The Kerala High Court upheld the order of the single judge which allowed specified time to seek statutory remedy under the Income Tax Act, 1961 on the challenge aginst demand of Income Tax made on Interstate spices Dealers based on High-Value Transaction. The Court found that the appellant admittedly did not file any reply to the show cause notice even within the extended period sought by him.
Shaju Pachelil Pathrose, the petitioner challenged the judgment of the Single Judge in the writ petition passed earlier. The appellant is engaged in the business of arranging the purchase of spices for inter-state dealers. The appellant’s income tax assessment for the year 2016-17 was reopened on the ground that he made high-value transactions during the period 1/1/2015 to 31/12/2015.
The assessing officer issued a show cause notice dated 3/5/2023 to the appellant, giving three days to respond. The appellant applied for an extension of time till 20/5/2023 to give the reply. In the meanwhile, the assessing officer issued a second show cause notice dated 17/5/2023 that was identical in all respects to the earlier notice with a direction to respond to the same within two days. The appellant sought a further time extension till 2/6/2023.
An assessment order was passed holding that there was no response from the appellant to the show cause notice, and accordingly, the proposal was confirmed. The appellant challenged the order before the Single Judge, who dismissed the same as per the impugned judgment.
Sri. Abraham Joseph Markos appeared for the appellant and Sri.P.R.Ajith Kumar appeared for the respondents.
The Court found that the first show cause notice was issued on 3/5/2023, giving the appellant three days to respond. The appellant sought time till 20/5/2023 and the assessing officer virtually allowed the said request. The second notice dated 17/5/2023 was identical to the earlier notice but with a different date thereon and required the appellant to respond to the notice before 20/5/2023. Again, the appellant asked for time and did not file a reply. Thus, the appellant admittedly did not file any reply to the show cause notice even within the extended period sought for by him.
A division bench of Dr Justice A K Jayasankaran Nambiar & Dr Justice Kauser Edappagath viewed that the Single Judge rightly dismissed the writ petition, giving liberty to the appellant to file a statutory appeal within fifteen days before the appellate authority. While dismissing the petition, the court extended the fifteen days’ time granted to prefer an appeal and directed to consider the stay application within two months.
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