PAN SYNTHETICS PRIVATE LIMITED V. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME-TAX OFFICER

WP/9563/2021

AI Insights

The case involves Pan Synthetics Private Limited, which filed a writ petition against the orders issued by the Income Tax Department under the faceless assessment scheme. The petitioner contested the rejection of their request for a personal hearing, which was crucial for their defense during the assessment for the year 2018-19. The court found that the rejection of the personal hearing request was contrary to the established procedures and principles of natural justice, leading to the quashing of the assessment and related notices.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 763035 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 02-09-2022
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Section 143(3) of the Act, Section 144B of the Act, Section 156 of the Act, Section 274 of the Act, Section 270A of the Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP
• Assessee Lawyers: TANMAYEE RAJKUMAR
• Keywords: Faceless assessment; Income Tax; Natural Justice; Personal hearing; Quashing order
• Section: 143(3); 274; 270A; 144B; 156

Judgement Text

"- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF SEPTEMBER, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.9563 OF 2021 (T-IT) BETWEEN: PAN SYNTHETICS PRIVATE LIMITED SURVEY NO. 24 PEDDANAPALYA VILLAGE TAVAREKERE HOBLI MAGADI MAIN ROAD BANGALORE 562 130 REP. HEREIN BY ITS DIRECTOR MR.TANMAYY MINNI …PETITIONER (BY MS.TANMAYEE RAJKUMAR, ADV.) AND: 1. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME- TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, ROOM NO 401, 2ND FLOOR E-RAMP, JAWAHARLAL NEHRU STADIUM DELHI 110 003 2. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 5(1)(2) BMTC BUILDING 80 FEET ROAD KORAMANGALA BENGALURU 560 095 3. PRINCIPAL COMMISSIONER OF INCOME TAX BMTC BUILDING, 80 FEET ROAD KORAMANGALA, BENGALURU 560 095 …RESPONDENTS (BY SRI. DILIP, ADV. FOR SRI. K.V.ARAVIND, ADV.) - 2 - THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING ORDER DATED 28.04.2021 (ANNEXURE-M) PASSED BY R1 UNDER SECTION 143(3) READ WITH SECTION 144B OF THE ACT FOR THE ASSESSMENT YEAR 2018-19 ETC. THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: ORDER In this petition, the petitioner has sought for the following reliefs: (a)Quashing order dated 28.04.2021 (Annexure-M) bearing DIN ITBA/AST/S/143(3)/2020-21/10327113 85(1) passed by the 1st Respondent under Section 143(3) read with Section 144B of the Act for the assessment year 2018-19; (b)Quashing the demand notice dated 28.04.2021 (Annexure-N) bearing DIN ITBA/AST/S/156/2020-21/1032711423 (1) issued by the 1st Respondent under Section 156 of the Act for the assessment year 2018-19; (c)Quashing the penalty notice dated 26.03.2021 (Annexure-P) bearing DIN ITBA/PNL/S/270A/2020-21/1032711448 (1) issued under Section 274 read with - 3 - Section 270A of the Act for the assessment year 2018-19; (d)pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity. 2. Heard learned counsel appearing for the petitioner and learned counsel appearing for the respondents and perused the material on record. 3. In addition to reiterating various contentions urged in the petition and referring to the material on record, the learned counsel for the petitioner invites my attention to the response at Annexure-L dated 26.04.2021 in order to point out that the petitioner had specifically requested an opportunity of personal hearing and to present the case as provided in the show cause notice. It is the grievance of the petitioner that despite the specific request made by the petitioner in the aforesaid response having been noticed by respondent no.1 in the impugned order, - 4 - respondent no.1 has erroneously proceeded to reject the said request on the ground that the petitioner's request for personal hearing is not possible since the assessment was made under faceless method. In this context, it is submitted that even under the faceless method, personal hearing is permissible by way of video conference linking which is done by the respondents in other cases. It is therefore submitted that the assessment order at Annexure-M and the consequential notices issued by respondent no.1 are vitiated, illegal, arbitrary and the same deserve to be quashed. 4. Per contra, the learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 5. As rightly contended by the learned counsel for the petitioner in the response dated 26.04.2021 at Annexure-L, the petitioner has specifically requested for personal hearing and despite the same having - 5 - been noticed by respondent no.1 in the impugned order, respondent no.1 has proceeded on the erroneous premise that personal hearing is not possible under the faceless method, which is contrary not only in law but also the procedure followed by the respondents in assessments made under the faceless method in respect of the persons who seek an opportunity of personal hearing. It is also relevant to state that even the show cause notice at Annexure-K itself makes it clear that the petitioner would be entitled to an opportunity of personal hearing. Under these circumstances, I am of the considered opinion that respondent no.1 clearly fell in error in rejecting the request of the petitioner for personal hearing and consequently the impugned assessment order at Annexure-M being not only contrary to the procedure prescribed but also violative of the principles of natural justice, the same deserves to be quashed and the matter requires to be remitted back to respondent no.1 for reconsideration afresh in accordance with law - 6 - after giving an opportunity of personal hearing to the petitioner. 6. In the result, I pass the following order: (i) The writ petition is hereby allowed; (ii) The impugned assessment order at Annexure-M dated 28.04.2021 passed by respondent no.1 is hereby quashed. Consequently, the impugned demand notice dated 28.04.2021 and the penalty notice dated 28.04.2021 at Annexures-N & P respectively are also hereby quashed; (iii) The matter is remitted back to respondent no.1 for reconsideration afresh in accordance with law; (iv) Respondent no.1 is hereby directed to give an opportunity of personal hearing to the petitioner by making suitable arrangements in this regard. - 7 - (v) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents etc. in support of its claim. Sd/- JUDGE hkh. "