Kerala High Court: Income Tax Assessing Authority Empowered to Issue Multiple Notices
Synthite Industries Private Limited Vs ACIT (Kerala High Court)
In a recent case before the Kerala High Court, the issue of multiple notices issued by the Income Tax Assessing Authority came under scrutiny. Here’s a breakdown of the case and its implications:
Background:
- The petitioner had previously challenged an assessment order passed under Sections 143(3), 263, and 144B of the Income Tax Act, 1961, for the assessment year 2016-17.
- The petitioner argued that they were not given sufficient opportunity to respond to the show cause notice.
- The Kerala High Court, in its judgment dated 10.2.2023, allowed the petitioner’s plea and quashed the assessment order. The court directed the authority to redo the process and provide the petitioner with a meaningful opportunity to respond.
Current Dispute:
- The petitioner returned to the court with a new writ petition against notices (Exts.P9 and P11) issued under Section 142(1) of the Act, seeking explanations on other issues.
- The petitioner contended that since the assessment order was set aside and remanded, the assessing authority had no authority to demand explanations on unrelated matters.
Observations:
- The court noted that there is no legal restriction on the assessing authority to issue multiple notices.
- The direction to redo the assessment process did not preclude the authority from seeking explanations on other income sources if they had relevant information.
- The court emphasized that the assessing authority retains the power to seek explanations on additional matters, even after a remand, if deemed necessary.
Conclusion:
- The court dismissed the petitioner’s writ petition, stating that the notices issued were within the jurisdiction of the assessing authority.
- It affirmed the authority’s right to seek clarifications on various income sources, even after a previous assessment order was set aside.
- The decision underscores the assessing authority’s discretion to issue multiple notices to ensure comprehensive assessment proceedings.
In essence, this case reaffirms the procedural flexibility of the Income Tax Assessing Authority and highlights the importance of complying with subsequent notices issued during the assessment process.
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