Assessee can Challenge Final Order of Re-Assessment but not Interim Rejection of Documents by Adjudicating Authority: Madras HC [Read Order]

The division bench of Madras High Court has held that assessee can challenge final order of re- assessment but not interim rejection of documents by adjudicating authority.

The petitioner, Pentamedia Graphics Limited is engaged in the business of development and export of computer software. The respondent proposed to reopen the concluded assessment on the ground that the appellant has not deducted Tax Deducted at Source (TDS) under Section 195 of the Act on the amount paid to the foreign companies towards multimedia charges for the assessment year 2004-2005.

The petitioner sent their objections in the form of a letter dated 26.12.2011 and requested the respondent to drop the reopen proceedings. Thereafter, the respondent passed the order under Section 143 (3) read with Section 147 of the Act raising an additional demand of Rs.33,52,80,175/- towards tax. Against which the petitioner filed Writ petition before the High Court and the High Court held that the objections raised by the appellant on 26.12.2011 have not been considered by the respondent, hence remanded the matter back to the respondent. Pursuant to the directions, the respondent rejected the objections raised by the petitioner on 26.12.2011, against which the petitioner filed Writ petition.

The High Court observed that a final order in the re-assessment proceedings initiated by the respondent is yet to be passed, if an adverse order is passed by the respondent, then it is open to the appellant to approach the appellate authority by filing an appeal. The petitioner is only directed to participate in the re-assessment proceedings and to place all the materials and legal issues before the Assessing Authority for consideration. Such a direction in the given facts and circumstance of the case, is proper and it does not call for any interference by Court.

The Coram of Mr. Justice R. Mahadeva and Mr. Justice J. Sathya Narayana Prasad has held that “the respondent is hereby directed to afford an opportunity of hearing to the appellant and after considering all the objections raised, pass appropriate orders on merits and in accordance with law within a period of three months from the date of receipt of a copy of this order”.

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