Alm Industries Limited V. Deputy Commissioner Of Income Tax And 3 Others

WTAX/979/2021

AI Insights

The case involves Alm Industries Limited challenging the reassessment notice issued by the Deputy Commissioner of Income Tax, Muzaffarnagar, for the Assessment Year 2014-15. The primary contention was the lack of communication of detailed reasons for reassessment at the time the notice was served. Initially, the notice served on 31.03.2021 did not include detailed reasons, which were only communicated later on 10.09.2021. The court found that the petitioner was not given a fair opportunity to contest the reassessment due to this incomplete communication, leading to the setting aside of the earlier order and providing the petitioner an opportunity to file objections.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 684420 (HC-UTTAR_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 06-12-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A S G I; GAURAV MAHAJAN; KRISHNA AGARAWAL
• Assessee Lawyers: SUYASH AGARWAL
• Keywords: Communication; Jurisdiction; Notice; Re-assessment proceeding; Detailed reasons
• Section: 148

Judgement Text

"Court No. - 21 Case :- WRIT TAX No. - 979 of 2021 Petitioner :- Alm Industries Limited Respondent :- Deputy Commissioner Of Income Tax And 3 Others Counsel for Petitioner :- Suyash Agarwal Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan,Krishna Agarawal Hon'ble Naheed Ara Moonis,J. Hon'ble Saumitra Dayal Singh,J. 1. Heard Sri Suyash Agarwal, learned counsel for the petitioner and Sri Krishna Agarwal, learned counsel for the revenue. 2. Challenge has been raised to the re-assessment proceeding initiated against the petitioner for the A.Y. 2014-15 vide reassessment notice issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') dated 31.03.2021 by the Deputy Commissioner Income Tax Circle-3(1)(1), Muzaffarnagar. 3. Amongst others, it has been submitted by learned counsel for the petitioner that detailed reasons to believe claimed to have been recorded by the petitioner's assessing authority were never communicated to the petitioner alongwith the reassessment notice served on 31.03.2021. The detailed reasons referred to in the order dated 10.09.2021 were first communicated alongwith that communication. On this submission, we had called for the record of the assessing authority. The same has been produced today. 4. Having heard learned counsel for the parties and having perused the record, it does transpire that though the communication dated 31.03.2021 did not contain detailed reasons, at present, on a prima facie basis it does appear, such reasons were recorded on 23.06.2021. Necessary approval was also sought from and was granted by the Additional Commissioner on 28.03.2021. Thereafter, reassessment notice was issued on 31.03.2021. The contention of learned counsel for the revenue is that detailed reasons were uploaded on the portal and were thus available to the petitioner may not conclude the proceedings as undisputedly the assessing authority served on the petitioner a physical/hard copy of the notice through post, that did not contain those reasons to believe. 5. The objection that had been filed by the petitioner also indicates, it had only received the reassessment notice and the document containing the alleged reasons dated 23.06.2021 which only mentioned one line reason being \"Source of share application moneys not satisfactorily explained.\" 6. In such facts, it is difficult to accept the contention of learned counsel for the revenue that the assessing authority has dealt with the objections as were filed. Once the petitioner assessee is shown to have been obstructed from raising comprehensive objection on account of incomplete communication being made to it, it is not permissible to allow the revenue authority to reject that objection and assume jurisdiction on the basis of detailed reasons recorded that were not communicated to the petitioner assessee till issuance of communication dated 10.09.2021. 7. Accordingly, the writ petition is disposed of with the following directions: (i) the order dated 10.09.2021 insofar as it seeks to reject the petitioner's objection on assumption of jurisdiction to reassess the petitioner for A.Y. 2014-15 is set aside; (ii) the petitioner shall have two weeks' time from now to file a detailed objection to the reasons to believe contained in the order dated 10.09.2021; (iii) upon such objection filed, the assessing authority may fix a short date for personal hearing on the objection, within next two weeks therefrom. 8. Upon hearing the petitioner, assessing authority may then pass appropriate order on petitioner's objection as to jurisdiction and communicate the same within a further period of two weeks. 9. The reassessment proceeding, if any, shall abide by the order to be passed by the assessing authority on the objection filed by the petitioner, pursuant to this order. 10. The original record has been returned to learned counsel for the revenue. Order Date :- 6.12.2021 S.Chaurasia "