Case Law Details
BMN Steels Emporium Vs DCIT (Madras High Court)
Madras High Court held the writ petition as premature as it is open to the petitioner to raise all the objections before the assessing authority in respect of show cause notice before completion of assessment. Accordingly, writ petition disposed of.
Facts- The petitioner is a company engaged in the business of trading of carbon and alloy steel iron bars. During the relevant assessment years, the petitioner had filed its return in terms of the IT Act. Survey u/s. 133A of the IT Act, was conducted on the premises of the petitioner on 08.03.2019 and statements were obtained during the said survey wherein the petitioner had offered a low net profit percentage @ 1.09 % as against net profit percentage of 3 % (mistakenly mentioned as 5%) offered by others in the same line of business. The assessee vide letter dated 05.04.2019 retracted the above statement recorded on 08.03.2019. On the basis of the said statement, notices were issued u/s. 148 of the IT Act on 31.03.2021.
The short question that arises for consideration is whether the impugned assessment proceeding made solely on the basis of the statement obtained from the petitioner during the course of survey u/s. 133A of the Income Tax Act, 1961 can be sustained.
Conclusion- Held that there is merit in the submission made by the learned counsel for the respondent that the writ petitions at this stage is premature and thus ought not to be entertained. It is open to the petitioner to raise all its objection and place reliance on the judgment referred and circular before the assessing authority who shall consider the same while passing the orders of assessment. It is made clear that while completing the assessment, the assessing authority shall afford reasonable opportunity in accordance with law. Needless to state that if the petitioner were to raise the jurisdiction of the assessing officer to make assessment solely on the basis of statement obtained under Section 133A of the IT Act, the same would be dealt with.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
