Lulu International Shopping Malls Private Limited V. The Deputy Commissioner of Income Tax, Corporate Circle 1(1) and The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National Faceless Assessment Centre and Assessment Unit, Income Tax Department, Delhi

WP(C)/19390/2023

AI Insights

The case involves M/s. Lulu International Shopping Malls Private Limited, which sought to quash an assessment order that added a significant amount to its total income for the assessment year 2016-2017. The petitioner argued that the Income Tax Department's failure to respond to its request for an extension to file a reply to a show cause notice violated its rights under Article 14 of the Constitution. The court found that the principles of natural justice were not adhered to, as the petitioner was not given a fair opportunity to respond before the assessment order was issued.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 797994 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 20-09-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOHN JOSEPH
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; R SREEJITH; K MENON
• Keywords: Extension of time; Faceless assessment; Income Tax; Natural Justice; Show cause notice
• Section: 148; 198

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 20TH DAY OF SEPTEMBER 2023 / 29TH BHADRA, 1945 WP(C) NO. 19390 OF 2023 PETITIONER: M/S. LULU INTERNATIONAL SHOPPING MALLS PRIVATE LIMITED, 34/1000, NH-47, EDAPPALLY, KOCHI, REPRESENTED BY ITS DIRECTOR, NISHAD.M.A., PIN – 682 024. BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA PARVATHY MENON RESPONDENTS: 1 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1), CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN – 682 018. 2 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI -110 001. 3 ASSESSMENT UNIT, INCOME TAX DEPARTMENT, DELHI , REPRESENTED BY THE INCOME TAX OFFICER, PIN – 100 001. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 19390/2023 : 2 : DINESH KUMAR SINGH, J. --------------------------------------------------------- W.P.(C). No. 19390 of 2023 --------------------------------------------------------- Dated this the 20th day of September, 2023. JUDGMENT The present writ petition has been filed seeking to quash Exhibit P21 order dated 23.05.2023 passed by the third respondent by adding an amount of Rs.21,86,27,050/- to total income under Section 198 of the Income Tax Act, 1961 ('Act, 1961' for short), and losses have been computed at Rs.46,93,51,692/-. 2. The petitioner company is an assessee under the provisions of the Act, 1961. The Income Tax Authorities initiated proceedings under Section 148 of the Act, 1961 with respect to the assessment year 2016-2017. The third respondent has issued Exhibit P15 show cause notice dated 10.05.2023 asking the petitioner assessee to show cause as to why the proposed variation of Rs.21,86,27,050/- should not be made and directing the petitioner to submit its response through registered e-filing account at www.incometax.gov.in by 11.00 hours of 15.05.2023. In response to the same, the petitioner has requested the third respondent to grant time till 22.05.2023 to submit its reply, as is evident from Exhibit P16 web page of the Income Tax Department. But, no decision was communicated to the petitioner in W.P.(C) No. 19390/2023 : 3 : respect of the said request for extension of time and the status of the said application was shown as ‘open’. 3. Thereafter, when the petitioner tried to upload his Exhibit P17 response pointing out its objections and requesting an opportunity of hearing before finalisation of assessment, it could not upload the same, since the window was closed. Accordingly, the petitioner has sent an e-mail to [e-mail] and [e-mail] on 22.05.2023 pointing out its inability to upload reply and requesting to open the e-proceedings facility in the web portal, and the Delhi Samadhan Faceless Assessment forwarded the said email to the third respondent. The petitioner has also addressed the issue before the Grievance Cell of the Faceless Assessment scheme on 22.05.2023, as is evident from Exhibit P20. However, without redressing the grievance of the petitioner, Exhibit P21 assessment order has been issued. Hence this writ petition. 4. The learned counsel for the petitioner submits that the denial of extension of seven days’ time sought for and the issuance of the impugned assessment order without passing any orders on the request of the petitioner, are in violation of the constitutional rights guaranteed under Article 14 of the Constitution of India. The W.P.(C) No. 19390/2023 : 4 : petitioner ought to have been given an opportunity to file a reply to the show cause notice within the time sought i.e., upto 22.05.2023. 5. Even the request of the petitioner was not conceded and without passing any order on the petitioner’s request for extension of time to file reply, assessment order has been passed. The learned counsel for the petitioner submits that the petitioner’s reply is ready and if this Court directs the third respondent to open the window for filing the reply, the petitioner will immediately upload the same. 6. Mr. John Joseph, the learned Standing Counsel appearing for the Revenue, submits that the petitioner was given enough and more opportunities in respect of various notices issued to him and the petitioner has failed to avail those opportunities and it culminated in passing of the Exhibit P21 assessment order. However, he is not in a position to deny that the petitioner’s request for grant of one week’s time i.e., upto 22.05.2023 was not addressed and no decision was taken for extending the time for filing reply to the show cause notice. 7. I have considered the rival submissions made across the Bar. 8. The liability of the tax is a civil liability. Principles of natural justice ought to be adhered to, while finalizing the assessment proceedings in respect of tax. It is not in dispute that the petitioner is issued with Exhibit P15 show cause notice dated 10.05.2023. In fact, W.P.(C) No. 19390/2023 : 5 : it is admitted that the petitioner has not submitted any reply to the same. The petitioner sought one week’s time till 22.05.2023 for filing reply and no decision was taken on the petitioner’s request for extension of time and the window was closed and finally assessment order was passed in the absence of any reply from the petitioner. 9. Considering the facts and circumstances, I am of the view that the assessing officer has proceeded in a hurried manner to some extent, which is in violation of the principles of natural justice. Therefore, the impugned Exhibit P21 order is set aside and the respondents are directed to open the window for uploading Exhibit P17 objection to the show cause notice. No further time will be granted to the petitioner for the purpose. The assessment proceedings should be finalised and a fresh assessment order be passed in accordance with law. The petitioner should be intimated a fresh date for filing reply to the show cause notice. With the aforesaid directions, this writ petition stands allowed. Let this order be communicated to the concerned authorities for compliance. sd/- DINESH KUMAR SINGH, JUDGE. Rv W.P.(C) No. 19390/2023 : 6 : APPENDIX OF WP(C) 19390/2023 PETITIONER’S EXHIBITS: EXHIBIT P1 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2016-17 DTD. 25-06-2021 EXHIBIT P2 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD. 30-05-2022 EXHIBIT P3 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT DTD. 28-07-2022 EXHIBIT P4 COPY OF INTIMATION ISSUED BY THE 2ND RESPONDENT DTD. 03-11-2022 EXHIBIT P5 COPY OF NOTICE ISSUED BY THE 3RD RESPONDENT DTD. 23-12-2022 EXHIBIT P6 COPY OF ACKNOWLEDGMENT ISSUED BY THE INCOME TAX DEPARTMENT DTD. NIL EXHIBIT P7 COPY OF NOTICE ISSUED BY THE 3RD RESPONDENT DTD. 11-01-2023 EXHIBIT P8 COPY OF NOTICE ISSUED BY THE 3RD RESPONDENT DTD. 19-01-2023 EXHIBIT P9 COPY OF ACKNOWLEDGMENT ISSUED BY THE DEPARTMENT DTD. NIL EXHIBIT P10 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD. 23-01-2023 EXHIBIT P11 COPY OF REPLY FILED BY THE PETITIONER AND ITS ACKNOWLEDGEMENT DTD. NIL EXHIBIT P12 COPY OF NOTICE ISSUED BY THE 3RD RESPONDENT DTD. 19-04-2023 EXHIBIT P13 COPY OF CORRIGENDUM FOR NOTICE ISSUED BY THE 3RD RESPONDENT DTD. 25-04-2023 EXHIBIT P14 COPY OF REPLY FILED BY THE PETITIONER AND ITS TWO ACKNOWLEDGEMENT DTD. NIL EXHIBIT P15 COPY OF SHOW CAUSE NOTICE ISSUED BY THE 3RD RESPONDENT DTD. 10-05-2023 EXHIBIT P16 COPY OF THE WEBPAGE OF THE INCOME TAX DEPARTMENT WEVIENCING THE FILING OF ADJOURNMENT APPLICATION DTD. 15-05-2023 EXHIBIT P17 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DTD. NIL EXHIBIT P18 COPY OF THE WEB PAGE OF THE INCOME TAX DEPARTMENT DTD. NIL EXHIBIT P19 COPY OF E-MAIL SUBMITTED BY THE PETITIONER'S CHARTERED ACCOUNTANT DTD. 22-05-2023 EXHIBIT P20 COPY OF ACKNOWLEDGEMENT ISSUED BY THE INCOME TAX DEPARTMENT DTD. NIL W.P.(C) No. 19390/2023 : 7 : EXHIBIT P21 COPY OF ASSESSMENT ORDER ISSUED BY THE 3RD RESPONDENT FOR THE YEAR 2016-17 DTD. 23-05-2023. EXHIBIT P22 COPY OF JUDGMENT IN WP (C) NO. 11735/2022 OF THIS HON'BLE COURT DTD. 16-03-2023. EXHIBIT P23 COPY OF JUDGMENT IN WP (C) NO. 11311/2022 OF THIS HON'BLE COURT DTD. 14-07-2022. RESPONDENTS’ EXHIBITS: NIL True Copy PS To Judge. rv "