Theos Metals Trada Private Limited V. National Faceless Assessment Centre Delhi

WP/13739/2023

AI Insights

The case involves Theos Metals Trada Private Limited, which filed a writ petition against the National Faceless Assessment Centre, challenging the assessment orders, demand notice, and penalty orders issued for the assessment year 2021-22. The petitioner argued that the show-cause notice issued on 16.12.2022 did not comply with the SOP's requirement for a seven-day response period, as it only provided five days. The court agreed that this procedural inadequacy violated the principles of natural justice, leading to the setting aside of all contested orders and the remittance of the case for further proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798526 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 12-07-2023
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: V RAGHU RAM
• Keywords: Assessment Order; Natural Justice; Response time; Show cause notice; Standard Operating procedure
• Section: 143(3)

Judgement Text

" - 1 - NC: 2023:KHC:24284 WP No. 13739 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JULY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 13739 OF 2023 (T-IT) BETWEEN: 1. THEOS METALS TRADA PRIVATE LIMITED NO. 318A AND 318B MALUR III PHASE INDUSTRIAL AREA, KOLAR, MALUR - 563 160, KARNATAKA (REPRESENTED BY SHRI. VIJAYA LOKESH, MALUR, MANAGING DIRECTOR, AGED ABOUT 46 YEARS, S/O. HANUMANTHAIAH) A COMPANUY UNDER REGISTERED COMPANIES ACT, 2014 … PETITIONER (BY SRI. V. RAGHURAM, SENIOR ADVOCATE FOR SRI RAGHAVENDRA C R., ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE DELHI, (REPRESENTED BY PRINCIPAL COMMISSIONER OF INCOME TAX -4), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE - 560 095 … RESPONDENT (BY SRI. M. DILIP., ADVOCATE) Digitally signed by VIDYA G R Location: High Court of Karnataka - 2 - NC: 2023:KHC:24284 WP No. 13739 of 2023 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER NO.ITBA/AST/S/143(3)/2022- 23/1048265063(1) AND ITBA/AST/S/621/2022- 23/1048265120(1) DTD 27.12.2022, ENCLOSED AS ANNEXURE-A AND A1 PASSED BY R-1 AS BEING VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND ETC. THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has sought for setting aside the order at Annexure-'A' and 'A1' passed by the first respondent as being violative of principles of natural justice. 2. The petitioner has also sought for appropriate writ or order to restrain the respondents to proceed with recovery as per Demand Notice at Annexure-B and has sought to set aside the penalty orders at Annexure-C, D and E. 3. The learned Senior Counsel appearing for the petitioner would submit that during the course of the assessment proceedings for the assessment year 2021-22, show-cause notice dated 16.12.2022 was issued fixing the time as 21.12.2022 for reply and as the time afforded was - 3 - NC: 2023:KHC:24284 WP No. 13739 of 2023 insufficient and contrary to the standing instructions contained in the Standard Operating Procedure dated 03.08.2022, on that count itself the assessment order requires to be set aside as being in violation of principles of natural justice. 4. Heard both sides. 5. Admittedly, in terms of observation made in the assessment order, show-cause notice dated 16.12.2022 vide Annexure-R was issued and the time for response as regards show-cause notice of 16.12.2022 was fixed on 21.12.2022. 6. A perusal of Standard Operating Procedure (SOP) dated 03.08.2022 would indicate that in terms of N.1.3, response time for show-cause notice is seven days unless there was any issue regarding limitation. 7. In the present case, even if time for completion was 31.12.2022, the response time of seven days as - 4 - NC: 2023:KHC:24284 WP No. 13739 of 2023 mandated could have been made available in terms of N.1.3 8. Accordingly, on the sole ground of inadequacy of opportunity, also noticing that even if period of seven days was granted, the opportunity must be full and meaningful and accordingly, noticing that assessment order was passed on 27.12.2022 while the time prescribed for response was 21.12.2022, clearly further time could have been made available for reply to the show-cause notice. 9. Accordingly, on the sole ground that time made available for response was in violation of principles of natural justice as it was in contravention of N.1.3 of the Standard Operating Procedure dated 03.08.2022, the assessment order is set aside and the matter is remitted to the stage post show-cause notice dated 16.12.2022. 10. The petitioner is to be afforded an opportunity to file his reply during the course of further proceedings and may be provided with an opportunity including cross- examination of persons who have supplied information - 5 - NC: 2023:KHC:24284 WP No. 13739 of 2023 which is part of the proceedings as may be sought for in accordance with law. All contentions are kept open. 11. The assessment order at Annexure-A, A1 and demand notice at Annexure-B and Penalty order at Annexure-C, D and E are set aside. The matter is relegated to the respondent. All contentions are kept open. Accordingly, the petition is disposed off. Sd/- JUDGE NP "