Madras HC Dismisses Petition Against Income Tax Assessment Orders

Senthurpandi Pathirakali Muthu Vs ITO (Madras High Court)

The case of Senthurpandi Pathirakali Muthu vs. ITO (Madras High Court) revolves around the challenge against notices issued by the Income Tax Department regarding outstanding tax for the assessment year 2017-18. The petitioner, an assessee, was directed to pay Rs. 17,11,240 based on an assessment order dated 12.04.2023. Despite appealing the order, it was confirmed by the Appellate Authority on 04.10.2023. The petitioner did not contest these orders but challenged the demand notice, alleging a lack of fair opportunity during assessment and appeal proceedings.

The crux of the petitioner’s argument lies in the purported absence of a fair opportunity during the assessment and appeal stages. However, the petitioner did not contest the orders themselves, which attained finality post the dismissal of the appeal. Consequently, the Income Tax Department issued a demand notice for the outstanding tax amount for the said assessment year.

The High Court’s decision rests on the principle that once an assessment order attains finality, the taxpayer is obligated to pay the assessed tax amount. Despite the petitioner’s contentions regarding procedural fairness, the court found no merit in challenging the demand notice for payment. Essentially, the court held that the petitioner’s failure to challenge the assessment and appeal orders precluded them from contesting the demand notice issued subsequently.

In dismissing the writ petition, the court emphasizes the importance of abiding by the due process and timely challenging adverse orders within the statutory framework. By not availing themselves of the appropriate legal remedies during the assessment and appeal stages, the petitioner forfeited the opportunity to contest the demand notice issued by the Income Tax Department.

The judgment underscores the significance of adhering to procedural requirements and exhausting available legal remedies in tax matters. It serves as a reminder to taxpayers to diligently pursue their cases at every stage of the assessment and appeals process to safeguard their interests and ensure procedural fairness.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This Writ Petition has been filed challenging the impugned notices dated 17.04.2024 and 29.04.2024 issued by the respondent.

2. Admittedly, the petitioner, who is an assessee, was directed to pay a total sum of Rs.17,11,240/- for the assessment year 2017-18, as per assessment order dated 12.04.2023, against which, the petitioner has also preferred an appeal before the Appellate Authority and the Appellate Authority has also confirmed the order, as per proceedings dated 04.10.2023.

3. Both the orders have not been challenged by the petitioner so far and consequently, the Income Tax Department has issued the demand notice to pay a sum of Rs.17,11,240/-, which is treated as outstanding tax amount for the assessment year 2017-18.

4. The petitioner herein, has challenged the above demand notice on the ground that, no fair opportunity was given at the time of passing assessment order and in appeal proceedings. No challenge is made to quash the above orders. Since the assessment order has reached finality after dismissal of the appeal, the petitioner has to pay the outstanding tax amount as assessed for the year 2017-18 and this Court finds no merits in challenging the demand notice for the payment of amount.

5. Accordingly, this Writ Petition is dismissed. No costs.