IDEX INDIA PRIVATE LIMITED V. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

SCA/16690/2021

AI Insights

IDEX India Private Limited challenged the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, claiming non-compliance with procedural requirements. The petitioner argued that the respondent failed to issue a show cause notice cum draft assessment order, which is a prerequisite under Section 144B for any proposed variation in the assessment. The court noted the absence of such procedural compliance and allowed the petition, setting aside the assessment order and demand notice, while permitting the revenue to re-initiate the assessment process following the correct procedural steps.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 749464 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 14-12-2021
• Assessment Year: misc
• Other Referred Cases: Gandhi Realty (India) Private Limited Versus Assistant/Joint/Deputy/Assistant Commissioner Of Income Tax/Income Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VARUN PATEL
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment Order; Draft Assessment Order; Non compliance; Show cause notice
• Section: 143(3); 144B

Judgement Text

"C/SCA/16690/2021 ORDER DATED: 14/12/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 16690 of 2021 ========================================================== IDEX INDIA PRIVATE LIMITED Versus ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1 NOTICE SERVED(4) for the Respondent(s) No. 2 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 14/12/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1 . T h i s C o u r t a t t h e t i m e o f i s s u a n c e o f n o t i c e o n 1 5 . 1 1 . 2 0 2 1 p a s s e d t h e f o l l o w i n g o r d e r : “The petitioner is before this Court challenging under Article 226 of the Constitution of India. The Assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act on the ground of non-compliance of the provision of law. It is the grievance on the part of the petitioner that the respondent has failed to follow the procedure under Section 144 B and straightaway pass the order of assessment without issuing the show cause notice cum draft assessment order for giving any opportunity of Page 1 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 hearing to the petitioner. The prayer sought for are as follows: 7 (a) quash and set aside the impugned order at Annexure-’A’ to this petition; (b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the order at Annexure-A to this petition and stay the demand notice at Annexure ‘G’ to this petition and the Penalty notice at Annexure-H to this petition. (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition. 3. We have heard the learned Advocate Mr. Bandish Soparkar who has not disputed that for the proposed variation a show cause notice has not been issued. We could notice from 24.8.2021 show cause notice issued to the petitioner the variation has been proposed by the law officer concerned. He has taken us to the order which is impugned dated 22.9.2019 urging fervently that neither there is draft assessment order nor there is a compliance of the provision of Section 144 B particularly empasising on 144 B(1) (xxv) to (xxxii). Page 2 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 4. Issue Notice as to interim relief returnable on 22.11.2021. 5. Direct Service is permitted today by Speed Post.” 2 . T h e r e a f t e r , s i n c e t h e J u r i s d i c t i o n a l A s s e s s i n g O f f i c e r w a s t o b e j o i n e d a s a p a r t y r e s p o n d e n t , t h e o r d e r w a s p a s s e d o n 2 5 . 1 1 . 2 0 2 1 w h i c h d e s e r v e s t o b e r e p r o d u c e d : “1. Draft amendment moved today is permitted by joining jurisdictional Assessing Officer as a party from Vadodara and National Faceless Assessment Centre, New Delhi will be a separate party. Necessary amendments to be carried out today itself. 2. Let the service through the speed post be made to the National Faceless Assessment Centre, New Delhi by next week. 3. We have heard the learned advocate, Mr.B.S.Soparkar appearing for the petitioner and learned senior standing counsel, Mr.Varun Patel appearing for respondent- department. 4. Request has been made by the learned senior standing counsel, Mr.Varun Patel to grant the time as there is no Page 3 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 detail obtained from the National Faceless Assessment Centre and it is not feasible for him to get it in a near future. It is also further submitted that the cause title since was not proper, the concerned officer also was unable to provide the necessary instructions. 5. We have also heard learned advocates on both the sides on the interim relief as the time is expiring on 29.11.2021 for preferring the appeal. 6. Noticing the nature of litigation and the averment set out questioning the noncompliance of provision of law, we are inclined to accede to the request of stay the implementation and operation of the assessment order dated 27.09.2021 till 14.12.2021. 7. Affidavit-in-reply shall be filed in the instant case on or before 14.12.2021.” 3 . A f f i d a v i t - i n - r e p l y h a s b e e n f i l e d f o r a n d o n b e h a l f o f t h e r e s p o n d e n t b y t h e l e a r n e d s e n i o r s t a n d i n g c o u n s e l , M r . V a r u n P a t e l , w h e r e h e h a s g i v e n t h e c h r o n o l o g y o f e v e n t s t o s a y t h a t t h e d r a f t a s s e s s m e n t o r d e r a f t e r b e i n g a p p r o v e d b y t h e R a n g e Page 4 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 H e a d o f t h e F a c e l e s s A s s e s s m e n t U n i t w a s s e n t t o A s s e s s i n g O f f i c e r o f F a c e l e s s A s s e s s m e n t U n i t o n 2 2 . 0 9 . 2 0 2 1 . H e s u b m i t t e d t h e d r a f t f o r r e v i e w t o N a t i o n a l F a c e l e s s A s s e s s m e n t C e n t r e o n 2 3 . 0 9 . 2 0 2 1 . T h e A s s e s s i n g O f f i c e r s e n t t h e d r a f t a s s e s s m e n t o r d e r t o t h e A s s e s s e e o n 2 3 . 0 9 . 2 0 2 1 b e a r i n g t h e s a m e d a t e w i t h o u t a n y n o t i n g s / r e m a r k s . T h e r e a f t e r , N a t i o n a l F a c e l e s s A s s e s s m e n t C e n t r e s e n t t h e s a i d d r a f t o r d e r t o r e v i e w u n i t o n 2 3 . 0 9 . 2 0 2 1 . A f t e r r e v i e w i n g t h e o r d e r , t h e A s s e s s i n g O f f i c e r o f R e v i e w U n i t f o r w a r d e d t h e r e p o r t t o R a n g e H e a d f o r a p p r o v a l o n 2 4 . 0 9 . 2 0 2 1 . T h e R a n g e H e a d o f R e v i e w U n i t h a d a p p r o v e d t h e r e v i e w r e p o r t a n d f o r w a r d e d i t t o t h e A s s e s s i n g O f f i c e r o f R e v i e w U n i t o n 2 4 . 0 9 . 2 0 2 1 a n d o n t h e s a m e d a y A s s e s s i n g O f f i c e r , R e v i e w U n i t f o r w a r d e d i t t o N a t i o n a l F a c e l e s s Page 5 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 A s s e s s m e n t C e n t r e . A s s e s s i n g O f f i c e r o f A s s e s s m e n t U n i t r e c e i v e d r e v i e w r e p o r t f r o m R e v i e w U n i t o n 2 4 . 0 9 . 2 0 2 1 a n d A s s e s s i n g O f f i c e r o f A s s e s s m e n t U n i t f o r w a r d e d t h e A s s e s s m e n t O r d e r f o r a p p r o v a l t o R a n g e H e a d o n 2 4 . 0 9 . 2 0 2 1 . T h e r e a f t e r , o n 2 7 . 0 9 . 2 0 2 1 t h e f i n a l o r d e r , d e m a n d n o t i c e a n d p e n a l t y n o t i c e h a v e b e e n d i s p a t c h e d . 4 . I t i s a d m i t t e d t h a t o n l y d r a f t a s s e s s m e n t o r d e r w a s s e r v e d u p o n t h e A s s e s s e e o n 2 3 . 0 9 . 2 0 2 1 w i t h o u t f i x i n g a n y d a t e f o r f u r n i s h i n g t h e r e p l y a n d t h e f i n a l s h o w c a u s e n o t i c e a v a i l i n g t h e o p p o r t u n i t y o f h e a r i n g t o t h e p e t i t i o n e r h a s n o t b e e n s e r v e d u p o n t h e A s s e s s e e . T h e A s s e s s m e n t O r d e r w a s f i n a l i z e d a n d s u b m i t t e d f o r a p p r o v a l o f R a n g e H e a d o n 2 4 . 0 9 . 2 0 2 1 . T h u s , i t i s c l e a r t h a t a s p e r t h e p r o v i s i o n o f Page 6 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 I n c o m e T a x A c t , 1 9 6 1 u n d e r S e c t i o n 1 4 4 B ( 1 ) ( x v i ) a n d 1 1 4 B ( 1 ) ( x x ) ( i i ) , t h e f i n a l n o t i c e a l o n g w i t h t h e d r a f t a s s e s s m e n t o r d e r h a s n o t b e e n s e r v e d u p o n t h e p e t i t i o n e r . 5 . T h i s C o u r t h a s h e a r d t h e l e a r n e d s e n i o r a d v o c a t e , M r . S o p a r k a r a l o n g w i t h l e a r n e d a d v o c a t e , M r . B a n d i s h S o p a r k a r f o r t h e p e t i t i o n e r a n d l e a r n e d s e n i o r s t a n d i n g c o u n s e l , M r . V a r u n P a t e l f o r t h e r e s p o n d e n t s - d e p a r t m e n t . 6 . M a t t e r h a s b e e n t a k e n u p f o r f i n a l h e a r i n g a t a i n i t i a l s t a g e n o t i c i n g t h e c l e a r a d m i s s i o n i n t h e a f f i d a v i t - i n - r e p l y o n b e h a l f o f t h e r e s p o n d e n t s . T h i s C o u r t i n c a s e o f G a n d h i R e a l t y ( I n d i a ) P r i v a t e L i m i t e d V e r s u s A s s i s t a n t / J o i n t / D e p u t y / A s s i t a n t C o m m i s s i o n e r O f I n c o m e T a x / Page 7 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 I n c o m e T a x O f f i c e r r e n d e r e d i n S p e c i a l C i v i l A p p l i c a t i o n N o . 7 6 6 2 o f 2 0 2 1 h a s a l r e a d y d e a l t w i t h t h i s i s s u e d i s c u s s i n g S e c t i o n 1 4 4 B o f t h e I n c o m e T a x A c t , 1 9 6 1 . I f t h e r e i s a n y v a r i a t i o n p r e j u d i c i a l t o t h e a s s e s s e e , f i n a l n o t i c e w i t h t h e d r a f t a s s e s s m e n t o r d e r n e e d s t o b e s e r v e d n e c e s s a r i l y a s p e r t h e m a n d a t e o f t h e s t a t u t e a n d o t h e r w i s e t h e o r d e r p a s s e d i s n o n - e s t a s p r o v i d e d u n d e r t h e s a i d p r o v i s i o n s i t s e l f . T h e C o u r t i n t h a t m a t t e r h a s h e l d t h u s : “19.However, we direct that the respondent/revenue will be at liberty to proceed with the assessment process under the provisions of Section 144B of the Act, as permissible under the law obviously after issuance of the prior notice- cum-draft assessment order and on availing an opportunity to the petitioner. The petitioner shall file response and the objection to the same. Opportunity of hearing if is sought for, the same shall be accorded including opportunity of personal hearing. Let the procedure under section 144B of the Act be followed by the revenue scrupulously.” Page 8 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 7 . I n v i e w o f t h e a b o v e , p r e s e n t p e t i t i o n i s a l l o w e d . T h e i m p u g n e d o r d e r o f a s s e s s m e n t a n d c o n s e q u e n t n o t i c e o f d e m a n d i s q u a s h e d a n d s e t a s i d e . T h e r e s p o n d e n t / r e v e n u e w i l l b e a t l i b e r t y t o p r o c e e d w i t h t h e p r o c e s s o f a s s e s s m e n t u n d e r t h e p r o v i s i o n s o f S e c t i o n 1 4 4 B r e a d w i t h s e c t i o n 1 4 4 C o f t h e I n c o m e T a x A c t , 1 9 6 1 a s p e r m i s s i b l e u n d e r t h e l a w o b v i o u s l y a f t e r i s s u a n c e o f t h e f i n a l n o t i c e - c u m - d r a f t a s s e s s m e n t o r d e r a n d o n a v a i l i n g a n o p p o r t u n i t y t o t h e p e t i t i o n e r . T h e p e t i t i o n e r s h a l l b e g i v e n t h e o p p o r t u n i t y t o p r e f e r r e s p o n s e a n d t h e o b j e c t i o n t o t h e s a m e , i f i t s o d e s i r e s . O p p o r t u n i t y o f h e a r i n g i f i s s o u g h t f o r , t h e s a m e s h a l l b e a c c o r d e d i n c l u d i n g o p p o r t u n i t y o f p e r s o n a l h e a r i n g . L e t t h e p r o c e d u r e u n d e r s e c t i o n 1 4 4 B r e a d w i t h S e c t i o n 1 4 4 C o f t h e I n c o m e Page 9 of 10 C/SCA/16690/2021 ORDER DATED: 14/12/2021 T a x A c t , 1 9 6 1 b e f o l l o w e d b y t h e r e v e n u e s c r u p u l o u s l y t h e f i n a l o r d e r s h a l l b e f i l e d a s f a r a s p o s s i b l e w i t h i n a p e r i o d o f t w e l v e w e e k s f r o m t h e d a t e o f r e c e i p t o f a c o p y o f t h i s o r d e r . 8 . O v e r a n d a b o v e t h e r e g u l a r m o d e o f s e r v i c e , d i r e c t s e r v i c e i s p e r m i t t e d t h r o u g h s p e e d p o s t a s w e l l a s e - m o d e . (SONIA GOKANI, J) (NISHA M. THAKORE,J) M.M.MIRZA Page 10 of 10 "