MUHAMMED KALLAT, vs. INCOME TAX OFFICER,

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WP(C)/24857/2023HC KeralaKLHC01054420202312 January 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH8 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that there is no provision in the Income Tax Act to extend the thirty-day limitation period for filing objections against a draft assessment order. As the petitioner failed to file his objections within the stipulated time, the Dispute Resolution Panel and the assessing authority were justified in proceeding with the matter in accordance with the law. The Court found no incursion of law or violation of the principles of natural justice that would warrant interference with the impugned assessment orders. Therefore, the writ petitions were dismissed. However, the petitioner was granted liberty to take recourse to any statutory appeal if he so advised. The operative direction was the dismissal of the writ petitions, with the liberty to appeal.

What were the facts?

The petitioner, Muhammed Kallat, an NRI, is an "eligible assessee" under Section 144C(15)(b)(ii) of the Income Tax Act, 1961. For assessment year 2015-16, he did not file a return of income. The ADIT Investigation wing gathered information regarding his investment in M/s. Mall of Kallat, where he owns a 75% share. His investment in the Mall from 2012 to 2014 was Rs. 3.97 crores, with over Rs. 90,00,000/- invested in AY 2015-16. A draft assessment order was issued, providing an opportunity to file objections. The petitioner failed to file objections within the stipulated thirty days and requested an extension, which was not entertained. Consequently, impugned assessment orders were passed.

What were the issues?

1. Whether the High Court can interfere with the impugned assessment orders passed by the assessing authority and the Dispute Resolution Panel, given that the petitioner failed to file objections to the draft assessment order within the prescribed thirty days? Assessee's Contention: The petitioner, being an eligible assessee, was issued a draft assessment order. He sought an extension of time to file objections, implying a procedural irregularity or a need for leniency in the process. The judgment does not explicitly record the assessee's arguments beyond the request for extension. Revenue's Contention: The revenue, through the assessing authority and the Dispute Resolution Panel, proceeded with the assessment as per the law, given the petitioner's failure to adhere to the statutory timelines for filing objections to the draft assessment order. The judgment does not explicitly record the revenue's arguments beyond their actions in passing the assessment orders.

Which sections of the Income-tax Act were involved?

Section 144C,Section 143

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

WP(C) NO. 24760 OF 2023
WP(C).24847/2023
WP(C) NO. 24857 OF 2023

Read from the judgment's own cause title. This page is filed under one of them.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 12TH DAY OF JANUARY 2024 / 22ND POUSHA, 1945 WP(C) NO. 24760 OF 2023 PETITIONER: MUHAMMED KALLAT, KALLAT VILLA, NEAR MCF SCHOOL, BYE PASS ROAD, KALPETTA, WAYANAD, KERALA, PIN – 673121. BY ADVS. SRI. ANIL D. NAIR SMT. TELMA RAJU SRI. AADITYA NAIR RESPONDENT

S : 1 INCOME TAX OFFICER, WARD INTERNATIONAL TAXATION, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN – 673001. 2 DISPUTE RESOLUTION PANEL-2, BENGALURU, 'A' WING, 4TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BANGALORE, PIN – 560034. BY ADVS. SRI. JOSE JOSEPH – SC - INCOME TAX DEPARTMENT SRI. G. KEERTHIVAS SRI. P. G. JAYASHANKAR - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2024, ALONG WITH WP(C).24847/2023, 24857/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NOS. 24760, 24847 & 24857 OF 2023 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 12TH DAY OF JANUARY 2024 / 22ND POUSHA, 1945 WP(C) NO. 24847 OF 2023 PETITIONER: MUHAMMED KALLAT, KALLAT VILLA, NEAR MCF SCHOOL, BYE PASS ROAD, KALPETTA, WAYANAD, KERALA, PIN – 673121. BY ADVS. SRI. ANIL D. NAIR SMT. TELMA RAJU SRI. AADITYA NAIR RESPONDENT

S : 1 INCOME TAX OFFICER, WARD INTERNATIONAL TAXATION, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN – 673001. 2 DISPUTE RESOLUTION PANEL-2, BENGALURU, 'A' WING, 4TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BANGALORE, PIN – 560034. BY ADVS. SRI. JOSE JOSEPH – SC - INCOME TAX DEPARTMENT SRI. G. KEERTHIVAS SRI. P. G. JAYASHANKAR - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2024, ALONG WITH WP(C).24760/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NOS. 24760, 24847 & 24857 OF 2023 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 12TH DAY OF JANUARY 2024 / 22ND POUSHA, 1945 WP(C) NO. 24857 OF 2023 PETITIONER: MUHAMMED KALLAT, KALLAT VILLA, NEAR MCF SCHOOL, BYE PASS ROAD, KALPETTA, WAYANAD, KERALA, PIN – 673121. BY ADVS. SRI. ANIL D. NAIR SMT. TELMA RAJU SRI. AADITYA NAIR RESPONDENT

S : 1 INCOME TAX OFFICER, WARD INTERNATIONAL TAXATION, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN – 673001. 2 DISPUTE RESOLUTION PANEL-2, BENGALURU, 'A' WING, 4TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BANGALORE, PIN – 560034. BY ADVS. SRI. JOSE JOSEPH – SC - INCOME TAX DEPARTMENT SRI. G. KEERTHIVAS SRI. P. G. JAYASHANKAR - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2024, ALONG WITH WP(C).24760/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NOS. 24760, 24847 & 24857 OF 2023 4 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) Nos. 24760, 24847 & 24857 of 2023 ------------------------- Dated this the 12th day of January, 2024 JUDGMENT 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

WP(C) NOS. 24760, 24847 & 24857 OF 2023 5 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. Sd/- DINESH KUMAR SINGH JUDGE Svn

WP(C) NOS. 24760, 24847 & 24857 OF 2023 6 APPENDIX OF WP(C) 24760/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF DRAFT ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2015-16 DATED 30.5.2023 ISSUED BY THE 1ST RESPONDENT EXHIBIT P2 TRUE COPY OF THE PASSPORT OF THE PETITIONER EXHIBIT P3 TRUE COPY OF THE LETTER DATED 30.06.2023 ADDRESSED TO THE 2ND RESPONDENT BY THE PETITIONER EXHIBIT P4 TRUE COPY OF THE REPLY FILED IN FORM 34BC BY THE PETITIONER EXHIBIT P5 TRUE COPY OF THE E-MAIL ADDRESSED TO THE PETITIONER BY THE 2ND RESPONDENT ON 12.7.2023 EXHIBIT P6 TRUE COPY OF THE LETTER DATED 19.07.2023 ADDRESSED TO THE 2ND RESPONDENT BY THE PETITIONER EXHIBIT P7 TRUE COPY OF THE LETTER DATED 20.07.2023 ADDRESSED TO THE PETITIONER BY THE 2ND RESPONDENT EXHIBIT P8 TRUE COPY OF THE ASSESSMENT ORDER DATED 19.07.2023 ISSUED BY THE 1ST RESPONDENT

WP(C) NOS. 24760, 24847 & 24857 OF 2023 7 APPENDIX OF WP(C) 24847/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF DRAFT ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2016-17 DATED 30.5.2023 ISSUED BY THE 1ST RESPONDENT EXHIBIT P2 TRUE COPY OF THE PASSPORT OF THE PETITIONER EXHIBIT P3 TRUE COPY OF THE LETTER DATED 30.06.2023 ADDRESSED TO THE 2ND RESPONDENT BY THE PETITIONER EXHIBIT P4 TRUE COPY OF THE REPLY FILED IN FORM 34BC BY THE PETITIONER EXHIBIT P5 TRUE COPY OF THE E-MAIL ADDRESSED TO THE PETITIONER BY THE 2ND RESPONDENT ON 12.7.2023 EXHIBIT P6 TRUE COPY OF THE LETTER DATED 19.07.2023 ADDRESSED TO THE 2ND RESPONDENT BY THE PETITIONER EXHIBIT P7 TRUE COPY OF THE LETTER DATED 20.07.2023 ADDRESSED TO THE PETITIONER BY THE 2ND RESPONDENT EXHIBIT P8 TRUE COPY OF THE ASSESSMENT ORDER DATED 19.07.2023 ISSUED BY THE 1ST RESPONDENT

WP(C) NOS. 24760, 24847 & 24857 OF 2023 8 APPENDIX OF WP(C) 24857/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF DRAFT ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2017-18 DATED 30.5.2023 ISSUED BY THE 1ST RESPONDENT EXHIBIT P2 TRUE COPY OF THE PASSPORT OF THE PETITIONER SHOWING HIS ARRIVAL INTO INDIA ON 9.6.2023 EXHIBIT P3 TRUE COPY OF THE LETTER DATED 30.06.2023 ADDRESSED TO THE 2ND RESPONDENT BY THE PETITIONER EXHIBIT P4 TRUE COPY OF THE REPLY FILED IN FORM 34BC BY THE PETITIONER EXHIBIT P5 TRUE COPY OF THE E-MAIL ADDRESSED TO THE PETITIONER BY THE 2ND RESPONDENT ON 12.7.2023 EXHIBIT P6 TRUE COPY OF THE LETTER DATED 19.07.2023 ADDRESSED TO THE 2ND RESPONDENT BY THE PETITIONER EXHIBIT P7 TRUE COPY OF THE LETTER DATED 20.07.2023 ADDRESSED TO THE PETITIONER BY THE 2ND RESPONDENT EXHIBIT P8 TRUE COPY OF THE ASSESSMENT ORDER DATED 19.07.2023 ISSUED BY THE 1ST RESPONDENT

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