TARUNSHREE COTTON PVT. LTD.,RAYAGADA V. INCOME TAX OFFICER,RAYAGADA

WP(C)/9147/2022

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The case involves Tarunshree Cotton Pvt. Ltd., the petitioner, challenging an assessment order and a penalty notice issued by the Income Tax Officer, Rayagada. The petitioner argued that the short notice period provided for compliance did not allow adequate time to prepare a response, violating principles of natural justice. The Income Tax Department contended that the petitioner was given sufficient opportunity to respond. However, the court found that the procedural requirements were not met, leading to the quashing of the assessment order and remitting the case back for proper adherence to due process.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 671257 (HC-ORISSA)
• Appeal Type: Others
• Pronouncement Date: 27-03-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUBASH CHANDRA MOHANTY
• Assessee Lawyers: R P KAR; P K MISHRA; LENIN RAJ K
• Keywords: Assessment Order; Hearing Opportunity; Natural Justice; Penalty notice; Show cause notice
• Section: 271(1)(c); 274

Judgement Text

" Page 1 of 3 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 9147 of 2022 Tarunshree Cotton Pvt. Ltd., Rayagada ….. Petitioner Mr. R.P. Kar, Sr. Advocate along with Mr. P.K. Mishra & Lenin Raj K. Vs. Income Tax Officer, Rayagarda & others ….. Opposite Parties Mr. Subash Chandra Mohanty, Sr. S.C. (Income Tax) CORAM: DR. JUSTICE B.R. SARANGI MR. JUSTICE G. SATAPATHY ORDER 27.03.2024 Order No. 09. This matter is taken up through hybrid mode. 2. Heard Mr. R.P. Kar, learned Senior Advocate appearing along with Mr. P.K. Mishra & Mr. Lenin Raj K, learned counsel for the petitioner; and Mr. Subash Chandra Mohanty, 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 29.03.2022 passed by the Assessing Authority, namely, I.T.O., Rayagada under Annexure-1, demanding Rs.2,02,55,092/- and also the penalty notice issued under Section 274 read with Section 271 (1)(c) of the Income Tax Act. 4. Mr. R.P. Kar, learned Senior Advocate appearing for the petitioner contended that a show cause notice was issued to the petitioner on 21.03.2022 under Annexure-7 fixing the date of compliance on 25.03.2022 for assessment of the income tax for the assessment year 2011-12 and the assessment order was passed on 29.03.2022. Thus, it was not possible on the part of the petitioner to verify the factual matrix with such short time notice. It is contended that Page 2 of 3 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. S.C. Mohanty, 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 contended that the petitioner has been given adequate opportunity of hearing by giving notice. 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 21.03.2022 and the order of assessment was passed on 29.03.2022. 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 through the records, this Court finds that notice of show cause has been issued to the petitioner on 21.03.2022 fixing dated of compliance on 25.03.2022. It is not possible on the part of the petitioner to collect the document and make available the same. Therefore, on 25.03.2022 under Annexure-8, the petitioner had to approach the authority for time for filing the relevant documents to substantiate the contention raised in the notice of show cause. But the Assessing Authority without giving any Page 3 of 3 further opportunity to the petitioner, passed the order impugned, which itself indicates that the authority has shown undue haste in passing the order impugned. 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-1. The opposite party-authority should 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-1. 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 29.03.2022 under Annexure-1 is lacking compliance of principles of natural justice. Thereby, this Court is of the view that the order dated 29.03.2022 passed by the Assessing Authority, namely, ITO, Rayagada under Annexure-1 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 21.03.2022 under Annexure-7. The petitioner is directed to appear before the Assessing Authority on 04.04.2024 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. Arun (DR. B.R. SARANGI) JUDGE (G. SATAPATHY) JUDGE Digitally Signed Signed by: ARUN KUMAR MISHRA Designation: ADR-cum-Addl. Principal Secretary Reason: Authentication Location: High Court of Orissa, Cuttack Date: 28-Mar-2024 15:32:05 Signature Not Verified "