Al Manama Retail Private Limited V. The National E-Assessment Centre Delhi Income Tax Department, Ministry of Finance and Union of India

WP(C)/11704/2021

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The case involves Al Manama Retail Private Limited, which challenged the assessment order and demand notice issued by the National E-Assessment Centre under the Income Tax Act for the assessment year 2018-19. The petitioner reported a loss in their tax return, but subsequent assessments led to a tax liability being imposed. The petitioner argued that the assessment was conducted without proper consideration of their responses due to the limited time provided for submission during a lockdown period. The court examined the procedural aspects of the assessment under the Faceless Assessment Scheme and concluded that the petitioner was given sufficient opportunity to present their case, thus dismissing the writ petition but allowing for an appeal.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 816089 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 16-06-2021
• Assessment Year: misc
• Other Referred Cases: Shivram Poddar v. ITO, Vodafone India Ltd vs. UOI
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAVINDRANATHA MENON; JOSE JOSEPH
• Assessee Lawyers: SHAMEEM AHAMED CYRIAC TOM
• Keywords: Assessment Order; Demand notice; Faceless Assessment Scheme; Income Tax Return; Natural Justice
• Section: 142(1); 143(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN WEDNESDAY, THE 16TH DAY OF JUNE 2021 / 26TH JYAISHTA, 1943 WP(C) NO. 11704 OF 2021 PETITIONER/S: AL MANAMA RETAIL PRIVATE LIMITED MANAM HOUSE BUILDING NO MP X 614, UMAYANALLOOR POST, KOLLAM 691 589 KERALA, (REPRESENTED BY ITS MANAGING DIRECTOR MR. A.K. SABEER.) BY ADVS. M.P.SHAMEEM AHAMED CYRIAC TOM RESPONDENT/S: 1 THE NATIONAL E-ASSESSMENT CENTRE DELHI INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, 401, 2ND FLOOR, E-RAMP, JWAHARLAL NEHRU STADIUM, DELHI 110003. 2 UNION OF INDIA REPRESENTED BY REVENUE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMEN OF INDIA, NORTH BLOCK, NEW DELHI 110001. BY ADVS. P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX OTHER PRESENT: ASG P.VIJAYAKUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.06.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.11704 of 2021 2 JUDGMENT Dated this the 16th day of June, 2021 Petitioner is aggrieved by Ext.P10 assessment order and Ext.P11 demand notice for the assessment year 2018-19. The essential facts are as under: The petitioner had filed Ext.P1 income tax return for the assessment year 2018-19, reporting a loss of Rs.12,90,41,539/-. Thereafter, the prescribed authority issued notice under Section 143 (2) of the Income Tax Act seeking details relating to the return submitted by the petitioner. Later, by Ext.P3, the petitioner was informed that the assessment will be completed under the Faceless Assessment Scheme, 2019. This was followed up with Ext.P4 notice requiring the petitioner to file certain documents and accounts. On the requisite details being uploaded, the W.P.(C) No.11704 of 2021 3 petitioner was issued with Ext.P6 notice seeking clarification on certain points. Even though, the queries were answered vide Ext.P7 dated 29.04.2021, the authority issued Ext.P8 show cause notice, without considering the reply. Along with the show cause notice, the draft assessment order was also enclosed. Under the show cause notice received at 4.35 p.m on 30.04.2021 through email, the petitioner was given time for submitting reply till the midnight of 03.05.2021. As the lockdown imposed by the Government was in force, the petitioner was not able to co-ordinate with the auditors and to submit the reply within the limited time granted. This resulted in Ext.P10 assessment order and Ext.P11 demand notice being issued, fixing the total income at Rs.6,97,15,801/- and the tax liability at Rs.3,17,65,650/-. W.P.(C) No.11704 of 2021 4 2. I heard Sri.Shameem Ahamed M.P, learned Counsel for the petitioner and Sri.Jose Joseph, learned Standing Counsel for the Income Tax Department. 3. Having heard the learned Counsel, the first question that arises for consideration is regarding the maintainability of the writ petition, in view of the efficacious alternative remedy of appeal available under the statute. The law is well settled that, when alternative remedy is available, the extraordinary jurisdiction under Article 226 is to be exercised only when the fundamental rights are found to have been infringed or when the order is issued without jurisdiction. The Honourable Apex Court has laid down this position in a catena of decisions. The relevant portion of one such decision in [Shivram Poddar v. ITO, AIR 1964 SC 1095 : (1964) 51 ITR W.P.(C) No.11704 of 2021 5 823], is extracted hereunder: “13. We may observe that we have proceeded to decide this case on the footing that the business of the firm was discontinued on dissolution of the firm. It is however necessary once more to observe, as we did in O.A. Abraham case [(1961) 2 SCR 765] that the Income Tax Act provides a complete machinery for assessment of tax, and for relief in respect of improper or erroneous orders made by the Revenue Authorities. It is for the Revenue Authorities to ascertain the facts applicable to a particular situation, and to grant appropriate relief in the matter of assessment of tax. Resort to the High Court in exercise of its extra-ordinary jurisdiction conferred or recognised by the Constitution in matters relating to assessment levy and collection of Income tax may be permitted only when questions of infringement of fundamental rights arise, or where on undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to by-pass the provisions of the Income Tax Act by inviting the High Court to decide questions which are primarily within the jurisdiction of the Revenue Authorities, the party approaching the Court has often to ask the Court to make assumptions of facts which remain to be investigated by the Revenue Authorities.” 4. The discussion of facts in Ext.P10 order shows that, initially a notice under Section 143(2) of the Income Tax Act was issued on W.P.(C) No.11704 of 2021 6 22.09.2019, followed by notices dated 16.12.2020, 27.12.2020 and 19.04.2021 under Section 142 (1) of the Act. Thereafter, show cause notice dated 30.04.2021 along with draft assessment order, computation sheet and demand notice was issued, requiring the assessee to show cause as to why the assessment should not be completed as per the draft assessment order. The assessee was given time till 11.59 p.m on 03.05.2021 to submit its reply, if any. The assessee having failed to respond, Ext.P10 assessment order was passed. The very objective of the scheme being to speed up the process of assessments, the petitioner cannot complain about the limited time granted for submitting reply, particularly when the entire procedure is via electronic mode. In such circumstances, the contention that the assessment order was passed without granting sufficient W.P.(C) No.11704 of 2021 7 opportunity and therefore violates the principles of natural justice cannot be countenanced. 5. Learned Counsel for the petitioner raised an alternative plea that in the event of the writ petition being dismissed, the petitioner may be given liberty to file the appeal and recovery pursuant to Ext.P10 may be kept in abeyance for enabling the petitioner to avail the appellate remedy. In the circumstances, the writ petition is dismissed, without prejudice to the petitioner's right to file statutory appeal against Ext.P10 and directing the recovery proceedings based on Ext.P11 to be kept in abeyance for one month. Sd/- V.G.ARUN JUDGE Scl/16.06.2021 W.P.(C) No.11704 of 2021 8 APPENDIX PETITIONER'S/S EXHIBITS: Exhibit P1 COPY OF THE ACKNOWLEDGEMENT FOR FILING INCOME TAX RETURN ALONG WITH STATEMENT OF INCOME FOR THE ASSESSMENT YEAR 2018- 19. Exhibit P2 COPY OF THE NOTICE DATED 22.09.2019 ISSUED U/S. 143(2) Exhibit P11 COPY OF DEMAND NOTICE DATED 4.05.2021. Exhibit P12 COPY OF JUDGEMENT IN THE CASE OF VODAFONE INDIA LTD VS. UOI REPORTED IN (2014) 265 CTR (BOM ) 42. Exhibit P3 COPY OF THE LETTER DATED 15.10.2020 ISSUED BY 1ST RESPONDENT. Exhibit P4 COPY OF THE NOTICE DATED 27.12.2020 U/S 142 (1) Exhibit P5 COPY OF REPLY DATED 28.01.2021 LONG WITH E-PROCEEDINGS ACKNOWLEDGEMENT DATED 30.01.2021. Exhibit P6 COPY OF NOTICE DATED 19.04.2021 ISSUED BY 1ST RESPONDET U/S/ 142(1) Exhibit P7 COPY OF REPLY DATED 29.04.2201 ALONG WITH E-PROCEEDINGS ACKNOWLEDGEMENT. Exhibit P8 COPY OF THE SHOW CAUSE NOTIC DATED 30.04.2021. Exhibit P9 COPY OF GOVERNMENT ORDER G.O.(RT) NO. 391/2021/DMD DATED 30.04.2021. Exhibit P10 COPY OF ASSESSMENT ORDER DATED 4.05.2021 "