A Single Bench of Kerala High Court has recently set aside the income tax demand notice issued to the assessee – P A Logistics for violation of natural justice principles of due notice and fair hearing.
The National Faceless Assessment Center had issued pre-assessment notices to the petitioner which, according to the petitioner, never came to the notice of the petitioner.
The petitioner, represented by Advocates Mohan Pulikkal, Narayanan P Potty, Manju Rajan and Amrutha Vidyadharan submitted that the petitioner’s firm had been dissolved with effect from 31-03-2021.
In regard to the demand, it was submitted that the petitioner’s firm had availed a borrowing of 83 Lakh Rupees from Hinduja Leyland Finance Ltd and the same was used for purchase of commercial vehicles.The petitioner also submitted that the reassessment proceedings in respect of the AY 2017-2018, have been taken on the premise that there is no proper explanation for the source of funds to purchase these commercial vehicles.
It was also argued that the notices issued by the National Faceless Assessment Center (NFAC) were to the email address of the dissolved firm and therefore the petitioner was not in a position to respond to those notices.
On behalf of the revenue, Standing Counsel Jose Joseph submitted that notices were initially issued to the petitioner by the Jurisdictional Assessing Officer and some of these notices had been responded to by the petitioner.
The existence of an alternate remedy was also relied upon by the revenue as a ground to pursue rejection of the petition. It was submitted that the contentions of the petitioner can very well be taken up in an appeal against Ext.P3 order of assessment and this Court should not exercise its jurisdiction under Article 226 of the Constitution of India, to interfere with Ext.P3 order.
The decision of the Constitutional Bench in Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District I, Calcutta and Anr was relied upon by the Bench in allowing the appeal for statistical purposes. The matter was consequently restored to the NFAC for fresh assessment by the Single Bench of Justice Gopinath P.
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