ANEESH , V. THE UNION OF INDIA,

WP(C)/31553/2022

AI Insights

The case involves a writ petition filed by Aneesh against the assessment order issued by the Deputy Commissioner of Income Tax for the assessment year 2017-2018. The petitioner did not file his income tax return, and upon investigation, it was found that he received a substantial amount from a company, on which TDS was deducted. The income tax authorities issued several notices to the petitioner, which went unanswered, leading to a final assessment order. The petitioner challenged this order, citing a violation of the principles of natural justice, as he was given only one day to respond to the final show cause notice. The court agreed with the petitioner on this procedural flaw and remanded the case for a proper hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 724987 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-12-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MALINI MENON
• Assessee Lawyers: KURYAN THOMAS; M NAMBIAR; K JOSON MANAVALAN; PAULOSE ABRAHAM; RAJAKANNAN
• Keywords: Assessment Order; Income Tax; Natural Justice; Non-filing of return; Show cause notice; TDS Deduction
• Section: 147; 144; 133(6); 234B; 234A; 271F; 234C; 194H; 271A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 4TH DAY OF DECEMBER 2023 / 13TH AGRAHAYANA, 1945 WP(C) NO. 31553 OF 2022 PETITIONER/S: ANEESH , AGED 35 YEARS SAI KRISHNA, MAHILASAMAYAM ROAD, MAMMIYOOR, GURUVAYUR POST, THRISSUR- 680 101. (PRESENTLY RESIDING AT TATA TRITVAM, 9B, ICONIC TOWER, QUEENS WAY, KOCHI- 682 012), PIN - 682012 BY ADVS. KURYAN THOMAS M.GOPIKRISHNAN NAMBIAR K.JOHN MATHAI JOSON MANAVALAN PAULOSE C. ABRAHAM RAJA KANNAN RESPONDENT/S: 1 THE UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NORTH BLOCK, NEW DELHI., PIN - 110001 2 DEPUTY COMMISSIONER OF INCOME TAX, DCIT CIRCLE 1 (1) & TPS, AAYAKAR BHAVAN, INCOME TAX OFFICE,SAKTHANTHAMPURAN NAGAR, THRISSUR., PIN - 680001 3 THE ADDITIONAL/ JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI., PIN - 110003 BY ADV MALINI K. MENON, CGC OTHER PRESENT: JOSE JOSEPH-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 31553 OF 2022 2 JUDGMENT Dated this the 4th day of December, 2023 1.The present writ petition has been filed impugning the assessment order dated 31.03.2022 under Section 147 r/w Section 144 of the Income Tax Act, 1961 (‘the IT Act’ for short), in respect of the assessment year 2017-2018. The assessee did not file the return of his income for the said assessment year. As per the information received through the Multi-layer NMS cases in AIMS module of ITBA, it was seen that the assessee during the financial year 2016-2017, received Rs. 1,42,48,884/- from M/s Smart Way India Enterprises LLP on which TDS was deducted under Section 194H for Rs.8,26,336/-. 2.Notice under Section 133(6) of the IT Act was issued after taking approval of the competent authority. The assessee did not furnish details regarding the receipt of commission of Rs.1,42,48,884/- neither any of other particulars. 3.The petitioner’s case was reopened for the assessment under Section 147 of the IT Act after obtaining approval from the competent authority. Notice under Section 148 of the IT Act was issued on 28.03.2021. Several notices were issued to the petitioner but he did not respond to any of the notices and finally, notice dated 29.03.2022 was issued asking the petitioner to show cause why the proposed addition should not be made. The draft assessment order was forwarded to the National Faceless Assessment Authority. The final notice was sent to the WP(C) NO. 31553 OF 2022 3 petitioner on 29.03.2022 and the petitioner was given only one day time for filing the reply i.e., on 30.03.2022. Thereafter, the assessment order was passed on 31.03.2022, assessing the total income for Rs.1,42,48,884/-. as evidenced by Ext.P12. Tax was calculated after giving credit for the prepaid taxes after due verification. Interest charged under Section 234A, 234B and 234C was demanded and penalty proceedings under Section 271F of the IT Act for not filing ITR and under Section 271A of the IT Act for failure to maintain books of accounts were directed to be initiated. 4. I have heard the learned counsel for the petitioner and Sri. Jose Joseph, the learned Standing Counsel for the respondents. 5.Though some other grounds besides the violation of the principles of natural justice have been urged. However, I find no substance in those grounds to assail the validity of the assessment order. The ground of violation of principles of natural justice does not have some substance as only one day time was granted to the petitioner to file the reply to the show cause notice of the proposed additions to the income of the petitioner. This court is of the view that 24 hrs time granted to the petitioner to file response to the show cause notice dated 29.03.2022, was not a reasonable opportunity to the petitioner, and therefore, on the said ground, the writ petition is allowed. The impugned assessment order and further proceedings are set aside. The matter is remanded back to the National Faceless Assessment Centre, Delhi to provide an opportunity to the petitioner for filling reply to the WP(C) NO. 31553 OF 2022 4 show cause notice dated 29.03.2022 and thereafter, to proceed with the final order. 6.The National Faceless Centre, Delhi is directed to active the link for filing the reply to the show cause notice by the petitioner. After the link is activated, the petitioner shall file the reply within seven days. It is made clear that no further opportunity shall be granted to the petitioner and thereafter, the National Faceless Assessment Centre, Delhi shall proceed to finalise the assessment under Section 147 r/w under Section 144 of the IT Act. This writ petition is allowed as per the aforementioned directions. If the petitioner requests for personal hearing, he should be provided with the opportunity of being heard. Sd/- DINESH KUMAR SINGH JUDGE SJ WP(C) NO. 31553 OF 2022 5 APPENDIX OF WP(C) 31553/2022 PETITIONER EXHIBITS Exhibit-P1 A TRUE COPY OF THE NOTICE DATED 28.03.2021 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 148 OF THE ACT. Exhibit-P2 A TRUE COPY OF THE NOTICE DATED 24.01.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT UNDER SECTION 142(1) OF THE ACT (WITHOUT ENCLOSURES). Exhibit-P3 A TRUE COPY OF THE E-PROCEEDINGS RESPONSE DATED 'NIL' BEARING ACKNOWLEDGEMENT NO. 991673281290122. Exhibit-P4 A TRUE COPY OF THE NOTICE DATED 07.02.2022 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER . Exhibit-P5 A TRUE COPY OF THE E-PROCEEDINGS RESPONSE DATED 'NIL' BEARING ACKNOWLEDGEMENT NO. 247676291230222 Exhibit-P6 A TRUE COPY OF THE NOTICE DATED 11.03.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT UNDER SECTION 144 OF THE ACT . Exhibit-P7 A TRUE COPY OF THE E-PROCEEDINGS RESPONSE BEARING DATED 'NIL' ACKNOWLEDGEMENT NO. 366726751150322. Exhibit-P8 A TRUE COPY OF THE ACKNOWLEDGMENT DATED 16.03.2022, FOR HAVING FILED THE RETURNS FOR THE YEAR 2017-18. Exhibit-P9 A TRUE COPY OF THE E-PROCEEDINGS RESPONSE DATED 'NIL' BEARING ACKNOWLEDGEMENT NO. 387079651180322 (WITHOUT ATTACHMENT). Exhibit-P10 A TRUE COPY OF THE STATUS OF FILING OF RETURN AS APPEARING IN THE INCOME TAX PORTAL. Exhibit-P11 A TRUE COPY OF THE SHOW CAUSE NOTICE DATED 29.03.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT. Exhibit-P12 A TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT, ALONG WITH THE COMPUTATION SHEET AND DEMAND NOTICE. Exhibit-P13 A TRUE COPY OF THE NOTIFICATION NO. 05/2022 DATED 29.07.2022 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES Exhibit-P14 A TRUE COPY OF THE NOTICE DATED 31.03.2022 ISSUED TO THE PETITIONER BY THE 3RD WP(C) NO. 31553 OF 2022 6 RESPONDENT PROPOSING PENALTY UNDER SECTION 274 READ WITH SECTION 270A. Exhibit-P15 A TRUE COPY OF THE NOTICE DATED 31.03.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT PROPOSING PENALTY UNDER SECTION 274 READ WITH SECTION 271A. Exhibit-P16 A TRUE COPY OF THE NOTICE DATED 31.03.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT PROPOSING PENALTY UNDER SECTION 274 READ WITH SECTION 271B. Exhibit-P17 A TRUE COPY OF THE NOTICE DATED 31.03.2022 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT PROPOSING PENALTY UNDER SECTION 274 READ WITH SECTION 271F. Exhibit-P18 A TRUE COPY OF THE ORDER DATED 16.09.2022 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT UNDER SECTION 271F. Exhibit-P19 A TRUE COPY OF THE ORDER DATED 27.09.2022 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT UNDER SECTION 270A "