UNITAC ENERGY SOLUTIONS INDIA PVT. LTD V. ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/1702/2017

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Unitac Energy Solutions India Pvt. Ltd. challenged the assessment order passed by the Assistant Commissioner of Income Tax, alleging procedural irregularities. The petitioner argued that the notices under Sections 143(2) and 142(1) of the Income Tax Act were not properly served or lacked specific details required for compliance. The Department contended that the notices were system-generated and that the petitioner had participated in the assessment process, thus waiving any claim of improper service. The court, acknowledging the technical defect in the notice under Section 143(2), set aside the assessment order and directed a fresh assessment with proper notice.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 699858 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 16-02-2017
• Assessment Year: misc
• Other Referred Cases: Travancore Diagnostics (P) Ltd. v. Asst. Commissioner of Income Tax [2016 (4) KLT 350]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: NISHA JOHN
• Keywords: Assessment Order; Computer Aided Scrutiny Selection; Procedural irregularity; System-generated notice; Technical defect
• Section: 142(1); 292BB; 143(2); 274; 271

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 16TH DAY OF FEBRUARY 2017/27TH MAGHA, 1938 WP(C).No. 1702 of 2017 (K) --------------------------- PETITIONER : ---------------------- UNITAC ENERGY SOLUTIONS INDIA PVT. LTD., 32/8-B4/1, 2ND FLOOR, SURYA GAYATRI, N.H.BYPASS, PUTHIYAROAD, NEW JUNCTION, KOCHI-682 032. BY ADV. SMT.NISHA JOHN RESPONDENT(S): ---------------------------- 1. ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1), KOCHI, 3RD FLOOR, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI-682 018. 2. PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI-682 018. R1 & R2 BY SR STANDING COUNSEL SRI.P.K.R.MENON SRI.JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16-02-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C).No. 1702 of 2017 (K) ---------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS --------------------------------------- EXHIBIT P1: TRUE COPY OF NOTICE DATED 3.9.2015 ISSUED U/S. 143 (2) OF INCOME TAX ACT BY THE IST RESPONDENT. EXHIBIT P2: TRUE COPY OF THE NOTICE DATED 27.7.2016 U/S.142 (1) AND SERVED ON THE ASSESSE ON 23.8.2016. EXHIBIT P3: TRUE COPY OF THE NOTICE DATED 15.12.2016 ISSUED BY THE IST RESPONDENT. EXHIBIT P4: TRUE COPY OF THE DEMAND NOTICE ALONG WITH THE ASSESSMENT ORDER AND NOTICE W/S. 274 R/W S.271 OF THE INCOME TAX ACT. EXHIBIT P5: TRUE COPY OF THE ACKNOWLEDGEMENT OF RECEIPT ISSUED BY RESPONDENT DATED 09/09/2016. RESPONDENT(S)' EXHIBITS ------------------------------------------ EXHIBIT R1(A): TRUE COPY OF THE SCREENSHOT TAKEN FROM THE ITD APPLICATION EVIDENCING THAT THE TYPE OF SCRUTINY IS 'COMPLETE', WHICH HAS BEEN GENERATED THROUGH THE SYSTEM. /TRUE COPY/ P.S.TO JUDGE sts K. Vinod Chandran, J ---------------------------------------- W.P.(C).No.1702 of 2017-K ----------------------------------------- Dated this the 16th day of February, 2017 JUDGMENT The petitioner is aggrieved with the assessment order passed for the assessment year 2014-15. The petitioner alleged procedural irregularity in the assessment carried on by the Assessing Officer. The assessment order impugned is produced at Exhibit P4. 2. The petitioner was issued with a notice under Section 143(2) of the Income Tax Act, 1961 [for brevity “the Act”] by Exhibit P1. The petitioner is said to have appeared before the Assessing Officer. Subsequently a notice under Section 142(1) of the Act was issued as per Exhibit P2. The petitioner was also asked to furnish certain details as is found from Exhibit P3. The Assessing Officer then finalised the assessment as per Exhibit P4. 3. The learned Counsel for the petitioner takes me through Section 143(2) to contend that there is a requirement to intimate the assessee, in the notice issued under Section 143(2) of WP(C) No.1702 of 2017 - 2 - the Act; the particulars of claim of loss, exemption, deduction, allowance or relief, to substantiate which the assessee has to produce further evidence or particulars. It is contended that the Circular of Central Board of Direct Taxes [for brevity \"CBDT\"] as per Instruction No.20/2015 dated 29.12.2015 requires certain formalities to be followed, which have not been complied with. The assessee has also not been served with a proper notice under Section 142(1) of the Act and the demand to furnish documents made as per Exhibit P3 was served on the assessee on the just previous day. The learned Counsel relied on a Division Bench judgment of this Court reported in Travancore Diagnostics (P) Ltd. v. Asst. Commissioner of Income Tax [2016 (4) KLT 350]. 4. The learned Standing Counsel for the Department would contend that Computer Aided Scrutiny Selection (CASS), as has been done in the present case, is a system generated notice; which has been issued to the petitioner by Exhibit P1. The petitioner appeared before the Assessing Officer through the authorised representative after the notice was issued. The entire particulars required was also intimated to the petitioner by way of WP(C) No.1702 of 2017 - 3 - questionnaire accompanying the notice under Section 143(2) of the Act. The questionnaire has not been produced in the present case. It is submitted that in the circumstance of an appearance by the assessee or the authorised representative before the Assessing Officer the subsequent notices could be served on such person who appears and there could be no claim of the notice not being properly served or timely served in the teeth of the provisions of Section 292BB. It is also contended that the limitation was fast approaching on 31.12.2016 and the assessee having participated in the enquiry and also having sought for adjournment twice, the Assessing Officer concluded the assessment by Exhibit P4, the impugned order. 5. In the present case, it is also submitted by the learned Standing Counsel for the respondent that the specific requirements to be specified in the system generated notice under the Computer Aided Scrutiny Selection had not been uploaded properly and in such circumstance the impugned notice was issued, as found in Exhibit P1. As of now the system generated notices specify the particulars required as available under Section WP(C) No.1702 of 2017 - 4 - 143(2) and CBDT Circular. In such circumstances, without going into the merits of the matter and a declaration on whether the proceedings carried out were valid, it could as well be directed that the petitioner's assessment be completed after a proper notice is issued. 6. In the context of the notice at Exhibit P1 being one system generated and there is no possibility of a further generation of a similar notice under Section 143(2), the Assessing Officer shall issue a notice to the petitioner showing the particulars which are required and in such circumstance, the petitioner shall appear before the Assessing Officer with objections, if any. The learned Counsel for the petitioner submits that the petitioner would require some time to collect the details. But since the assessment was already pending before the Department and the authorised representative was also appearing before the officer, the said request is declined. Only due to the technical defect of the particulars having not been supplied, this Court is interfering with the procedure. It is made clear that no interference is made to the notice under Section 143(2) or Section 142(1) of the Act especially WP(C) No.1702 of 2017 - 5 - when the entire particulars as required in the notice issued under Section 142(1) has not been produced. 7. In such circumstances, only to cure the defect of the entire particulars having not been put to the petitioner, the petitioner or their authorised representative shall appear before the Assessing Officer on 03.03.2017; on which day the notice specifying the particulars to be furnished shall be issued and personal acknowledgment taken. The Assessing Officer shall give the petitioner three weeks time to file objections from that date and also specify a date of hearing and on that fixed date the hearing shall be proceeded with and assessment completed. Exhibit P4 is set aside to facilitate fresh assessment. The writ petition is disposed of, specifically observing that there is no order on the merits of the case. Parties are left to suffer their respective costs. Sd/- K.Vinod Chandran Judge. Vku/- [ true copy ] "