Nava Bharat Ventures Limited V. Deputy Commissioner of Income Tax

WP/9147/2021

AI Insights

The case involves Nava Bharat Ventures Limited, which challenged an assessment order passed by the National e-Assessment Centre, Delhi, under Section 143(3) of the Income Tax Act, 1961. The petitioner argued that the assessment was arbitrary, illegal, and violated principles of natural justice, specifically citing violations of Articles 14 and 19(1)(g) of the Constitution of India. The dispute centered on an incorrect code entry in the tax return, which was intended to be rectified through a Section 154 application but was not considered before the final assessment was made. The High Court found that the failure to consider the rectification application before finalizing the assessment vitiated the assessment order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 753472 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 08-11-2021
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD; N RAJESHWAR RAO
• Assessee Lawyers: C V NARASIMHAM
• Keywords: Assessment Order; E-assessment; Income Tax; Natural Justice; Rectification Application; Writ of Mandamus
• Section: 143(3); 154; 143(3A); 143(3B)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE EIGHTH DAY OF NOVEMBER n/VO THOUSAND AND TWENTY ONE PRESENT THE HON'BLE SRI JUSTICE UJJAL BHUYAN AND THE HON,BLE DT. JUSTICE CHILLAKUR SUMALATHA i Between: AND 1. 2. Nava Bharat Ventures Limited, 6-3-1 109/1 Nava Bharat Chambers, Raj Bhavan Road Somajiguda, Hyderabad, Telangana - 500082 Represented by its Authorised Signatory ...pETrroNER Deputy Commissioner of lncome Tax, Nationa Tax Department Delhi 110 003 Deoutv Commissioner of lncome Tax, Circle 5 A.C.Glards, Masab Tank, Hyderabad 500004 Union of lndia, Rep. by lts Secretary, Departm Finance North Block, New Delhi - 1'10 001 I E-assessment Centre lncome (1)(old Circle 16(1)), l.T. Towers, ent of Revenue, tr/inistry of .RESPONDENTS Petition under Article 226 oI the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ Order or Direction more particularly in the nature of Writ of Mandamus declaring the impugned Assessment order no.ITBA/AST/S 1143(3)12020- 2111031557012(1) dated 1710312021 passed by the 1sr Respondent U/Sec 143(3) read with sections 143(3A) and 143(3E3) as being arbitrary. illegal and violative of principles of natural justice and violative of Articles 14 and 19(1)(g) of Constitution of lndia and consequently Set aside the Assessment Order and direct the Respondents to rectify the intimation U/Sec 143(1) dated 0111112019 no' cPC/1819/A6/1 g41144481 as per Petitioners rectification application dated 2211 1 12019 and'17 l1 12020. lA NO: 1 OF 2021 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the tax demand of Rs. 25.31,68.1361 and interest thereon demanded under the impugned Assessment order No. ITBA/AST/S/143(3)t2O2O-2111031557012(1) dated 1710312021 passed by the 1sr Respondent U/Sec 143(3) read with sections 143(3A) and 143(38) 1 I The Deoutv Commissioner of lncome Tax, National E-assessment Centre lncome'Ta-x Department Delhi 110 003 ifre Oeputy Coinmissioner of lncome Tax, Ciicle-S(1) (old Circle 16(1))' l'T' Towers, A.C.Guards, l ilasab Tank, HVOeraOaO.SOrO.$lrl,oNERS/REspoNDENrs 1 & 2 WRIT PETITION NO: 9147 OF 2021 lA NO: 2 OF 202'l: Between: AND t, '1 . Nava Bharat Ventures Limited, 6-3-1 109/1 Nava Bharat Chambers, Raj Bhavan Road Somajiguda, Hyderabad, Telangana - 500082 Represented by its Authorised Signatory ...REspoNDENT/wRrr pETrroNER 2. Union of lndia, Rep. by its Secretary, Department of Revenue, Ministry of Finance North Block' New Delhi - 1 10 001 ...REspoNDENT/RESpoNoENr No.3 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim orders dated 09/04/2021 in l.A.No. 1 of 2021 in W.P.No. 9147 of 2021 ,inthe interest of justice Counsel for the Petitioner: SRI C. V. NARASIMHAM Counsel for Respondent Nos. 1 & 2: SRI J.V PRASAD , ST.SC FOR INCOME TAX DEPARTMENT Counsel for Respondent No. 3: SRI N. RAJESHWAR RAO ASSISTANT SOLICITOR GENERAL The Court made the following: ORDER t, HONOURABLE SRI JUSTICE UJJAL BHUYAN AND HONOLIRABLE DR.JT]STICE CHILLAKT]R STIMALATHA W.P.N 0.9147 0F 2021 ORDER: ,Per Ilott t'le . rt.ltr.trre t itat Bhnotrt Heard Mr.C.V.Narasimharn, learned counsel for the petitioner and Mr.L. Venkateswara Rao learned Standing Counsel for the Income Tax Departrnent for respondents 1 and 2 2. By filing this petition under Article 226 of the Constitutron of India, petitioner has assailed the legality and validity of the assessrnent order dated 17 03 2021 passed by the National e-Assessment Centre, Delhi under Section 143(3) of the Inconte Tax Act, l96l (briefly, 'the Act' hereinafter) read with Sections 143(3A) and I43(3B) ofthe said Act for the assessrnent year 2018-19 3 Petitioner is an assessee rrnder the Act and within the jurisdiction ofrespondent No.2. For the assessment year 2018-19, it had filed return of incorne online showing returned lncolne at Rs. 1,76,34,89,68.0.00. 4. Because of certain disallowances, the assessed incorne was quantified at Rs.2,26,48,24,266.00 as per the impugned order of assessment e-filing of the return, petitioner had filled up the columns under the Head Code No.21008 - Other Services and Trade as'generation and xupply of power' under the heading 'nature of colnpany and its t business' instead of Code No.05001 and business as 'production, 5 Learned counsel fbr the petitioner subrnits that at the tirne of i collection and distribution of electricity', by inadvefient mistake' That was intirnated by Central Processing Centre (CPC), Bangalore on 01.11.2019. Thereafter, petitioner filed rectification petition under Section 154 of the Act on 17.01.2020 for changing the code and consequelttly to consider the depreciation claim. 6. While this was pending, petitioner's retttrn was selected for complete scrutlny assessment under the e-Assesslnent Scheme of 2019 by the National e-Assessment Centre, Delhi. When the draft assessment order was furnished and show cause notice was issued, petitioner had reqttested for two days adjournrnent, Thereafter, petitioner filed the response on 1'7.03.2021. Though the sard reqttest was not denied, by keeping the status 'open', the impugned assessment order was passed without considering the affect of the rectification application and also without considering the response of the petitioner dated I 7.03.202 I . 7. Learned counsel for the petitioner subrnits that it was the duty of responder.rt No. t i.e., National e-Assessmeut Centre, Delhi to have considered the rectification petition filed by the petitioner under Section 154 of the Act before finalizing the assesstnent. Failtrre to do so has caused serious prejudice to the petitioner, as it has led to assesslnent of income on much higher side without taking into account the inadvertent rnistake in entering tlte code number, which was sought to be rectified by the petitioner. 8. In the counter afTidavit filed by respondent Nos l and 2, it is stated that the Faceless Assessment Officer did not find any pending application under Section 154 ol the Act Petitioner had also not rnentioned about pending rectification applicatiort' I After hearing learned cottnsel for the parlies arld on due consideration, we are of the view that since the retrtm of the petitrorrer was taken tlp for complete scrutiny assessment through the National e-Assessment Centre, Delhi' before cornpletion of the assessment proceedings, the rectification petition filed by the petitioner urder Section 154 of the Act ought to llave been taken into corlsideration' Failure to do so has vitiated the irnpugned assessmerlt order dated 17.03.2021. 10. That being the posrtion' we set aside the assesstnent order dated 17.03.2021 and tetnatrd the lnatter back to respondent No 1 for fresh assessment order after giving effect to the rectificatton t passlllg a petition t'iled by the petitioner ou respondent No' 1 shall also take irrto by the petitioner on 17 03 2021 in re draft assessment order' 17.01.2020. While doing so' consideration the resPonse filed ply to the show cause notice and shall stand closed ll Writ petition is, accordingly' disposed of' Miscellaneous applications' if any pending' t2 1 To, L 2. 4. 5. j No costs r/TRuE copy, o\"t*rR''tut#tH SECTION OFFICER q111g g\"fi$***eili:,t\",l:.rtft\"' -\"'ffi * \"\" \"' 6. BC M tX I HIGH COURT DATED: 0811112021 1 6 SrArE tr 2i NoIr$fl .) * ORDER WP.No.914T of 2021 DISPOSING OF THE WRIT PETITION WITHOUT COSTS ,1, "