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WP/13167/2022

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The case involves a writ petition filed by the petitioner challenging the assessment order, computation sheet, and demand notice issued by the 1st respondent for the assessment year 2017-18. The petitioner argued that the notices were issued in violation of the principles of natural justice and Section 144-B of the Income Tax Act, 1961, as they were given insufficient time to respond due to the busy period of the financial year-end. The court found merit in the petitioner's argument, noting the heavy tax burden and the need for a fair opportunity to present his case and documents, leading to the decision to set aside the impugned orders and direct a fresh assessment process.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 811079 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 03-11-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: M KIRANMAYEE
• Assessee Lawyers: S DWARAKANATH
• Keywords: Assessment Order; Natural Justice; Penalty notices; Show cause notice; Writ of Mandamus
• Section: 270(A); 144(b); 270-A(1)(d)

Judgement Text

"HON’BLE SRI JUSTICE U.DURGA PRASAD RAO AND HON’BLE SRI JUSTICE T.MALLIKARJUNA RAO WRIT PETITION No.13167 of 2022 ORDER: (per UDPR, J) The petitioner seeks writ of mandamus to set aside the impugned assessment order dated 27.03.2022 passed by the 1st respondent for the assessment year 2017-18 along with the computation sheet dated 27.03.2022 and demand notice dated 27.03.2022 as being illegal, in violation of the principles of natural justice and contrary to Section 144-B of the Income Tax Act and consequently to set aside the penalty notices dated 27.03.2022 under Section 270-A & 270-A(1)(d) of the Income Tax Act, 1961 and direct the 1st respondent to make the assessment afresh after considering the objections on jurisdiction and after granting sufficient opportunity to the petitioner to submit replies along with the documentary evidence. 2. Heard learned Senior Counsel, Sri S.Dwarakanath, for the petitioner and Smt.M.Kiranmayee, learned senior standing counsel for the respondents. 2 3. The main plank of argument of learned counsel for petitioner is that the impugned show-cause notice for the assessment year 2017-18 was issued by the 1st respondent on 23.03.2022 through online at about 16.17 hours directing the petitioner to submit response through registered e-filing account at www.incometax.gov.in by 23.59 hours of 25.03.2022. As it was the last week before completion of the financial year and the petitioner and his auditor were busy at that time and therefore, suitable reply could not be prepared within the meagre time given by the 1st respondent and hence, the response could not be submitted by the petitioner. It is further submitted that the petitioner has a valid case to argue because the joint family acquisitions were wrongly shown as that of petitioner and entire burden of tax was shifted on to the petitioner and to disprove the same, he has voluminous record to submit. Unfortunately, time being too short, he could not submit his response along with documentary evidence through the online portal. In the meanwhile, the impugned assessment came to be passed on 27.03.2022. Learned counsel would thus lament that the principles 3 of natural justice were a casualty in the matter. On this main submission, learned counsel prayed to set aside the impugned order and the consequential penalty notices and direct the 1st respondent to afford reasonable opportunity to the petitioner to submit his response along with the documentary evidence and for fresh hearing of the matter. 4. Learned senior standing counsel opposed the writ petition on the submission that the impugned show-cause notice was the final show-cause notice as the petitioner has not responded to the earlier show-cause notices and therefore, the petitioner cannot naively argue that in the final show-cause notice only two days were given for submitting his response. Learned standing counsel also supported the impugned assessment order. 5. The point for consideration is whether there are merits in the writ petition to allow? 6. A perusal of the impugned show-cause notice shows that it was issued by the 1st respondent on 23.03.2022 at 16.17 hours giving time till 25.03.2022 to the petitioner to submit his response through his registered e-filing account. Admittedly, the period in 4 which the notice was issued was at the fag end of the financial year and generally all the assessees both individuals and establishments will be busy with submission of their returns and their auditors will also be busy. Therefore, we find some force in the submission of learned counsel for petitioner that due to such unavoidable circumstances, he could not submit his response within two days. 7. As can be seen from the impugned assessment order, the 1st respondent assessed the income of the petitioner and imposed tax plus interest to a tune of ₹14,48,09,947/-. Having regard to the fact that the tax burden as per the impugned assessment order is heavy and considering the contention of petitioner that joint family acquisitions are tagged to his individual account, the principles of natural justice require that the assessee should be heard and the documents submitted by him shall be considered before making the assessment. Unfortunately, that was not done in this matter. Therefore, we consider it apposite to afford an opportunity to the petitioner to submit his case before the 1st respondent to enable it to make fresh assessment. 5 8. Accordingly, this writ petition is allowed and the impugned assessment order and consequential penalty notices are set aside with a direction to the 1st respondent to issue a fresh show-cause notice to the petitioner and give sufficient time to submit his response along with relevant documents and fix a date and afford a video conferencing hearing to the petitioner and then, consider his submission as well as documents and pass an appropriate order in accordance with the governing law and rules expeditiously. No costs. As a sequel, interlocutory applications pending, if any, shall stand closed. _________________________ U.DURGA PRASAD RAO, J _________________________ T.MALLIKARJUNA RAO, J 03.11.2022 Note: issue C.C. by tomorrow. B/o.SS "