KAILAS AYYAPPAN V. INCOME TAX OFFICER

WP(C)/19947/2022

AI Insights

The case involves a writ petition filed by Kailas Ayyappan Kailas challenging the re-assessment proceedings initiated against him under Section 148 of the Income Tax Act. The petitioner contested the Ext.P9 order, arguing that the mandatory procedure of providing an opportunity of hearing as stipulated in sub-Section (b) of Section 148A was not followed. The court found that the petitioner's reply dated 12-05-2022 was not considered in the Ext.P9 order, leading to the decision to quash the order and notice, remanding the case for a fresh decision.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 760321 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 27-06-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: R NARAYANI HARIKRISHNAN; C S ANISH P
• Keywords: Notice under section 148; Opportunity of Hearing; Re-assessment proceedings; Ext.P9 order; Ext.P10 notice
• Section: 148; 148A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 27TH DAY OF JUNE 2022 / 6TH ASHADHA, 1944 WP(C) NO. 19947 OF 2022 PETITIONER: KAILAS AYYAPPAN KAILAS, KANDIYOOR, MAVELIKARA, ALAPPUZHA, PIN – 690130. BY ADVS. R.JAIKRISHNA NARAYANI HARIKRISHNAN C.S.ARUN SHANKAR ANISH P. RESPONDENTS: 1 INCOME TAX OFFICER WARD - 2, OFFICE OF THE INCOME TAX OFFICER, AAYAKAR BHAVAN, INCOME TAX OFFICE, BEACH ROAD P.O, ALAPPUZHA., PIN - 688001 2 PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX OFFICE OF PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, C.R. BUILDING, I.S. PRESS ROAD, ERNAKULAM NORTH P.O, KOCHI , PIN – 682018. OTHER PRESENT: ADV.JOSE JOSEPH,SC INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).No.19947/2022 2 J U D G M E N T Petitioner has approached this Court challenging Ext.P9 order through which it has been decided that re- assessment proceedings under Section 148 of the Income Tax Act should be initiated against the petitioner and the consequent notice under Section 148 (Ext.P10). 2. The learned counsel appearing of the petitioner points out that a reading of Ext.P9 order itself will show that the procedure contemplated by sub-Section (b) of Section 148A has not been complied with, while issuing Ext.P9 order. It is submitted that sub-Section (b) of Section 148 A specifically requires that an opportunity of hearing should be granted to the assessee before deciding to initiate proceedings under Section 148 of the Income Tax Act. It is also submitted that only one among the replies submitted by the petitioner have been considered and Ext.P7 reply dated 12-05-2022, has not been considered while passing Ext.P9 order. W.P(C).No.19947/2022 3 3. The learned Standing Counsel appearing for the department states that the petitioner is not at all prejudiced by Ext.P9 order. It is submitted that Ext.P9 is in the nature of preliminary order were the authority has taken a decision that proceedings under Section 148 of the Income Tax Act should be initiated against the petitioner. It is submitted that the petitioner will get a full opportunity before the re- assessment proceedings are completed to substantiate that there has been no escapement of income and therefore even if Ext.P9 order suffers from any defect as pointed out by the learned counsel for the petitioner the same need not be set aside in exercise of jurisdiction of this Court under article 226 of the Constitution of India. 4. Having heard the learned counsel for the petitioner and the learned Standing Counsel for the department and taking note of the fact that Section 148 A(b) of the Income Act specifically requires that an opportunity of hearing be given to the assessee before deciding to initiate proceedings under Section 148 of that Act, I am of the opinion that Ext.P9 order is liable to be set aside. It is also W.P(C).No.19947/2022 4 to be noted that Ext.P7 reply of the petitioner, which was submitted before Ext.P9 order was issued and also not been considered by the authority. In the result this writ petition is allowed and Ext.P9 order is quashed. Consequently Ext.P10 notice will also stand quashed. The matter is remanded to the 1st respondent to pass fresh orders after considering the reply submitted by the petitioner and after affording an opportunity of hearing to the petitioner. I make it clear that I have not expressed any opinion on the merits of the matter and is open to the 1st respondent to pass such orders as it deem necessary after following the procedure contemplated by sub-Section (b) of Section 148 A. Sd/- GOPINATH P. JUDGE ats W.P(C).No.19947/2022 5 APPENDIX OF WP(C) 19947/2022 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT UNDER SECTION 148A(B) OF THE INCOME TAX ACT DATED 16.3.2022 EXHIBIT P2 TRUE COPY OF THE ADJOURNMENT REQUEST FILED BY THE PETITIONER DATED 30.3.2022. EXHIBIT P3 TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED ON ONLINE PORTAL DATED NIL. EXHIBIT P4 TRUE COPY OF REPLY TOGETHER WITH SIX ANNEXURES SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 9.4.2022. EXHIBIT P5 TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED ON ONLINE PORTAL DATED NIL. EXHIBIT P6 TRUE COPY OF THE ORDER OF GRANTING TIME ISSUED BY THE 1ST RESPONDENT DATED 3.5.2022. EXHIBIT P7 TRUE COPY OF REPLY TOGETHER WITH THREE ANNEXURES SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 12.5.2022. EXHIBIT P8 TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED ON ONLINE PORTAL DATED NIL. EXHIBIT P9 TRUE COPY OF THE ORDER ISSUED BY THE 1ST RESPONDENT DATED 30.5.2022. EXHIBIT P10 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 30.5.2022. EXHIBIT P11 TRUE OF THE INTERIM ORDER ISSUED BY THIS HON'BLE COURT IN W.P(C) 15561/2022 DATED 10.5.2022. "