Reopening Notice under Section 148 of the Income Tax Act valid if assessee had failed to avail of opportunities to respond to the notice.

Summary in Key Points:

The assessee sold an immovable property during the relevant assessment year but failed to file a return.
A notice under section 148A(b) was issued, alleging that income chargeable to tax had escaped assessment.
The assessee initially responded to the notice and requested additional time for a detailed response, which was granted.
However, the assessee did not provide any further response.
The Assessing Officer then issued a reopening notice under section 148(d).
The assessee challenged the reopening notice, claiming a lack of sufficient opportunity to respond to the section 148A(b) notice.
It was noted that the assessee was served notices both physically and via email, and had provided an email address for communication.
The assessee had responded to the notice under section 148A(b) at least once.

Decision:

The court held that the assessee had been granted sufficient opportunity to respond to the notice.
The repeated notices and the assessee’s initial response indicated awareness of the proceedings.
The assessee failed to avail the opportunity granted.
There was no violation of the principles of natural justice.

In favour of the revenue.

HIGH COURT OF KERALA

Pattaveettil Parameswar Ramachandran

Income-tax Officer

Bechu Kurian Thomas, J.

WP(C) NO. 26170 OF 2024

DECEMBER 12, 2024

K. Krishna, Adv. and Achyuth Menon, Adv. for the Petitioner. Jose Joseph, Senior Standing Counsel and Cyriac Tom, Standing Counsel for the Respondent.

JUDGMENT

1. Petitioner challenges Exhibit-P13 order of assessment for the year 2016-2017. The impugned order dated 22.01.2024 is stated to have been issued in violation of principles of natural justice and hence, petitioner seeks the intervention of this Court under Article 226 of the Constitution of India.

2. Petitioner had sold an immovable property during the year financial year 2015-16 but he failed to file a return for the assessment year 2016-17. Alleging that income chargeable to tax has escaped assessment for the said assessment year, a notice under Section 148A(b) of the Income Tax Act, 1961 (for short, ‘the Act’) was issued on 02.02.2023 by the jurisdictional Income Tax Officer. The assessee filed a response pursuant to the said notice. He also sought further time to file a detailed response and such time was also granted till 13-03-2023. However, since thereafter, there was no response, the assessing officer passing an order under section 148(d) of the Act. Thereafter, a notice under section 148 of the Act was issued, but again the assessee failed to file any return of income.

3. According to the petitioner, the short term capital gain calculated by the Income Tax Assessing Officer as per Exhibit-P13 is erroneous and double the total sale consideration was taken by the officer without any basis, that too, on some vague information received by them, thereby creating a huge demand. It is also pleaded that, contrary to the faceless assessment scheme, the first notice was issued to the petitioner under Section 148A of the Act by the jurisdictional Assessing Officer on 02.02.2023, and subsequently, proceedings were shifted to the faceless assessment scheme.

4. A statement has been filed on behalf of the first respondent pointing out that Exhibit-P1 notice dated 02.02.2023 was issued by the Income Tax Officer and delivered through the email ID specified in the last return by the assessee. The delivery status of Exhibit-P1 notice showed it as delivered. Apart from the above, the order itself refers to the notices under Section 148A(b) of the Act served on the assessee through an email on 08.03.2023, and the order under Section 148A(d) of the Act was delivered on 29.03.2023. The notice under Section 148 of the Act issued thereafter is seen to have been delivered to the petitioner’s email ID. After the faceless assessment scheme commenced sufficient opportunity was granted to the petitioner in the form of Exhibit-P7, Exhibit-P8, Exhibit-P9, Exhibit-P10, Exhibit-P11 and again by Exhibit-P12 show cause notice. Despite the above, petitioner did not respond, and thereafter, Exhibit-P13 assessment order was issued by the assessee, which was delivered on 22.01.2024.

5. I have heard Smt. K. Krishna, the learned counsel for the petitioner and Sri. Jose Joseph, the learned Standing Counsel for the Income Tax Department.

6. A perusal of Exhibit-P13 reveals that sufficient opportunities were granted to the petitioner by serving notices upon him both physically as well as through email. In fact, a response was filed by the petitioner pursuant to the notice under Section 148A(b) of the Act and he had even sought further time for filing an additional response. Subsequent thereto, no objection was filed, and then the Income Tax Officer passed appropriate orders in accordance with law.

7. Moreover, in Annexure-R1A, petitioner himself had provided an e-mail address for communication. The response to the notice under Section 148A(b) was submitted through that e-mail ID. Hence, notices issued to that e-mail ID cannot be said to irregular.

8. Considering the aforesaid circumstances, it cannot be said that the petitioner had not been granted notice of the proceedings. The repeated notices sent to the petitioner were met with a response once, which itself indicates that the petitioner was aware of the proceeding. It has been repeatedly held by the Supreme Court and various other High Courts that failure to avail of an opportunity cannot be regarded as absence of opportunity.

9. In the instant case, it is evident that the petitioner had failed to avail the opportunity granted. The contention that he was unaware of the technological mode of serving notices cannot be accepted in the facts and circumstances of the case. Hence, I do not prima facie find any merit in the contention now raised by the petitioner regarding violation of principles of natural justice.

10. Having regard to the aforesaid circumstances, I am of the view that this is not a fit case for this Court to interfere in the exercise of the jurisdiction under Article 226 of the Constitution of India. Hence, I dismiss this writ petition, reserving the liberty of the petitioner to pursue the statutory remedies available under law. All questions raised by the petitioner in this writ petition are also left open to be agitated in the appeal, if filed. It is also clarified that the period spent by the petitioner in pursuing this writ petition from 19.07.2024 till today, shall stand excluded while calculating the period of limitation for preferring an appeal.

The writ petition is dismissed.