SYNTHITE INDUSTRIES PRIVATE LIMITED, vs. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER,

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WP(C)/5229/2024HC KeralaKLHC01081043202409 February 2024Author: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that there is no bar for the assessing authority to issue more than one notice under Section 142(1) of the Income Tax Act, 1961. The court reasoned that since the previous assessment order was set aside and the process was directed to be redone, if the authority possessed information or material regarding other unexplained income of the petitioner, it was well within its power to ask for explanations concerning those incomes. Therefore, the impugned notices could not be considered as being without jurisdiction. The court found no substance in the petitioner's submission and dismissed the writ petition.

What were the facts?

The petitioner, Synthite Industries Private Limited, filed a writ petition challenging notices issued under Section 142(1) of the Income Tax Act, 1961. This was the second round of litigation. In the first round, the petitioner had challenged an assessment order for assessment year 2016-17, passed under Section 143(3) read with Sections 263 and 144B, alleging insufficient opportunity to respond to a show cause notice. The High Court had allowed the previous writ petition, quashed the assessment order, and directed the authority to redo the process after providing a meaningful opportunity. The current petition challenges subsequent Section 142(1) notices demanding explanations on other issues, which the petitioner argued were beyond the scope of the remand.

What were the issues?

1. Whether, after an assessment order was quashed and the matter remanded for re-doing the process, the assessing authority can issue subsequent notices under Section 142(1) of the Income Tax Act, 1961, demanding explanations regarding issues not part of the original show cause notice or the scope of the remand. Assessee's Contention: The petitioner argued that once the assessment order was set aside and the matter remanded, the assessing authority could not demand explanations for other aspects not covered by the earlier show cause notice. They contended that a subsequent notice seeking other details was entirely without jurisdiction, as the remand was only to consider issues for which clarification was sought via the earlier Section 142(1) notice. Revenue's Contention: The judgment does not explicitly record the revenue's contentions. However, the court's reasoning implies that the revenue would have argued for the authority's power to seek further information.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263,Section 144B,Section 142(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 9TH DAY OF FEBRUARY 2024 / 20TH MAGHA, 1945 WP(C) NO. 5229 OF 2024 PETITIONER/S: SYNTHITE INDUSTRIES PRIVATE LIMITED, VIII 683-A CORPORATE HOUSE, KADAYIRUPPU, KOLENCHERRY, ERNAKULAM, KERALA. REPRESENTED BY ITS MANAGING DIRECTOR MR.VARGHESE JACOB., PIN - 682311 BY ADVS. ABRAHAM JOSEPH MARKOS ISAAC THOMAS ALEXANDER JOSEPH MARKOS SHARAD JOSEPH KODANTHARA V.ABRAHAM MARKOS RESPONDENT/S: 1 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI, PIN - 110001 2 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, NATIONAL E-ASSESSMENT CENTRE,NEW DELHI, PIN - 110001 3 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -2(1),KOCHI, PIN - 682018 4 THE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD,KOCHI, PIN - 682018 OTHER PRESENT: SRI.CYRIAC TOM -SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 5229 OF 2024. 2

J U D G M E N T This is the second round of litigation by the petitioner before this Court. Earlier, the petitioner had approached this Court by filing WP(C) No.12756/2022 against the assessment order passed under Section 143(3) read with Sections 263 and 144B of the Income Tax Act, 1961 ('Act', for short) in Ext.P7 dated 25.3.2022 in respect of the assessment year 2016-17, on the ground that the petitioner was not afforded meaningful and sufficient opportunity to respond to the show cause notice. This Court considering the submissions of the learned counsel for the petitioner, vide judgment dated 10.2.2023, Ext.P8, allowed WP(C) No.12756/2022 and quashed the said assessment order with direction to the authority concerned to re-do the process in accordance with the procedure laid down by law, after permitting the petitioner to show cause in a meaningful manner.

WP(C) NO. 5229 OF 2024. 3

2.

Now, the petitioner has approached this Court with this writ petition against Exts.P9 and P11 notices issued under Section 142(1) of the Act calling upon the petitioner to give explanation with regard to other issues. Learned counsel for the petitioner submits that once the assessment order was set aside and the matter was remanded back, the assessing authority could not have demanded explanation in respect of other aspects, which may not be part of the earlier show cause notice. He further submits that since the matter was only remanded back to consider the issues, which were sought to be clarified by issuing notice under Section 142(1), a subsequent notice asking for other details is totally without jurisdiction.

3.

I find no substance in the submission. There is no bar for the assessing authority to issue more than one notice. This Court has directed for re-doing the process and if the authority has information and materiel regarding

WP(C) NO. 5229 OF 2024. 4 other unexplained income of the petitioner, the assessing authority is well within the power to ask for explanation in respect of those income and it cannot be said that the notices impugned are without jurisdiction. In view of the above, I find no substance in the present writ petition, which is hereby dismissed. Pending interlocutory application, if any, in the present writ petition stands dismissed. DINESH KUMAR SINGH

JUDGE jg

WP(C) NO. 5229 OF 2024. 5

Appendix — schedule of exhibits
APPENDIX OF WP(C) 5229/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 20.12.2018 FOR AY 2016-17 Exhibit P2 TRUE COPY OF THE ORDER OF THE COMMISSIONER UNDER SECTION 263 DATED 08.03.2021 Exhibit P3 TRUE COPY OF THE NOTICE DATED 30.09.2021 UNDER SECTION 142(1) Exhibit P4 TRUE COPY OF THE REPLY DATED 15.10.2021, WITHOUT ANNEXURES, FURNISHED BY THE PETITIONER BEFORE THE 1ST RESPONDENT Exhibit P5 TRUE COPY OF THE SHOW CAUSE NOTICE AND DRAFT ASSESSMENT ORDER DATED 23.03.2022 Exhibit P6 TRUE COPY OF THE INTERIM REPLY DATED 24.03.2022 Exhibit P7 TRUE COPY OF THE ASSESSMENT ORDER DATED 25.03.2022 PASSED BY THE 1ST RESPONDENT Exhibit P8 TRUE COPY OF THE JUDGMENT DATED 10.02.2023 IN WP NO. 12756/22 Exhibit P9 TRUE COPY OF THE NOTICE DATED 05.02.2024 UNDER SECTION 142(1) OF THE INCOME TAX ACT Exhibit P10 TRUE COPY OF THE OBJECTIONS DATED 06.02.2024 FILED BY THE PETITIONER Exhibit P11 TRUE COPY OF THE NOTICE UNDER SECTION 142(1) DATED 06.02.2024 Exhibit P12 TRUE COPY OF THE JUDGMENT DATED 19.01.2024 IN W.P. NO. 1859 OF 2023

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