MALLISSERI NEELAKANDAN SANKARANUNNI NAMBOODIRI, V. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER,

WP(C)/39309/2022

AI Insights

The case involves Mallisseri Neelakandan Sankaranunni Namboodiri, an agriculturist and assessee under the Income Tax Act, 1961, who filed a writ petition to quash an assessment order issued by the Income Tax Department. The petitioner had sold 2000 rubber trees and incurred significant expenses for replanting, which he claimed affected his taxable income. The respondent issued a show cause notice and subsequently an assessment order demanding additional tax, which the petitioner contested on grounds of insufficient consideration of his replies and lack of an effective hearing opportunity. The respondent countered that the petitioner had been given multiple opportunities to respond but failed to do so in a timely manner. The court dismissed the petition, upholding the assessment order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 748665 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 13-07-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; R SREEJITH; K KRISHNA
• Keywords: Agricultural income; Assessment Order; Faceless assessment; Natural Justice; Rubber trees
• Section: 143(2); 270A

Judgement Text

"1 WP(C) No.39309 of 2022 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS THURSDAY, THE 13TH DAY OF JULY 2023 / 22ND ASHADHA, 1945 WP(C) NO. 39309 OF 2022 PETITIONER/S: MALLISSERI NEELAKANDAN SANKARANUNNI NAMBOODIRI, MALLISSERI MANA, PARASSERI P O., THADUKKASSERI, KERALASSERI, PALAKKAD., PIN - 678641 BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENT/S: THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, ASSESSMENT UNIT, INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI., PIN - 100001 Sri Jose Joseph, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 WP(C) No.39309 of 2022 C.S DIAS,J. --------------------------- WP(C) No.39309 of 2022 ----------------------------- Dated this the 13th day of July, 2023 . JUDGMENT The writ petition is filed, inter alia, to quash Ext P3 assessment order passed by the respondent. 2. The petitioner is an agriculturist by profession, and an assessee under the Income Tax Act, 1961 (in short, ‘Act’). He had sold 2000 rubber trees during the financial year 2019-2020, after their yielding period. Due to the replanting of nearly 2000 rubber trees, he had to spend approximately Rs.12,00,000/- to Rs.15,00,000/-. The entire income earned during the above period was not in surplus. The petitioner had filed 3 WP(C) No.39309 of 2022 proper returns as provided under the Act, for the assessment year 2020-21. However, the respondent has issued Ext P1 show cause notice, to which the petitioner submitted Ext P2 reply. To the surprise of the petitioner, the respondent has now issued Ext P3 assessment order, raising a demand for Rs.15,45,057/-. Ext P3 assessment order is patently illegal and arbitrary for more reasons than one. Firstly, the respondent has not adverted to the contentions raised by the petitioner in Ext P2 reply. Moreover, the petitioner came to learn about Ext P1 notice only on 20.9.2022. It is due to the said reason that the petitioner could submit his reply on 22.9.2022. Yet, the respondent has completed the assessment as if the petitioner has not responded to Ext P1 notice. Further, 4 WP(C) No.39309 of 2022 the respondent has not granted the petitioner an effective opportunity of being heard through video conferencing. The relevant provisions of Ext P4 notification clearly entitles the petitioner for an opportunity of being heard. The entire proceedings leading to Ext P3 order are vitiated. Now the respondent has issued Ext P5 show cause notice under Sec.270A of the Act. Hence, Ext P3 is liable to be quashed. 3. The respondent has filed a statement through its Standing Counsel, inter alia, refuting the allegations in the writ petition. According to the respondent, the petitioner’s return was selected for scrutiny under the Computer Aided Selective Scrutiny (CASS) for the reason of substantial increase in the petitioner’s 5 WP(C) No.39309 of 2022 agricultural income, when compared to the preceding return. The assessment was done under the Faceless Assessment Scheme. Notice was issued to the petitioner under Sec.143 (2) of the Act, calling upon him to submit the details within 15 days of receipt of the notice. Thereafter, six notices were issued to the petitioner, as stated in paragraph No.6 of the statement. Yet, the petitioner did not utilise the opportunities. The petitioner knew that assessment would be barred by limitation by 30.9.2022 and waited till 23.9.2022 to upload details. In the faceless assessment policy, an effective assessment can be completed, only if the assessee cooperates by uploading the relevant materials within the prescribed time period. There is wilful latches on the part of the 6 WP(C) No.39309 of 2022 petitioner in responding to the notices. There is no error committed by the respondent in passing Ext P3 order. The writ petition is meritless and is only liable to be dismissed. 4. Heard; Sri.Harisankar V.Menon, the learned counsel appearing for the petitioner and Sri.Jose Joseph, the learned counsel appearing for the respondent. 5. The petitioner’s principal grievance is that he was not granted a sufficient opportunity to submit Ext P2 reply and, therefore, Ext P3 order has been passed in violation of the principles of natural justice. 6. The respondent has specifically narrated in paragraph No.6 of the statement that, the petitioner was issued with notices on 29.6.2021, 9.11.2021, 20.12.2021 7 WP(C) No.39309 of 2022 and 7.2.2022, which did not evoke any response. It is only to the show cause notice dated 7.3.2022 and reminder letter dated 18.7.2022, that the petitioner submitted partial replies. It was finally to the notice dated 18.8.2022, that the petitioner submitted Ext P2 reply on 23.9.2022. 7. The above sequence of events undoubtedly demonstrates that the petitioner was granted sufficient opportunity to establish his defence. 8. Going by the concept of the faceless assessment scheme, the assessee is excepted to cooperate with the respondent within the time line laid down under the scheme, to enable the respondents to effectively complete the assessment. 8 WP(C) No.39309 of 2022 9. On an overall appreciation of the rival pleadings, particularly in paragraph No.6 of the statement, I do not find any error or illegality in Ext P3 order passed by the respondent, warranting interference by this Court in exercise of the plenary powers of this Court under Article 226 of the Constitution of India. Resultantly, the writ petition is dismissed, without prejudice to the right of the petitioner to work out his statutory remedies, in accordance with law, if any, available. SD/- sks/13.7.2023 C.S.DIAS, JUDGE 9 WP(C) No.39309 of 2022 APPENDIX OF WP(C) 39309/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF SHOW CAUSE NOTICE ISSUED BY THE RESPONENT DTD. 18-08-2022 Exhibit P2 COPY OF REPLY ALONG WITH ITS ACKNOWLEDGEMENT FILED BY THE PETITIONER DTD. 22-09-2022 Exhibit P3 COPY OF ASSESSMENT ORDER ISSUED BY THE RESPONDENT FOR THE YEAR 2020-21 DTD. 24-09- 2022 Exhibit P4 COPY OF NOTIFICATION NO. 60/2020 ISSUED BY THE MINISTRY OF FINANCE, GOVERNMENT OF INDIA DTD. 13-08-2020 Exhibit P5 COPY OF SHOW CAUSE NOTICE ISSUED BY THE RESPONDENT DTD. 19-10-2022 "