M/s. Dakshin Realities Private Limited V. The Union of India

WP/25365/2022

AI Insights

The case involves M/s. Dakshin Realities Private Limited, which filed a writ petition against the Union of India and the Income Tax Department, challenging an assessment order and a subsequent penalty. The petitioner argued that the orders were passed in violation of natural justice, particularly during the peak of the COVID-19 pandemic, without a personal hearing. The respondents contended that the petitioner was given a show cause notice and had responded, thus fulfilling the requirements of natural justice. The court, however, found that the absence of a personal hearing, especially during such a critical period, constituted a violation of natural justice, leading to the quashing of the orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 724176 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-01-2024
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA; GADI PRAVEEN KUMAR
• Assessee Lawyers: B VIJAY KUMAR
• Keywords: Assessment Order; Covid-19; Natural Justice; Penalty order; Personal hearing; Show cause notice; Writ petition
• Section: 151 CPC

Judgement Text

"[ 3379 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA ATTIYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY NINTH DAY OF JANUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 25365 OF 2022 M/s. Dakshin Realities Private Limited, Plot No.83 and 84,4th Floor, Punnaiah Plaza noiO, noiO filo.2, eanlara Hitts,Hydeiabad -500 034 Represented by its authorized signatory. ...PETITIONER AND 1. The Union of lndia, Ministry of Finance, New Delhi Represented by its Secretary. 2. Additional/Joinu Deputy/Assistant commissioner of lncome Tax lncome Tax Officer, National Faceless Assessment Centre ...RESPONDENTS Petition under Article 226 ot the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue a writ, direction or order in the nature of certiorari or any other appropriate writ application or order under Article 226 of the Constitution of lndia calling for the records on the file of the Respondent and quash the impugned order in DlN. ITBA/ASTIS 1143(3)12020-211 1031345751(1) dated 09.03.2021 and the consequential penalty order in DIN ITBA/PNL/ F1270N2021-221 1039919632(1) daled 19.o2.2022 as illegal and consequently direct the Respondent to pass a fresh assessment order after issuing a show cause notice and giving sufficient opportunity to the petitioner to be heard in accordance with law. Between: lA NO: 1 OF 2 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may he pleased to dispense with the filing of the original impugned order in DlN. ITBAiAST/S/143 (3)/2020- 2111031345751(1) dt. 09.O3.2O2'l and order in DIN tr B At p NLI F I 27 0 Al 202 1 - 22 t 1 0399 1 I 632(1 ) dt. 1 S .0 2.2022. ]ANO:2OF 2022 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 stay of all further proceedings pursuant to the impugned order DlN. ITBA/AST/S/143(3)12020- 2111031345751(1) dated 09.O3.2021 and the consequential penalty order in DIN . lTBAiPNLlFl270Al2021-2211039919632(1) uls 270A dated 19.O2.2022 passed by the Respondent. Counsel for the Petitioner : SRI B.VIJAY KUMAR counser for the Respondent No'1 ' 39]s6flttffJE=s,5Hff& ,*o,o Counsel for the Respondent No.2 : Ms.J.SUNITHA, JUN]OR SC FOR lT The Court made the following: ORDER T 7 THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No.25365 OF 2022 ORDER: (per Hon'ble Si Justice P.SAM KOSHY) Heard Mr. B.Vijay Kumar, learned counsel for the petitioner, Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India, appea-ring for respondent No.1 and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax, appearing for respondent No.2. 2. The present is a Writ Petition which has been filed assailing the order of assessment dated 09 .O3.2O21 and also consequential penalty order dated 19 -O2 -2022 passed by respondent No.2. 3. The impugned order has been challenged primarily on the ground that the same is in violation of the principles of natural justice. According to the learned counsel for the petitioner, the impugned order itself would clearly indicate that the same has been passed during the peak period of COVID-l9. The learned counsel further contended that a show canrse notice was issued to the petitioner and the petitioner tendered their reply to the same, but thereafter' the respondents have neither given any intimation to the I 2 petitioner with regard to further progress nor afforded any opportunity of personal hearing before impugned assessment order was passed. The learned counsel further contended that in the absence of affording opportunity of personal hearing, the petitioner could not effectively defend their case before the respondents. Thus, he prayed for quashment of the impugned order as well as consequential penalty order. 4. Per contra, learned counsel for the Department, opposing the petition, contended that there is admission by the petitioner, as would be reflected from the impugned order itself, that they were duly served with the show cause notice ald they have submitted_ reply to the same. The learned counsel further contended that this by itself would mean that the Department did comply with the basic principles of natural justice. The learned counsel further contended that the impugned order is art appellable one and hence, the present Writ Petition, on the ground of availability of alternative remedy to the petitioner, should not be entertaine{_'. 3 n 5. Having heard the contentions put forth on either side, and on perusal of the record, the admitted factual rnatrix of the case are that a show cause notice seems to have been issued to the petitioner on 18.01.2021, and in response to the same, the petitioner had tendered their reply on 27.01 .2021. Thereafter, there seems to be no further development and the hnal assessment order was passed on Og.O3.2021 followed by the order of penalty dated lg .O2 .2022. Upon service of order of penalty only, the petitioner came to know about the impugned order having been passed. 6. With regard to affording personal hearing to the assessee, the circular governing the Iield clearly mandates that after the response to the show cause notice is received from the assessee, the Department may proceed further, but before passing of the final order of assessment, the assessee should be called upon for a personal hearing' 7. A plain reading of the impugned order would clearly reflect that it is silent with regard to affording of personal hearing to the petitioner. Therefore, it has to be presumed 4 & that the opportunity of personal hearing was not afforded to the petitioner. B. It is also an admitted factual matrix that in Jaluary, 2O2l and March, 2O2l in which the show cause notice was issued and the final assessment order was passed, the second wave of COVID-19 was in full swing. Therefore, if the notice would have been issued, it may not had been fruitful for the reason that due to peak stage of COVID-l9 during that period, the petitioner would not be in a position to appear before the authorities concerned. 9. In the aforesaid admitted factual matrix of the case, we are of the firm view that the impugned order to the aforesaid extent is hit by the principles of natural justice arrd the same, therefore, deserves to be and is accordingly set aside/quashed. Since the impugned order is quashed only on the ground of it being violative of principles of natural justice for not affording the opportunity of personal hearing, the petitioner is directed to enter appearance before the authority concerned on 13.02.2024 for tlne purpose of personal hearing and make all their submissions in support of reply that theyJrave submitted Y 5 to the show cause notice on 27 .O1.2O21. Upon the sarne, respondent No.2 sha-ll pass fresh order on merits taking into consideration the contentions and submissions that the petitioner will make during their personal hearing. Respondent No.2 shall also consider the contentions raised by the petitioner in their reply to the show cause notice on 27.Or.202t. 10. The Writ Petition accordingly stands allowed and the order of assessment dated 09.O3.2O21 and also consequential penalty order dated 79.02.2022 passed by respondent No.2 stand set aside. No order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// SO/- V. HARI PRASAD ASSrsrANr$iGr:1rRAR SECTION OFFICER '\"'l+ffi i331f; i*i,Yditls:xl,t?^gi:gt\"{J;ffi 1??;}.1iffJfl,,\"'rncomerax ;.gfritl:lflffj+*,#*H,i+tmfl *[ifi+*:ri*r,::xrrrl s. ijX\" dcil, i'tts i'suutrun' Junior standins coL 6. Two CD CoPies' BSK oJP(p T HIGH COURT DATED:2910112024 ORDER WP.No.25365 of 2022 ALLOWING THE WRIT PETITION WITHOUT COSTS tqlnlvy t 1v E S'TA rF 1 4 Fits 2[24 O a'. -)i w P "