Coimbatore Traders V. The Income Tax Officer, Aayakar Bhavan, St Nagar, Thrissur and The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National E-Assessment Centre, Delhi

WA/1834/2023

AI Insights

The case involves M/s. Coimbatore Traders, a partnership firm engaged in selling vehicle body building products, which appealed against the judgment of a Single Judge dismissing their writ petition. The firm had failed to file an income tax return for the assessment year 2017-2018, leading to a notice under Section 148 of the Income Tax Act. After filing a delayed return, the firm was issued a notice under Section 143(2) due to a significant deposit in their bank account, which they claimed was from cash sales. The assessment was finalized, and the firm was taxed, which they contested, alleging non-consideration of their reply to the show cause notice. The Single Judge's dismissal of their writ petition led to this appeal, which was also dismissed for similar reasons, including the non-exhaustion of alternative remedies and the timing of the response to the show cause notice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 797641 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 20-10-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; R SREEJITH; K KRISHNA; PARVATHY MENON
• Keywords: Assessment Year 2017-2018; Ex parte assessment; Income Tax Return; Natural Justice; Show cause notice
• Section: 148; 143(2); 226

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH FRIDAY, THE 20TH DAY OF OCTOBER 2023 / 28TH ASWINA, 1945 WA NO. 1834 OF 2023 AGAINST THE JUDGMENT DATED 19.9.2023 IN WP(C) 15136/2022 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: M/S. COIMBATORE TRADERS,, 34/360, KOKKALAI, THRISSUR, REPRESENTED BY ITS MANAGING PARTNER, V.MUHAMMED RIYAS., PIN - 680021 BY ADVS.HARISANKAR V. MENON MEERA V.MENON, R.SREEJITH K.KRISHNA, PARVATHY MENON RESPONDENTS/RESPONDENTS: 1 THE INCOME TAX OFFICER, AAYAKAR BHAVAN, ST NAGAR, THRISSUR., PIN - 680001 2 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL E- ASSESSMENT CENTRE, DELHI PIN - 110001 THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 20.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A.No.1834/2023 -:2:- J U D G M E N T Dr. Kauser Edappagath, J. This writ appeal has been filed challenging the judgment of the learned Single Judge in W.P.(C).No.15136/2022 dated 19.9.2023. 2. The appellant is a registered partnership firm engaged in the business of selling vehicle body building products. It is an assessee under the provisions of the Income Tax Act. 3. The appellant failed to file income tax return with respect to the assessment year 2017-2018. The 1st respondent issued Ext.P1 notice under Section 148 of the Income Tax Act. In response to the said notice, the appellant filed Ext.P2 return for the assessment year 2017-2018 on 20.4.2021. In consequence, the appellant was issued with a notice under Section 143(2) of the Income Tax Act on 30.6.2021, mainly W.A.No.1834/2023 -:3:- citing that the appellant has a deposit of ₹2,31,23,940/- in its current bank account. To the said notice, the appellant gave Ext.P4 reply pointing out that the cash deposit cited is out of the cash sales effected by the appellant in the normal course of business carried on by it. Thereafter, the assessment proceedings were finalised as per the order that was impugned in the writ petition and the appellant was assessed to a tax of ₹1,45,000/-. The appellant challenged the assessment order before the learned Single Judge mainly on the ground that the reply filed by it to the show cause notice was not considered by the 1st respondent. The learned Single Judge after hearing both sides, dismissed the writ petition. 4. We have heard Sri. Harisankar V. Menon, the learned counsel for the appellant. 5. The learned counsel for the appellant submitted that the assessment order issued by the 1st respondent is illegal, inasmuch as it was passed violating the principles of natural justice. It is submitted that the reply submitted by the appellant W.A.No.1834/2023 -:4:- to the show cause notice was not considered at all by the 2nd respondent before passing the assessment order that was impugned in the writ petition. 6. Admittedly, the reply to the show cause notice was not filed in time. The assessment order was passed on 25.3.2022. The reply to the show cause notice (Ext.P10) is seen dispatched only on 24.3.2022. There is a clear finding in the assessment order that in spite of the sufficient opportunity, the appellant did not respond to the show cause notice. This is not a case where opportunity was not extended, but, the appellant did not avail the opportunity extended in time. Thus, it cannot be said that there is violation of the Principles of natural justice. Even though the assessment order is an ex-parte one, the admissible deduction has been allowed while finalizing the assessment proceedings. That apart, without exhausting the alternative remedy of statutory appeal under Section 246 of the Income Tax Act, the appellant has rushed to this Court. Needless to say, when there is adequate alternative remedy, the jurisdiction under W.A.No.1834/2023 -:5:- Section 226 of the Constitution of India cannot be invoked. For these reasons, we find no merit in the appeal and accordingly it is dismissed. Sd/- DR. A.K.JAYASANKARAN NAMBIAR JUDGE sd/- DR. KAUSER EDAPPAGATH JUDGE kp "