RAGHUBAR DAYAL SINGHAL V. UNION OF INDIA

WPT/98/2023

AI Insights

The case involves Raghubar Dayal Singhal, the petitioner, who contested the assessment order issued by the Income Tax Department for the assessment year 2018-19. The petitioner argued that he was not granted a personal hearing as per his request, which he claimed was a violation of the procedural requirements under Section 144B(6)(vii) and (viii) of the Income Tax Act, 1961. The respondents contended that the petitioner had an alternate remedy of appeal and that the assessment was conducted following the legal provisions. The High Court found that the failure to provide a personal hearing, despite the petitioner's request, constituted a violation of the principles of natural justice, warranting the setting aside of the assessment order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 724108 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 21-04-2023
• Assessment Year: misc
• Other Referred Cases: Harbanslal Sahnia v. Indian Oil Corpn. Ltd., Assistant Commissioner of Sales Tax & others vs. Commercial Steel Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: S RAO; MANOJ SINHA
• Keywords: Assessment year 2018-19; Faceless assessment; Income Tax; Personal hearing; Violation of Principles of Natural Justice
• Section: 147; 148; 144; 142(1); 139; 148A(b); 148A(d); 144B(6)(viii); 144B(6)(vii); 144B(7)(vii); 144B(7)(viii); 144B(7)(ix)

Judgement Text

"NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 98 of 2023 • Raghubar Dayal Singhal S/o Late Shri S.D Singhal Aged About 78 Years Link Road, C.M.D. Chowk, Bilaspur (C.G.) Pin-495001. ---- Petitioner Versus 1. Union Of India Through Secretary, Central Board Of Direct Taxes, North Block, New Delhi. 2. Principal Commissioner Of Income-Tax Aaykar Bhawan, Civil Lines, Raipur (C.G.) - 492001. 3. Assistant Commissioner Of Income-Tax Circle-1(1), Aaykar Bhawan, Vyapar Vihar, Bilaspur (C.G.) 4. Assessment Unit, National Faceless Assessment Centre, Income-Tax Department Through Principal Commissioner Of Income-Tax, Jhandewalan, New Delhi. ---- Respondents ------------------------------------------------------------------------------------------------------------------------- For Petitioner : Shri S Rajeswara Rao, and Shri Manoj Kumar Sinha, Advocates For Respondents ; Shri Ajay Kumrani, Advocate on behalf of Shri Amit Choudhary, Advocate ------------------------------------------------------------------------------------------------------------------------- Hon'ble Shri Justice Parth Prateem Sahu Order on Board 21.04.2023 1. Learned counsel for petitioner submits that petitioner filed return for the assessment year 2018-19 on 28.03.2019 under Section 139 of the Income Tax Act, 1961 (for short, 'Act of 1961') declaring total income at Rs.6,19,230/-. Respondent- 4 issued notice under Section 148 of the Act of 1961 stating that as per information petitioner sold immovable property worth of Rs.7,25,55,862/-, and mentioned Rs.50,00,000/- as sale consideration for purpose of Section 50C of the Act of 1961. Notice under Section 148A(b) of the Act of 1961 was issued to which petitioner replied, and thereafter, order under Section 148A(d) of the Act of 1961 was passed without supplying copies of relevant statements. Respondent-4 further issued notice under Section 142(1) of the Act of 1961, dated 24.01.2023 proposing variation of income, petitioner filed reply to said notice on 11.02.2023 also Wpt 98 of 2023 2 requested that, opportunity of personal hearing may also be granted in terms of Section 144B(6) (vii) and (viii) of the Act of 1961. 2. It is contended that as petitioner was not granted opportunity of personal hearing, proceeding of assessment order is vitiated and therefore, petition be allowed and matter be remitted back to respondent-4 for passing order afresh after giving opportunity of personal hearing to petitioner in terms of 144B(6) (vii) and (viii) of the Act of 1961. 3. Learned counsel for respondents opposes submission of counsel for petitioner and would submit that from contents of order Annexure P1 dated 11.03.2023 it is apparent that several notices were issued and the last notice was dated 24.01.2023 and last date to submit reply was 30.01.2023. Document enclosed along with writ petition stating to be reply submitted by petitioner Annexure P8, is dated 11.02.2023 and no separate application has been submitted by petitioner making request for personal hearing and therefore, the proceeding initiated by respondent-4 in passing assessment order is in accordance with law. 4. Learned counsel for respondents also submits that petitioner is having alternate remedy of appeal under Section 246 A of the Act of 1961, and therefore, petitioner is not entitled for relief as prayed for in this writ petition. 5. Heard learned counsel for the parties and also perused documents placed on record. 6. Order Annexure P1 Assessment order placed on record would show that reply submitted by petitioner on 11.02.2023 was considered by respondent-4 and Wpt 98 of 2023 3 noted that reply submitted by petitioner was not found to be satisfactory. From the said observation made by respondent-4 in the order it is apparent that pursuant to notice issued, petitioner submitted reply, it reached in Office of respondent-4 and also reply was considered. If reply is considered then, prayer made in reply for grant of personal hearing also came to notice of respondent-4. 7. Counsel for respondents does not dispute with respect to observation made in order Annexure P1 with respect to consideration of reply by respondent-4 before passing assessment order under Section 147 rw Section 144 of the Act of 1961. 8. Relevant provision under Section 144B(7)(vii), (viii) & (ix) of the Act of 1961 are extracted below for ready reference. “[144B. Faceless Assessment.- (1) x x x (2) x x x (3) x x x (4) x x x (5) x x x (6) x x x (7) For the purposes of faceless assessment―(i) x x x (ii) x x x (iii) x x x (iv) x x x (v) x x x (vi) x x x (vii) in a case where a variation is proposed in the income or loss determination proposal or the draft order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the income ord lo determination proposal, the assessee or his authorsed representative, as the case maybe may request for personal hearing so as to make his oral submissions or present his case before the income authority of the relevant unit. (viii) the Chief Commissioner or the Director General, in charge of the Regional Faceless Assessment Centre, under which the concerned unit is set up, may approve the Wpt 98 of 2023 4 request for personal hearing referred to in clause (vii) if he is of the opinion that the request is covered by the circumstances referred to in sub-clause (h) of clause (xii); (ix) where the request for personal hearing has been received, the income-tax authority of relevant unit shall allow such hearing through National Faceless Assessment Centre, which shall be conducted exclusively through video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board.” 9. From bare perusal of above provision, the language used, it is apparent that opportunity of personal hearing is to be granted if the assessee wants the same. When the request for personal hearing is made and received in office of authority, it is mandatory to allow such hearing. In aforementioned facts of the case it is apparent that mandatory provision under the Act of 1961 has not been complied with by respondent-4 as the request made in reply for grant of personal hearing was not considered and he was not allowed such hearing. 10. So far as submission of learned counsel for respondents that these writ petitions are not maintainable in view of availability of efficacious alternative statutory remedy of filing of appeal under Section 49 (4) of the Act of 2005 is concerned, normally writ petitions filed by-passing alternate statutory remedy available under the law are not to be entertained, but there is no absolute bar. The bar created by Courts is self-restrained. Writ petition filed directly before the High Court under Article 226 of the Constitution of India can be entertained in cases where petitioner / petitioners can able to show that, (i) writ petition has been filed for enforcement of any of fundamental rights; (ii) where there has been violation of principles of natural justice; (iii) where order or proceeding is absolute without jurisdiction; or vires of an Act is challenged. Hon'ble Supreme Court in case of Wpt 98 of 2023 5 Harbanslal Sahnia v. Indian Oil Corpn. Ltd. reported in (2003) 2 SCC 107 held thus:- “7.So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged [ See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors. (1998) 8 SCC 11]. The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings. Recently, in case of Assistant Commissioner of Sales Tax & others vs. Commercial Steel Limited reported in 2021 SCC Online SC 884, Hon'ble Supreme Court while dealing with question of maintainability of writ petition has held that the High Court having regard to the facts of the case, can exercise discretion to entertain or not to entertain writ petition. An alternative remedy is not an absolute bar for invoking writ jurisdiction of the High Court under Article 226 of Wpt 98 of 2023 6 the Constitution of India and in cases where the authority against whom writ is filed is shown to have had no jurisdiction or had usurped jurisdiction without any legal foundation, writ petition can be entertained. 11. For the foregoing discussion, as petitioenr was not granted opportunity of personal hearing as requested by him in his reply, resulting in non-compliance of the provision under Section 144B(6) (vii) and (viii) of the Act of 1961, I am inclined to allow this petition. 12. Accordingly, petition is allowed. Order of assessment dated 11.03.2023 is set aside and matter is remitted back to respondent-4 for passing order afresh after granting opportunity of personal hearing to petitioner as requested by him in his reply. Sd/- (Parth Prateem Sahu) JUDGE padma "