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

WP(C)/14803/2022

AI Insights

The case involves a writ petition filed by Shanavas M. against the assessment order issued under Section 147 of the Income Tax Act, 1961. The petitioner challenged the order on the grounds of insufficient opportunity to object to the proposed assessment, claiming a violation of natural justice. The respondents contended that the petitioner had been given adequate opportunity and had responded within the time frame provided. The court examined the timeline of notices and responses, particularly focusing on the short duration granted for the objection to the showcause notice. Despite acknowledging the brevity of the time provided, the court concluded that the petitioner had effectively utilized the opportunity given, thus dismissing the writ petition.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 686033 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 19-05-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: O D SIVADAS
• Keywords: Assessment Order; Income Tax; Natural Justice; Showcause notice
• Section: 147; 142(1); 156

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS THURSDAY, THE 19TH DAY OF MAY 2022 / 29TH VAISAKHA, 1944 WP(C) NO. 14803 OF 2022 PETITIONER: SHANAVAS M. AGED 46 YEARS S/O. HAMSA, BROTHERS AUTOS, CITY CENTRE, CHANTHAKUNNU, NILAMBUR, MALAPPURAM DISTRICT, PIN 679 329 BY ADV O.D.SIVADAS RESPONDENTS: 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 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 14803 OF 2022 2 BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No. 14803 of 2022 ---------------------------------------- Dated this the 19th day of May, 2022 JUDGMENT Petitioner is challenging Ext.P9 order of assessment issued under Section 147 of the Income Tax Act, 1961(for short the Act). 2. The grievance of the petitioner is that, sufficient opportunity was not granted to him to object to the proposed assessment, thereby violating the principles of natural justice. Petitioner contends that infringement of the aforesaid principles is glaring in the order of assessment and hence he has invoked the jurisdiction under Article 226 of the Constitution of India. 3. Sri.O.D.Sivadas, the learned counsel for the petitioner invited my attention to the date of the showcause notice issued as Ext.P7, and argued that, the said notice was uploaded only on 26/3/2022- a Saturday, granting time only till 28/3/2022- Monday, to file the objection. The learned counsel also asserted that 27th March 2022, being a Sunday, petitioner did not have sufficient opportunity to effectively controvert the contentions in the WP(C) NO. 14803 OF 2022 3 showcause notice and therefore, Ext.P9 order is vitiated on account of violation of the principles of natural justice. 4. Sri.Christopher Abraham, the learned Standing Counsel for the Income Tax, on the other hand contended that sufficient opportunity was granted to the petitioner and that he had even filed his objections as evident from Ext.P8 reply notice, that too within the time granted. The learned counsel further contended that the objections raised by the petitioner were considered in the assessment order and hence this was not a fit case warranting interference under Article 226 of the Constitution of India, especially since petitioner has an effective remedy before the Appellate Authority. 5. I have considered the rival contentions raised on behalf of the petitioner as well as the respondents. 6. As rightly contended by the learned Standing Counsel, petitioner utilised the opportunity granted to him and filed an objection to the showcause notice on 28/3/2022. Petitioner even uploaded the necessary documents along with the objection. Thus, the opportunity granted to the petitioner to showcause was effectively utilised by him. Of course, I observe from the reply notice that petitioner had mentioned about the very short time line WP(C) NO. 14803 OF 2022 4 provided for submitting his reply and also, his reference to the request for more time to elaborate on the genuineness of the transactions with supporting documents. However, the contentions raised by the petitioner were dealt with by the assessing officer on merits, as is evident from Ext.P9 order and the same were rejected. 7. The jurisdiction of this Court under Article 226 of the Constitution of India does not warrant an appreciation of the merits of an order of assessment, for which an effective remedy is available before the Appellate Authority. Though the time limit provided to the petitioner was very short and bordered on the verge of denying an opportunity to effectively explain, still, since petitioner utilised the opportunity granted and even filed his objection with supporting documents, I do not find any infringement of the principles of natural justice, requiring this Court to interfere under Article 226 of the Constitution of India. 8. I must observe at this juncture that, this Court has been noticing a disturbing pattern on the part of the Income Tax department by granting minimal time to assessees to explain or answer showcause notices. The principles of natural justice mandate reasonable time to be given to the assessees to reply to WP(C) NO. 14803 OF 2022 5 showcause or other notices issued under the statute. The purpose of a showcause notice is to provide an opportunity to explain the allegations in the notice. Several steps precede the reply notice- collection of materials, verification of documents, appreciation of the allegations raised in the showcause notice, consultation with professionals etc. The aforesaid attributes that precede the preparation of response alone make an effective reply. When even minimal time to initiate the above mentioned steps is denied to assessees, this Court will be justified in exercising its extraordinary jurisdiction under Article 226 of the Constitution of India to interfere with such orders violating principles of natural justice. 9. However, adequacy of notice has to be determined on the basis of facts in each case. In the instant case, petitioner cannot complain of violation of the principles of natural justice because, though short, petitioner utilised the limited opportunity granted to him and filed an effective reply. In such circumstances, I am of the considered view that, the remedy of the petitioner, if any, is to move the Appellate Authority challenging Ext.P9. 10. Since this writ petition had been pending on the files of this Court from 26/4/2022, the period spent by the petitioner pursuing this litigation from 26/4/2022, till the date of receipt of a WP(C) NO. 14803 OF 2022 6 copy of this judgment shall stand excluded, while calculating the limitation period for preferring the statutory appeal. Reserving the aforementioned liberty this writ petition is dismissed. Sd/- BECHU KURIAN THOMAS JUDGE AJM WP(C) NO. 14803 OF 2022 7 APPENDIX OF WP(C) 14803/2022 PETITIONER’S EXHIBITS : Exhibit P1 TRUE COPY OF THE NOTICE DATED 2.12.2021 ISSUED UNDER SECTION 142 (1) OF THE INCOME TAX ACT, BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2015-16. Exhibit P2 TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER ON 4.1.2022 TO EXT.P1 NOTICE. Exhibit P3 TRUE COPY OF THE CONSOLIDATED TRADING AND PROFIT AND LOSS ACCOUNTS FOR THE YEAR 2015-16 ATTACHED ALONG WITH EXT.P2 Exhibit P4 TRUE COPY OF THE NOTICE DATED 9.2.2022 ISSUED BY THE 1ST RESPONDENT UNDER SECTION 142(1) OF THE INCOME TAX ACT, TO THE PETITIONER, Exhibit P5 TRUE COPY OF THE REPLY DATED 15.2.2022 SUBMITTED BY THE PETITIONER TO EXT.P4 NOTICE. Exhibit P6 TRUE COPY OF THE CASH FLOW STATEMENT FOR THE ASSESSMENT YEAR THEN ENDED ON 31.3.2015, ENCLOSED ALONG WITH EXT.P5. Exhibit P7 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 26.3.2022 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. Exhibit P8 TRUE COPY OF THE OBJECTIONS DATED 28.3.2022 SUBMITTED BY THE PETITIONER TO EXT.P7 SHOW CAUSE NOTICE. Exhibit P9 TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.2022 ALONG WITH COMMUTATION STATEMENT ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2015-16 Exhibit P10 TRUE COPY OF THE NOTICE OF DEMAND ISSUED IN PURSUANCE TO EXT.P9, UNDER SECTION 156 OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2015-16 DATED 29/03/22 //TRUE COPY// PA TO JUDGE "