Wadakkancherry Service Co-operative Bank Ltd. V. The Income Tax Officer, Ward 2 (1) and The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, Income Tax Assessment Unit, National Faceless Assessment Centre, Delhi

WA/382/2024

AI Insights

The case involves M/s. Wadakkancherry Service Co-operative Bank Ltd., which is the appellant, challenging the assessment order passed by the Income Tax Officer. The appellant's income tax return for the assessment year 2020-21 was selected for scrutiny, and a show cause notice was issued. Due to Onam holidays, the appellant could not respond by the deadline, leading to a delayed submission. The assessment was completed without considering the appellant's objections or providing a personal hearing, resulting in a demand of `60,68,335. The appellant's challenge to the assessment order was initially unsuccessful before a Single Judge, leading to this writ appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 672493 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-03-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: HARISANKAR MENON; K KRISHNA MEERA MENON; R SREEJITH
• Keywords: Assessment; Income Tax; Natural Justice; Personal hearing; Scrutiny
• Section: 80P

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH MONDAY, THE 18TH DAY OF MARCH 2024 / 28TH PHALGUNA, 1945 WA NO. 382 OF 2024 AGAINST THE JUDGMENT DATED 23/1/2024 IN WP(C) NO.30992 OF 2022 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: M/S. WADAKKANCHERRY SERVICE CO-OPERATIVE BANK LTD., AGED 55 YEARS NO. 3279, THALAPPILLY, WADAKKANCHERRY, THRISSUR , REPRESENTED BY ITS SECRETARY, MADANAN.K.P., ddddPIN - 680582 BY ADVS. HARISANKAR V. MENON K.KRISHNA MEERA V.MENON R.SREEJITH RESPONDENTS/RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 2 (1), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR,THRISSUR, PIN - 680001 2 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME TAX ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE,DELHI, PIN - 100001 SC-JOSE JOSEPH THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA No.382/2024 -:2:- J U D G M E N T Dr. Kauser Edappagath, J. The appellant is a Co-operative Society providing credit facilities to its members and is an assessee to income tax. 2. The appellant filed income tax return with respect to the assessment year 2020-21 relevant to the financial year 2019- 2020. The appellant’s case was selected for scrutiny through CASS under the complete scrutiny category, and Ext.P1 show cause notice was issued directing him to file objection before 9/9/2022. The appellant did not file reply on or before 9/9/2022 due to the fact that its office was closed on account of Onam holidays. According to the appellant, its office resumed functioning only on 12/9/2022, and by that time, the online functionality to file reply in the income tax portal had already closed. Therefore, the appellant filed Ext.P2, a reply to the 1st respondent/jurisdictional assessing authority, on 14/9/2022, pointing out the objections as well as requesting an opportunity WA No.382/2024 -:3:- for a personal hearing through video conferencing. However, the 2nd respondent completed the assessment and passed Ext.P3 assessment order, creating a demand for `60,68,335/-. The appellant challenged Ext.P3 order unsuccessfully before the learned Single Judge. It is challenging the judgment of the learned Single Judge; the appellant is before us. 3. We have heard Sri.Harisankar V.Menon, the learned counsel for the appellant and Sri.Jose Joseph, the learned Standing Counsel for the Income T ax Department. 4. Though the appellant was directed to file reply to Ext.P1 on or before 9/9/2022, it is not in dispute that it gave Ext.P2 reply to the 1st respondent on 14/9/2022. In Ext. P2 reply, the appellant has not only pointed out its objections to the facts stated in Ext.P1 but also requested an opportunity for a personal hearing through video conferencing. In Ext.P2, the appellant has given a detailed bifurcation of the miscellaneous income of `1,30,67,114/- and claimed for deduction under Section 80P of the Income T ax Act. It is true that the appellant could not file reply to Ext.P1 through online mode. But the fact remains that he gave reply directly to the 1st respondent on 14/9/2022. Ext.P3 WA No.382/2024 -:4:- order was passed on 23/9/2022. Even though the 1st respondent received Ext.P2 reply well in advance, he did not consider the same at all while passing Ext.P3 order. That apart, no opportunity for personal hearing as requested in Ext.P2 was given. In these circumstances, we are of the view that there is a clear violation of the principles of natural justice. Hence, the impugned judgment, as well as Ext.P3, are not sustainable, and we set aside the same. The 1st respondent is directed to redo the assessment taking into account the bifurcation of interest component shown in Ext.P2 reply and also giving an opportunity for personal hearing to the appellant. The 1st respondent shall, thereafter, pass a fresh assessment order within two months from the date of receipt of a copy of this judgment. Writ appeal is disposed of as above. Sd/- DR. A.K.JAYASANKARAN NAMBIAR JUDGE Sd/- DR. KAUSER EDAPPAGATH JUDGE Rp "