The Madras High Court quashed proceedings on escapement of income when there was document showing acknowledgement of Income Tax Officer ( ITO ) on filing reply to income tax notice.
A notice under Section 148 of the Income Tax Act, 1961 (Income Tax Act), was issued to the petitioner in respect of alleged escaped assessment for the Assessment Year 2013-14. Pursuant to directions issued by the Hon’ble Supreme Court in Union of India v. Ashish Agarwal, such notice was treated as a notice under the amended provision [Section 148 A(b)] and the petitioner was called upon on 23.05.2022 to submit a reply thereto.
According to the petitioner, the e-filing portal did not include a tab for the submission of an online reply. Consequently, the petitioner submitted the reply physically on 01.06.2022 and obtained an acknowledgment from the office of the Assistant Commissioner of Income Tax. A further reply was also submitted on 02.06.2022. In spite of such replies, the counsel for the petitioner submitted that the impugned order proceeds on the basis that the assessee did not submit a reply to notice dated 23.05.2022. The present writ petition arose in the said facts and circumstances.
The counsel for the respondent submitted that there was sufficient basis for the initiation of proceedings in respect of escaped assessment. Without prejudice to the contentions on merits, the counsel submitted that the matter may be remanded for consideration of the objections of the petitioner.
A Single Bench of Justice Senthil Kumar Ramamoorthy observed that “The documents on record include the reply dated 01.06.2022 of the petitioner to notice dated 23.05.2022. The said reply also bears acknowledgment dated 01.06.2022 of the relevant Income Tax Office. A subsequent reply dated 02.06.2022 is also on record and, likewise, the said reply also bears acknowledgment dated 02.06.2022 of the relevant office.”
“For reasons set out above, this writ petition is allowed by quashing impugned order dated 30.07.2022 and the notices issued pursuant thereto. As a corollary, the matter is remanded for reconsideration. The Assessing Officer is directed to proceed with the matter on merits after duly considering the objections filed by the petitioner on 01.06.2022 and 02.06.2022 and after providing a reasonable opportunity to the petitioner” the Court noted.
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