THE ODISHA STATE CO OPERATIVE MILK PRODUCER FEDERATION LTD., BBSR V. THE DY. COMMNR. OF INCOME TAX, BBSR

WP(C)/17246/2023

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The case involves the Odisha State Cooperative Milk Producer Federation Ltd., which filed a writ petition against the Deputy Commissioner of Income Tax, Circle-1(1), Bhubaneswar, challenging an assessment order demanding Rs.24,22,66,781 and a penalty notice under various sections of the Income Tax Act. The petitioner argued that the show cause notice was issued and uploaded on the same day, leaving insufficient time for a response due to intervening holidays. The Income Tax Department contended that adequate opportunities were previously given. The court found that the petitioner was not given a proper opportunity to respond to the show cause notice, leading to the quashing of the assessment order and remitting the matter for re-adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 747629 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 27-06-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: T K SATAPATHY
• Assessee Lawyers: R P KAR
• Keywords: Assessment Order; Natural Justice; Opportunity of Hearing; Penalty notice; Show cause notice
• Section: 142(1); 274; 270A; 271AAC(1); 272A(1)(d); 234F

Judgement Text

" Page 1 of 4 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 17246 of 2023 The Odisha State Cooperative Milk Producer Federation Ltd., BBSR ….. Petitioner Mr. R.P. Kar, Adv. Vs. The Deputy Commissioner of Income Tax, Circle-1(1), Bhubaneswar and others ….. Opposite Parties Mr. T.K. Satapathy, Sr. S.C. (Income Tax) CORAM: DR. JUSTICE B.R. SARANGI MR. JUSTICE M.S.RAMAN ORDER 27.06.2023 Order No. 02. This matter is taken up through hybrid mode. 2. Heard Mr. R.P. Kar, learned counsel appearing for the petitioner and Mr. T.K. Satapathy, learned Sr. Standing Counsel appearing for the Income Tax Department. 3. The petitioner has filed this writ petition seeking to quash the assessment order dated 29.03.2023 passed by the Assessing Authority, namely, DCIT, Circle-1(1), Bhubaneswar under Annexure-10, demanding Rs.24,22,66,781/- and also the penalty notice issued under Section 274 read with Section 270A, 271AAC (1), 272A (1) (d) and 234 F of the Income Tax Act. 4. Mr. R.P. Kar, learned counsel appearing for the petitioner contended that a show cause notice was issued to the petitioner on 24.03.2023 under Annexure-9 fixing the date of hearing on 28.03.2023 at 5.00 P.M. for assessment of the income tax for the assessment year 2018-19 and the same was uploaded on the very same day, i.e., on 24.03.2023 at 8.16 P.M. It is contended that 25.03.2023 and 26.03.2023 Page 2 of 4 being holidays, i.e., Saturday and Sunday, it was not possible on the part of the petitioner to verify the factual matrix. As such, 27.03.2023 and 28.03.2023 are only the working days, but on 29.03.2023, the order of assessment raising demand of Rs.24,22,66,781/- was passed. It is contended that at least the petitioner should have been given reasonable opportunity of hearing while passing the order of assessment by the authority. It is further contended that even though the order of assessment is appealable, but the circumstances under which the order has been passed, the petitioner is constrained to approach this Court by filing the present writ petition. It is contended that the petitioner may be given opportunity of hearing in compliance of principles of natural justice so that it will substantiate its contention before the authority and, thereafter, the authority may pass appropriate order in accordance with law, if so desires. 5. Mr. T.K. Satapathy, learned Sr. Standing Counsel appearing for the Income Tax Department, per contra, vehemently contended that the contention raised by learned counsel appearing for the petitioner is not correct. He brought to the notice of the Court the contention recorded by the Assessing Authority in the assessment order that the petitioner has been given adequate opportunity of hearing by giving notice under Section 142(1) on 24.10.2022, 01.11.2022, 04.11.2022 and 14.02.2023. Therefore, it is contended that the contention raised that the petitioner has not been given any opportunity of hearing is absolutely not correct. But, he admitted the fact to the extent that the notice has been issued to the petitioner on 24.03.2016 and the order of assessment was passed on 29.03.2023. In any case, it is contended that the order passed by the Assessing Authority does not require any interference of this Court at this stage. Consequentially, dismissal of the writ petition is sought for. 6. Having heard learned counsel for the parties and after going Page 3 of 4 through the records, this Court finds that notice of show cause has been issued to the petitioner on 24.03.2016 fixing hearing on 28.03.2023 at 5.00 P.M. and the same was uploaded in the website on the very same day, i.e., 24.03.2023 at 8.16 P.M., which is apparent on the endorsement made in the document in the notice of show cause under Annexure-9. Though there is intervening holidays, i.e., 25.03.2023 and 26.03.2023, being Saturday and Sunday, the petitioner may not have any opportunity to verify or give reply to the notice of show cause because of the holidays. As such, 27.03.2023 and 28.03.2023 being only the working days, it is not possible on the part of the petitioner to collect the document all over the State and made available with it. Therefore, on 29.03.2023, though the petitioner has to approach the authority by filing the relevant documents to substantiate the contention raised in the notice of show cause, but due to non-availability of the documents as required to place before the authority, it could not pursue the same. But the Assessing Authority without giving any further opportunity to the petitioner, passed the order impugned, which itself indicates that the authority has shown undue haste in passing the order impugned. Even though the contention raised by Mr. T.K. Satapathy, learned Sr. Standing Counsel appearing for the Income Tax Department is accepted that earlier three opportunities had been given to the petitioner, but that merges with the notice of show cause issued on 24.03.2023 under Annexure-9. Therefore, the petitioner is required to give a detailed reply pursuant to the notice of show cause and, as such, that opportunity has not been given to the petitioner while passing the order impugned under Annexure-10. In any case, since the petitioner is a cooperative society and controlled by the State Government, there is no question of escape of the petitioner in any manner, even if any amount is payable by it. Thereby, the opposite party-authority should Page 4 of 4 have given opportunity of hearing to the petitioner to give its reply to the notice of show cause and, thereafter passed the order impugned under Annexure-10. 7. In the above view of the matter, this Court is of the considered view that compliance of natural justice being an essential condition required for passing an order by a statutory authority, in that case the order dated 29.03.2023 under Annexure-10 is lacking compliance of principles of natural justice. Thereby, this Court is of the view that the order dated 29.03.2023 passed by the Assessing Authority, namely, DCIT, Circle-1(1), Bhubaneswar under Annexure-10 cannot be sustained in the eye of law and the same is liable to be quashed and is hereby quashed. The matter is remitted back to the very same authority for its re-adjudication by giving opportunity of hearing to petitioner in compliance of the principles of natural justice pursuant to the notice of show cause dated 24.03.2023 under Annexure-9. The petitioner is directed to appear before the Assessing Authority on 05.07.2023 and on its appearance, the authority shall take necessary steps in accordance with the provisions of law. 8. The writ petition is accordingly disposed of. Ashok (DR. B.R. SARANGI) JUDGE (M.S. RAMAN) JUDGE Digitally Signed Signed by: ASHOK KUMAR JAGADEB MOHAPATRA Designation: Personal Assistant Reason: Authentication Location: HIGH COURT OF ORISSA Date: 28-Jun-2023 17:54:51 Signature Not Verified "