SHANAVAS M. V. THE ADDITIONAL/JOINT/DEPUTY /ASSISTANT COMMISSIONER OF INCOME TAX

WA/1031/2022

AI Insights

The case involves Shanavas M., the proprietor of M/s. Brothers Autos, who appealed against the dismissal of his Writ Petition challenging the income tax assessment orders for the year 2015-16. The appellant had initially failed to file his tax returns on time, leading to notices under Sections 148 and 142 of the Income Tax Act. Despite submitting responses, he received a short notice period to reply to a show cause notice, which he contested as insufficient. The High Court of Kerala dismissed his Writ Petition, suggesting he could appeal to the appropriate authority, and excluded the time spent in litigation from the limitation period for filing an appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 683171 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-09-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: O D SIVADAS
• Keywords: Appeal; Assessment Year; Income Tax; Natural Justice; Show cause notice
• Section: 148; 142(1); 142(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 23RD DAY OF SEPTEMBER 2022 / 1ST ASWINA, 1944 WA NO. 1031 OF 2022 WP(C) 14803/2022 OF HIGH COURT OF KERALA APPELLANT/S: SHANAVAS M. AGED 46 YEARS S/O.HAMSA, BROTHERS AUTOS, CITY CENTRE, CHANTHAKUNNU, NILAMBUR, MALAPPURAM DISTRICT, PIN - 679 329. BY ADV O.D.SIVADAS RESPONDENT/S: 1 THE ADDITIONAL/JOINT/DEPUTY /ASSISTANT COMMISSIONER OF INCOME TAX THE NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, PIN - 110 054. 2 THE INCOME TAX OFFICER TIRUR, MALAPPURAM DISTRICT, PIN - 676 101. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 23.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA.1031/2022 -2- S.V.BHATTI & BASANT BALAJI, JJ. - - - - - - - - - - - - - - -- - - -- - - - - - - - - - -- - - - - - - - - WA NO. 1031 OF 2022 - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - JUDGMENT (Dated this the 23rd day of September 2022) Basant Balaji J., The appellant has filed this appeal aggrieved by the judgment in W.P.(C)No.14803 of 2022, whereby the Writ Petition was dismissed. 2. The said Writ Petition was filed to call for records leading to Ext.No.P9 and P10 orders and to quash the same. 3. The appellant, is the proprietor of M/s.Brothers Autos. For the assessment year 2015-16 he could not file WA.1031/2022 -3- the income tax returns in time. A notice under Section 148 of the Income Tax Act (for short 'the Act') was served on 1.4.2021. Immediately he submitted returns on 21.4.2021. Thereafter, a notice under Section 142(3) of the Act was received by the appellant on 25.11.2021 seeking the details of cash deposit during the subject assessment year. Though the appellant submitted a reply, another notice dated 2.12.2021 was received by him under Section 142(1) of the Act directing to submit the details regarding the accounts and documents specified in the Annexure to the notice. 4. A second notice under Section 142(1) of the Act was issued to the appellant on 9.2.2022. In the said notice also the appellant was directed to furnish source of cash deposit for the assessment year and also the cash flow WA.1031/2022 -4- statement. The appellant filed a reply on 15.2.2022 explaining the source of cash deposit and the cash flow statement. On 26.3.2022 Ext.P7 show cause notice was issued by the first respondent through online to the appellant. In Ext.P7 it was stated that the response should be filed before 23.59 hrs of 28.3.2022. 5. It is the case of the appellant that he has received the notice only on 26.3.2022 at 10.50 am and he was directed to submit a reply before 28.3.2022 and 27.3.2022 was being a Sunday, it was practically impossible for him to submit the reply within such a short time. The appellant filed Ext.P8 reply to the show cause notice dated 26.3.2022 on 28.3.2022 itself, in which it was requested to provide some more time to elaborate the genuineness of the WA.1031/2022 -5- supporting documents. The respondents thereafter, issued Ext.P9 assessment order assessing a total income of the appellant as Rs.2,16,08,650/- and assessed the tax for the assessment year as Rs.1,81,47,383/- A demand notice was also issued pursuant to Ext.P9. The appellant challenged the assessment order as well as the demand notice before this court under Article 226 of the Constitution of India in the Writ Petition. 6. The learned Single Judge noticed that though only two days time was given for filing the reply, the appellant has in fact filed his reply within the time granted by the authorities on 28.3.2022 itself and hence, the appellant cannot complain of violation of the principles of natural justice as he has utilized the limited opportunity granted to WA.1031/2022 -6- him. The learned Single Judge, thereafter, went on to hold that the appellant has got a remedy to challenge the order before the appellate authority and since the Writ Petition has been pending on the files of the court from 26.4.2022 the period spent by the appellant pursuant to the litigation from 24.6.2022 till the date of receipt of the judgment stands excluded while calculating the limitation period for preferring statutory appeal and dismissed the Writ Petition. 7. On going through the facts and circumstances of the case, though we are in full agreement with the finding recorded by the learned Single Judge as the appellant has availed of the opportunity to file reply to the show cause notice. The appellant cannot complain that there is violation of principles of natural justice. But taking into WA.1031/2022 -7- consideration of all facts and circumstances of the case and the short time by which the appellant had to file reply, we deem it appropriate to grant sufficient time to the appellant herein to work out the remedy of the appeal. The appellant is given liberty to file an appeal on or before 17.10.2022 by enclosing a copy of this judgment. In the meanwhile, all coercive steps pursuant to Ext.P9 and P10 shall be kept in abeyance. With these observations, the Writ Appeal is dismissed. Sd/-S.V.BHATTI, JUDGE sd/- BASANT BALAJI, JUDGE dl/ "