Inditrade Fincorp Limited V. Union of India and Assistant Commissioner of Income Tax Circle 1(2) and Commissioner of Income Tax (Appeals) - II and Commissioner of Income Tax (Appeals) National Faceless Appeal Centre

WP(C)/15375/2023

AI Insights

The case involves Inditrade Fincorp Limited, which filed a writ petition challenging the dismissal of its appeal by the NFAC. The appeal was initially dismissed as time-barred, with the NFAC considering the filing date from the assessment order date rather than the receipt of the order and demand notice. The petitioner argued that the appeal was filed within the statutory period from the date they received the documents, which was supported by the legal provision under Section 249(2)(b) of the Income Tax Act, 1961. The court agreed with the petitioner's stance, noting that the migration of the appeal to the NFAC occurred during its pendency, and thus, the old procedural rules should apply.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 697852 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 09-06-2023
• Assessment Year: misc
• Other Referred Cases: Robin Thapa v. Robert Dora [2019 KHC 6641]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: JAZIL; FERDINANTO JACOB
• Keywords: Condone delay; Demand notice; Faceless Appeals; Scrutiny assessment; Time-barred appeal
• Section: 250; 249(2)(b)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS FRIDAY, THE 9TH DAY OF JUNE 2023 / 19TH JYAISHTA, 1945 WP(C) NO. 15375 OF 2023 PETITIONER: 1 INDITRADE FINCORP LIMITED SECOND FLOOR, MES BUILDING, KALOOR KOCHI, ERNAKULAM -682 017 REPRESENTED BY ITS DIRECTOR MS. JHUMA GUHA BY ADVS. JAZIL DEV FERDINANTO JOSE JACOB RESPONDENTS: 1 UNION OF INDIA, REPRESENTED BY SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI, PIN - 110001 2 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(2), CENTRAL REVENUE BUILDING, I S PRESS ROAD, ERNAKULAM KOCHI, PIN - 682018 3 COMMISSIONER OF INCOME TAX (APPEALS) - II 1ST FLOOR, POORNIMA BUILDING, PANAMPILLY NAGAR, KOCHI, PIN - 682036 4 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC) INCOME TAX DEPARTMENT, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 SRI JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.15375 of 2023 2 C.S.DIAS, J. ------------------------- W .P .(C.) No.15375 of 2023 ------------------------- Dated this the 09th day of June, 2023 JUDGMENT The writ petition is filed challenging Ext.P7 order passed by the fourth respondent dismissing the petitioner’s appeal as time barred. 2. The relevant background facts are: the petitioner Company had filed its return for the Assessment Year 2011-12 on 30.09.2011. The returns were selected for scrutiny assessment and Ext.P1 assessment order was passed by the second respondent on 20.02.2014. On the very same day, Ext.P2 demand notice was also issued. Exts.P1 and P2 were served on the petitioner only on 11.03.2014. Aggrieved by Ext.P1, petitioner preferred Ext.P3 appeal before the third WPC No.15375 of 2023 3 respondent on 07.04.2014 i.e., within the statutory time period of thirty days from the date of service of notice, as postulated under Section 249(2)(b) of the Income Tax Act, 1961 (in short ‘Act’). Subsequently, the appeals filed before the the third respondent were migrated to the National Faceless Appeals Centre, the fourth respondent. The petitioner received Exts.P4 and P5 intimations and they filed Ext.P6 submissions addressing each grounds raised in the appeal. Surprisingly, the fourth respondent, by impugned Ext.P7 order, rejected Ext.P3 appeal on the ground that it was filed beyond the statutory period of thirty days. Ext.P7 order passed by the fourth respondent is erroneous and wrong. Hence, the writ petition. 3. Heard; Sri.Jazil Dev, the learned Counsel appearing for the petitioner and Sri.Jose Joseph, the learned Counsel appearing for the WPC No.15375 of 2023 4 respondents. 4. Ext.P1 assessment order was passed on 20.02.2014 and on the same day Ext.P2 demand notice was sent to the petitioner. 5. The petitioner asserts that they received Exts.P1 and P2 only on 11.03.2014. The fourth respondent’s contention is that the petitioner ought to have filed Ext.P3 within 30 days from 20.02.2014 and not from 11.03.2014. 6. The fact remains that, the petitioner had filed the appeal before the migration to the fourth respondent under faceless appeals scheme. 7. In the above background, this Court is of the view, as the appeal was filed prior to the introduction of the present scheme, the time period ought to be calculated only from the date of receipt of the demand notice and not from the date of passing the order. Therefore, the petitioner is entitled to the benefit of Section WPC No.15375 of 2023 5 249(2)(b) of the Act, which prescribes the date of service of notice as the crucial date. Even otherwise, going by the stand of the respondents, the alleged delay is only 16 days, which in normal course would have been condoned, if a delay petition was filed. Also, the petitioner was not granted an opportunity to file an application to explain the delay. In any case, the respondents do not have a case that the petitioner had received the notice on the same day. 8. It is trite; an application to condone the delay has to be considered in a liberal, pragmatic and in a justice oriented approach. 9. In Robin Thapa v. Robert Dora [2019 KHC 6641], the Hon'ble Supreme Court has held that ordinarily a litigation is based on adjudication on merits of the contentions and not to be terminated by default. The cause of justice does require that, as far as possible, adjudication be WPC No.15375 of 2023 6 done on merits. 10. Viewing the instant case in the above angle, based on the law referred to above and the pleadings and materials on record, I am of the definite view that the petitioner is entitled to the benefit of getting the appeal decided on its merits, holding that there is no delay, particularly because the migration occurred during the pendency of the appeal, therefore, the petitioner is entitled to the benefit of the erstwhile procedure. 11. In the above conspectus, I hold that Ext.P7 is liable to be quashed and Ext.P3 appeal be directed to be reconsidered on merits. Resultantly, in exercise of the powers of this Court under Article 226 of the Constitution of India, I allow the writ petition as follows: (i) Ext.P7 order is set aside. (ii) The fourth respondent is directed to WPC No.15375 of 2023 7 consider and dispose of Ext.P3 appeal, in accordance with law and as expeditiously as possible, after affording to the petitioner an opportunity of being heard, treating Ext.P3 appeal to be filed within time. (iii) Until such time orders are passed on Ext.P3 appeal, all further proceedings pursuant to Ext.P1 shall stand deferred. The writ petition is ordered accordingly. Sd/- C. S. DIAS JUDGE SKP/09-06 WPC No.15375 of 2023 8 APPENDIX OF WP(C) 15375/2023 PETITIONER’S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 20.02.2014 PASSED BY RESPONDENT NO. 2 EXHIBIT P2 TRUE COPY OF THE NOTICE OF DEMAND DATED 20.02.2014 ISSUED BY RESPONDENT NO. 2 EXHIBIT P3 TRUE COPY OF THE APPEAL DOCUMENTS FILED WITH RESPONDENT NO. 3, DATED 07.04.2014 EXHIBIT P4 TRUE COPY OF THE NOTICE DATED 23.12.2020 EXHIBIT P5 TRUE COPY OF THE NOTICE 06.12.2022 EXHIBIT P6 TRUE COPY OF THE SUBMISSIONS FILED BY THE PETITIONER ON 22.12.2022 EXHIBIT P7 TRUE COPY OF THE ORDER PASSED UNDER SECTION 250 OF THE ACT BY RESPONDENT NO. 4 DATED 22.03.2023 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE "