No Violation of Principle of Natural Justice on Income Tax addition made u/s 68 of Income Tax Act: Kerala HC directs to File Statutory Appeal [Read Order}

Top Stories No Violation of Principle of Natural Justice on Income Tax addition made u/s 68 of Income Tax Act: Kerala HC directs to File Statutory Appeal [Read Order] By Yogitha S. Yogesh – On December 11, 2023 3:30 pm – 2 mins read The Kerala High Court was directed to file a statutory appeal against the Income Tax Addition under section 68 of the Income Tax Act, 1961 was made in violation of the principle of Natural Justice. Heartwares Medicals India Private Limited, the petitioner challenged the assessment order completed under section 143(3) r/w 144B of the Income Tax Act, 1961 (‘the IT Act’), on the premises that the addition made under Section 68 of  6,96,31,355/- and assessed at a higher rate under section 115BBE was against the provisions of the statute and in violation of the principles of natural justice. After hearing both sides, the learned Single Judge dismissed the writ petition, relegating the appellant to the statutory appellate remedy.

It is challenging the said judgment; the appellant is before us. Sri. Anil D. Nair, the counsel appeared for the appellant and Sri.P.R.Ajith Kumar, the standing counsel appeared for the Income Tax Department. The appellant has a statutory remedy of appeal against the assessment order.  Instead of exhausting the remedy, the appellant rushed to the court with a writ petition. The appellant was put to notice, and after that, the assessment proceedings were completed.  In exercising the power of judicial review under Article 226 of the Constitution of India, the court cannot consider the merits of the assessment order.  It was found that the impugned assessment order is not without jurisdiction or that there has been any violation of the principles of natural justice.

Hence, the learned Single Judge was justified in relegating the appellant to the statutory appellate remedy. A division bench of Dr Justice A K Jayasankaran Nambiar & Dr Justice Kauser Edappagath permitted the appellant to file an appeal under Section 246A of the IT Act before the Appellate Authority against the impugned assessment order within one week from today. The appellant is also free to apply for a stay. If such an appeal and stay application are filed, the Appellate Authority is directed to consider and dispose of either the appeal itself or the stay application within one month from the receipt of the same after hearing both sides. Further held that during the said period of one month, recovery proceedings against the appellant for recovery of the amounts confirmed by the assessment order shall be kept in abeyance.

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