner under Section 148A(b) of the Income Tax Act 1961, pertaining to an alleged escaped income of Rs. 53,56,000/- for the assessment year 2015-16. The petitioner’s failure to respond to this notice led to the issuance of an order under Section 148A(d) and subsequent notices under Section 148, 142, and a show cause notice, culminating in the impugned orders.
The petitioner’s counsel contended that the respondents (tax authorities) only considered the credits in the petitioner’s bank account and did not account for the debits, which would significantly affect the calculation of the escaped income. Additionally, it was argued that the ‘income chargeable to tax’ should be equal to or more than Rs. 50 lakhs, not merely the income itself.
On behalf of the respondents, it was argued that the reassessment proceedings were initiated in accordance with legal requirements and within the prescribed period. The respondents maintained that they were entitled to consider the entire undisclosed credits for the purpose of reopening the assessment, emphasizing that the petitioner failed to file the return of income.
