M/s Centre for Economic and Social Studies (CESS) V. The Union of India

WP/12195/2023

AI Insights

The case involves M/s Centre for Economic and Social Studies (CESS), represented by its Director, E. Revathi, challenging the orders passed by the National Faceless Assessment Centre (NFAC) and other income tax authorities. The petitioner contested the assessment orders and the subsequent appellate orders, claiming that they were passed without providing an adequate opportunity of hearing, which they argued was illegal, arbitrary, and unconstitutional. The High Court noted the difficulties faced by the petitioner in accessing the notices due to issues with their former auditor's email and the impact of the COVID-19 pandemic. The court acknowledged the petitioner's status as an autonomous research center and the challenges posed by the pandemic, leading to its decision to remand the matter for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 688408 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 30-08-2023
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Section 250 of the Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: MUKHERJEE GADI PRAVEEN KUMAR; J V PRASAD; K MAMATA
• Assessee Lawyers: SRIKANTH KAVETI
• Keywords: Assessment Order; Due Procedure; Income Tax; Opportunity of Hearing; Unconstitutional; Writ of Mandamus
• Section: 250; 226

Judgement Text

"[ 3386 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE THIRTIETH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO: 12195 OF 2023 Between: M/s Centre for Economic and Social Studies (CESS), Rep. by its Director, E.Revathi, D/o Janardhan Rao, Age 61 years, Office at -Nizamiah Observatory Campus, Begumpet, Hyderabad- 5000 16, Telangana. ...PETITIONER/S AND 1. The Union of lndia, res By its Secretary Ministry of Finance, lncome Tax Department, North Block, New Delhi 1'1000'l 2. National Faceless Assessment Centre, Rep. by its Commissioner, Mayur Bhawan, Connaught Lane, Barakhamba, New Delhi, Delhi 1 1 0001 3. The Addl / Joint / Deputy / Asst. Commissioner, lncome Tax Department, Notational e-Assessment Centre, Delhi. 4. National Faceless Appeal Centre ( NFAC ), Rep by its Commissioner,lncome Tax Department, Room No. 245-4, No(h Block, New Delhi - 110001 (Respondent No.4,is imleaded by the Counsel as per Court Order dated 28.07.2o23,in WP No.12195 ot2023 ...RESPONDENTS Petition under Article 226 ot lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an Order, Direction or Writ more particularly one in the nature of Writ of lvlandamus declaring to declare the orders passed in Appeal No. NFAC/20'1 7-18l10099346 and NFAC/2o17- 18110103438 dated 24-02-2023 by the 2nd respondent confirming the assessment order dated 'l 1.O5-2O21 and the order 16-03-2022 passed by the 3'd respondent without giving opportunity of hearing as illegal arbitrary, unfair, mockery, unco n stitutional without following due procedure and contrary to the provisions of Sec.250 of the lncome Tax Act and contrary to the settled principles of law and consequently set-aside the same, by remanding the appeal to the 2nd respondent duly directing him to give affordable opportunity to make submissrons and hearing to the petitioner and pass reasoned order in accordance with law lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the impugned orders in Appeal No. NFAC/ 2017-'l 8/ 10099346 and NFAC/2017- 1B/10103438 dated 24-02-2023 by the 2nd respondent confirming the assessment order dated 11-05-2021 and the order 16-03-2022 passed by the 3'd respondent, while directing the respondents not to take any further steps in pursuance of the impugned orders, pending disposal of the Writ Petition Counsel for the Petitioner : SRI SRIKANTH KAVETI Counsel for the Respondent No.1 : SRI MUKHERJEE, REP. SRI GADI PRAVEEN KUMAR (Dy. SoLlclTOR GENERAL OF INDIA) Counsel for the Respondent Nos.2 & 4 : SRI J.V.PRASAD SC FOR INCOME TAX Counsel for the Respondent No.3 : MS. K.MAMATA, SC FOR INCOME TAX The Court made the following: ORDER THE HON'BLE SRI JUSTICE P.SAM KOSI{Y AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY VI.P. No. 12L95 of 2023 ORDER:/per lfon'ble Si Jttstice P.SAM KOS.HY) Heard Mr. Srikanth Kaveti, learned counsel for the petitioner; Mr. Mukerjee, learned Senior Counsel representing learned Deputy Solicitor General of Ihdia appearing for respondent No. 1; Mr. J.V. Prasad, learned Senior Standing Counsel for Income Tax appearing for respondent Nos.2 & 4 and Ms. K. Mamata, learned Senior Standing Counsel for Income Tax appearing for respondent No.3. 2. The instant writ petition has been filed assailing the order dated 24.O2.2O23 in Appeal Nos.NFAC/2017-lA/70099346 & NFAC/2O17- 18/1O103438 passed by respondent No.2 confirming the assessment order dated ll.O5.2o2l and the order dated 76.03.2022 under the provisions under Section 250 of the Income Tax Act, .1961 (briefly 'the Act' hereinafter) passed by respondent No.3 without giving opportunity of hearing. 3. Vide the impugned order, dated 24.O2.2O23, the Appellate Authority had rejected the appeals preferred by the petitioner against the assessment orders, dated 77.O5.2O2I and 16.O3.2022. 4. learned counsel for the petitioner submits that the petitioner had preferred three appeals before the Appellate Authority, in which, two of the appeals have been dismissed confirming the assessment orders, dated 1I.O5.2O2). and 76.03.2022. However, the /third appeal -.7 2 I I No.NFAC/2O17-18/10099217, which was the appeal Iiled under Section 25O of the Act assailing the order dated 2O.O 1.2Lt22, under Section 271 (l)lb) of the Act passed by thc Assessing Officer, stood allowed vide order dated 2O.O1.2O23, whereby, the vcry sarne grounds were raised by the petitioner that they were prevented to furnish the details beforc thc authority concerned because of the compelling circumstances that prevailed, firstJy, on account of their former auditor, whose mail id w:rs given for correspondence was expired and thereafter, the said mail id was no longer accessible and secondly, the intervening period of the Covid pandemic when the notices that werc issut:d were by respondent No.2 were accepted. However, in the instant case, on the same set of facts, the appeals under challenge in the present w;:it petition stood rejected. White rejecting the appeal No.NFAC/2O 17 -t8/10099346, the Appellate Authority in paragraph Nos.6.6 and 6.7 held as follows: \" 6.6 Thc appcllant drd not comply with the abovc notices. It neither filed its rcvrsed |eturn for adjudication nor it filed supporting evirlen<.es against addition made by learned AO to prove correctness of thc reccipts and time deposits. On 21sr February, 2023 Lhe appcllant lilect a reply acknowlcdging that notices were served to another email ID aed despite getting hold of the notices, the appcllant did not file any submission. In thc screcnshots submitted by the appcllant, it is observcd LhaL the appellant took screenshot of lts own income tax e file log in account- As per new income tax portal, the appcllant can acccss noLrces an(l other correspondence on its own irrespeclive of aay intimation in cmail. The appellant tricd to make a reason that thc emil id mcntloncd in its income tax online portal bclonged to prcvlols auditor who dred on 03/08/2015 i.e. almost 8 ycars ago. Thr: said rcason is trot acccplable for simple reason that appell:rnt was not concerned irt all to change iLs own rccords even after passing 8 years which can [)c donc at click of button. 6.7. The lau, aids those who are vigilant, not thosc rvho slecp upon th(jir rights. This principle is embodied rn the well-known Lalin dicturn, \"VIGILANTII]US ET NON DORMIENTIBUS JURA SUB VENIUNT\". TITe conducL of thc Appellant, as inferred from thc aforcsaid table, cvidenc,ts that t}Ie Appellant fails on rhis pnnciple of equity Even the Hon,blc Courts, in various pronouncements, have frowned upon the Appeltants who filc appeals but thcreafter do not take any further intcrest rn prosecuting thosc appeals\". -----=-----7 3 ) 5. If we look into the factual details of the proceedings drawn by the Asscssing Authority, it would be clear indication that the entire proceedings were drawn at the peak of the Covid pandemic period. Though the petitioner had entered appearance and had been representing them, nonetheless, it is a known fact that during the said period, every person faced difhculty and was not fully out to face such a situation, more particularly, when it came up for facing the proceedings drawn by quasi judicial agency or judicial agency and many times it had been even lost priority under the precarious circumstances that were prevailing at that point of time. Taking into consideration the fact that the petitioner is being an autonomous Research Center fully funded from the State Governments and Central Government and other institutions conducting research and the said institution being recognized by the Indian Council of Social Science Research (ICSSR, Ministry of Human Resource Development, Government of India) as a nationai institute and also taking note of the objectives under which the said petitioner's establishment constituted, we are conscious of the fact that there is a remedy being available to the petitioner, nonetheless, taking into consideration the entire facts and circumstances of the case, more particularly, the status of the petilioner and also the notice period ald the explanation provided by the petitioner and further taking note of the fact that one of the appeals preferred by the petitioner 'against the order passed under Sectioh 271(1)(b) of the Act being allowed by the authority, we are of thc considered opinion that it would be ht case where if the ( ( ) 'ie-d 4 matter is remanded back to respondent No.4 for reconsideration of the appea[. 6. Accordingly, the appeal is disposed of and the matter is remanded back to respondcnt No.4 to pass orders afresh and decide tl're appeals under challenge in the present writ petition on its own merits, as carly as possible, after providing an opportunity of hearing to the petitioner, if at all the petitioner applies for the same. The petitioner herein is also directed to ensure that the order passed in the present writ 1:eiition so far as the matter getting remanding back to respondent No.4 is concerned, be communicated to respondent No.4 within a period of two (2) weeks, from the date of receipt of copy of this order. No order as to costs. Consequently, miscellaneous petitions pending, if any, sJrall stand crosed Assrf#ilI:3'E+RtR I/TRUE COPY// sEci#N OFFICER tt , l:?i8\",:\"\",,lftJJ5l or lndi^a^Ir/linistry or Finance' lncome Tax Department' 1ffiffiffiffit$.ffi Kl. GJPr q{ HIGH COURT DATED:30/08/2023 ORDER WP.No.12195 ot2023 DISPOSING OF THE WP WITHOUT COSTS. o 1H i Sr4 r4: t ( o I I I:EP 2&l ar t l)p - -.ri'') 6 "