Case Law Details
Muhammed Kallat Vs ITO (Kerala High Court)
1. Background: The petitioner, an NRI, had a 75% ownership stake in a mall constructed in partnership. The ADIT Investigation wing conducted a verification, revealing significant investments. The petitioner, being an eligible assessee, received a draft assessment order and the opportunity to file objections within thirty days.
2. Request for Extension: The petitioner failed to submit objections within the stipulated thirty days and sought additional time. However, Sections 143(3) and (4) of the Income Tax Act do not provide provisions for extending the objection filing period. Consequently, the objection request was not entertained, leading to the issuance of the impugned assessment orders.
3. Court’s Observation: The court, upon thorough examination, concluded that the absence of a specific provision in the Income Tax Act prohibits the extension of the thirty-day limit for filing objections against draft assessment orders. Acknowledging the procedural adherence by the Disputes Resolution Panel and the assessing authority, the court found no legal infringement or violation of natural justice.
4. Dismissal of Writ Petitions: The court, based on the absence of legal grounds, dismissed the writ petitions. However, the petitioner was granted the option to pursue statutory appeal if deemed necessary.
Conclusion: The Kerala High Court’s ruling clarifies the procedural limitations regarding the timeframe for filing objections against draft assessment orders. The decision underscores the importance of adherence to statutory timelines and highlights the absence of provisions for extensions in certain circumstances. Taxpayers are reminded to comply with prescribed timelines and explore statutory appeal avenues for recourse in case of disagreements with assessment orders.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
1. Petitioner/assessee is an Non Resident Indian (NRI). In respect of the relevant assessment year i.e. 2015-16, the assessee did not filed return of his income. The petitioner/assessee along with Mr. Aboobacker had constructed a Mall at Mananthavady in the name and style of M/s. Mall of Kallat. In the said Mall, the petitioner/assessee owns 75% share. ADIT Investigation wing, Kozhikode conducted verification on 18.04.2019 and information was gathered relating to the information made by the petitioner in the said Mall. As per the details obtained, total investment in the Mall from 2012 to 2014 was Rs. 3.97 crores and the assessee had invested more than Rs. 90,00,000/- in the assessment year 2015-16.
2. The petitioner being an NRI and he is an “eligible assessee” under Sub-Section 15 (b) (ii) of Section 144 C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short). The petitioner was issued with draft assessment order giving an opportunity to file objection to the draft assessment order. The petitioner admittedly did not file any objection to the draft assessment order within thirty days and sought time for filing the objection to the draft assessment order. There is no provision under Sub-Section (3) and (4) of Section 143 for extending the thirty days time for filing the objection to the draft assessment order. Therefore, the request of the petitioner is not entertained and impugned assessment orders in Exhibit P-8 have been passed.
3. I do not find any ground to interfere with the impugned assessment orders as there is no provision in the Income Tax Act to extend the limitation of thirty days for filing objection against the draft assessment order. As the petitioner failed to file objection to the draft assessment order within period of thirty days, the Disputes Resolution Panel and the assessing authority have proceeded in the matter in accordance with the law and there is no incursion of law or violation of the principles of natural justice which requires this Court to interfere with the assessment orders impugned in these writ petitions. Therefore, these writ petitions are hereby dismissed. However, the petitioner may take recourse to any statutory appeal if he so advised.
With the aforesaid directions, the present writ petitions are allowed.
Author Bio
The Judgement did not mention when the draft AO was issued or received and when did the extension sought. Secondly, if.an extension is sought then a prayer as to first not accepting the Draft AO sentence should have added. Once non acceptance of the Draft AO is mentioned then it would stand at merit that it is not accepted stand. Limitation is not bypassed. Once objection as to the Not Acceptable will change the whole scenario of the case. Who guide the assesses? No means No and Not acceptance is Not acceptance. After that why will come.