Case Law Details
Gaurav Controct Co. Through Hiralal Shivgan Dholu Vs National Faceless Assessment Centre (Gujarat High Court)
The subject matter of challenge is the legality and validity of the assessment order dated 30.07.2021 passed by the Assessing Officer under Section 143(3) read with Section 144B of the Income Tax Act, 1961 for the A.Y. 2018-19.
It appears that the case on hand being one of faceless assessment under Section 144B of the Act, a show cause notice along with the draft assessment order was issued to the writ applicant assessee on 14.06.2021. The assessee was asked to file his reply on or before 26.07.2021.
It is not in dispute that the writ applicant assessee filed his reply to the show cause notice.
It is noticed that Assessing Officer remained under an erroneous impression that the writ applicant – assessee has not filed his reply to the show cause notice. There is a detailed reply filed by the writ applicant – asseessee, which is on record. The aforesaid is suggestive of the fact that the Assessing Officer failed to consider the reply filed by the assessee and proceeded to pass the impugned assessment order.
On the aforesaid ground alone, we are inclined to quash and set aside the impugned assessment order and remit the matter to the Assessing Officer for a fresh consideration. While considering the matter afresh, the Assessing Officer shall take into consideration the reply, which has been filed by the assessee. The assessee shall also be heard before passing the final assessment order.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs:
“a. A Writ of Certiorari or writ, order or direciton in the nature of Certiorari quashing / set aside the Assessment Order passed u/s. 143(3) r.w.s. 144B of the Act for A.Y. 2018-19 making huge addition of Rs.9,87,82,395/- without considering the submission and request for personal hearing and passing high pitch assessment order by making addition on various grounds.
b. Pending hearing and final decision of the writ petition, to stay the assessment order and / or demand of Rs.4,43,56,034/-.
c. Pass any other order(s) as this Hon’ble Court may deem fit and more appropriate in order to grant interim relief to the petitioner.
d. Any order and further relief deemed just and proper be granted in the interest of justice.
e. To provide for the cost of this petition.”
2. We have heard Mr. Hardik Vora, the learned counsel appearing for the writ applicant and Mrs. Kalpana Raval, the learned senior standing counsel for the respondents.
3. We need not delve much into the facts of this case as we intend to dispose of this writ application on a short ground.
4. While issuing Notice, this Court passed the following order dated 06.9.2021.
“1. Under Article 226 of the Constitution of India, this petition is preferred seeking the direction in the nature of certiorari for setting aside the assessment order passed under Section 143(3) of the Income Tax Act, 1961, for the assessment year 2018-19 ignoring the reply in response of the draft assessment order and request for personal hearing. The total addition of Rs. 9,87,82,395/- on various ground is also a matter of grievance on the part of the petitioner who has approached this Court with the following prayers: –
“(a) A Writ of Certiorari or writ, order, or direction in the nature of Certiorari quashing/set aside the Assessment Order passed u/s 143(3) r.w.s. 144B of the Act for A.Y. 2018-19 making huge addition of Rs. 9,87,82,395/- without considering the submission and request for personal hearing and passing high pitch assessment order by making addition on various grounds.
(b) Pending hearing and final decision of the writ petition, to stay the assessment order and/or demand of Rs. 4,43,56,034/-.
(c) Pass any other order(s) as this Hon’ble Court may deem fit and more appropriate in order to grant interim relief to the petitioner;
(d) Any other and further relief deemed just and proper be granted in the interest of justice;
(e) To provide for the cost of this petition.”
2. It is urged by learned advocate Mr. Hardik Vora that in e-portal, the e-proceeding response acknowledgment number has been generated. The procedure for faceless assessment as provided under Section 144(B) requires all documents and replies to be submitted by virtual mode. The acknowledgment number is reflective of the response having given on 26.07.2021 which was the last date scheduled by the department and yet, the assessment finalized indicates nonresponse on the part of the petitioner.
3. Issue Notice returnable on 14.09.2021. Direct service to the respondent no.2 is permitted.”
5. Thereafter, on 28.09.2021, this Court passed the following order:
“Respondents are duly served. Learned advocate for the petitioner is seeking time. There shall be no coercive recovery pursuant to assessment order dated 30.07.2021 till the next date of hearing. The matter is being posted on 18.10.2021.”
6. Thereafter, on 18.10.2021, this Court passed the following order:
“1. Mr. Manish Bhatt, learned Senior Counsel requests the Court for availing time, as instructions are awaited at his end. A reply also needs to be filed in this matter.
2. S.O. to 23.11.2021. Interim relief granted earlier to continue till then.”
7. The subject matter of challenge is the legality and validity of the assessment order dated 30.07.2021 passed by the Assessing Officer under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (for short “the Act, 1961”) for the A.Y. 2018-19. The operative part of the impugned assessment order read thus:
“The assessment order is being passed u/s.143(3) read with S.144B of the I.T. Act, 1961 at assessed income at Rs.11,03,42,290/- along with interest under the provisions of the I.T. Act, 1961 is charged as applicable. Total income & tax thereon is computed in the Form ITNS 150, issued ITNS demand notice u/s. 156 & challan of the IT Act, 1961 accordingly and which form a part of the order. Penalty u/s 270A of the I.T. Act, 1961 and show cause notices are being issued as per discussion made in the body of assessment order.”
8. It appears that the case on hand being one of faceless assessment under Section 144 B of the Act, a show cause notice along with the draft assessment order was issued to the writ applicant assessee on 14.06.2021. The assessee was asked to file his reply on or before 26.07.2021.
9. It is not in dispute that the writ applicant assessee filed his reply to the show cause notice. This is evident from the stance of the Revenue itself as reflected in the affidavit-in-reply, more particularly, the averments made in para 10 thereof as under:
“10. So far the contention raised in Para-2.4 of the petition, I state and submit that the petitioner has filed the submission vide acknowledgement dated 26.07.2021 in response to draft show cause notice dated 14.07.2021.
It is further submitted by the petitioner that the detailed point wise reply for Para Nos.2 (i) to 2 (v) of the petitioner against the additions proposed in the draft assessment order issued vide draft show cause notice dated 14.07.2021. The petitioner has stated that it had made submissions and these details called for by the Assessing Officer were submitted either at the stage of the reply to the show cause notice issued on 14.07.2021 and earlier during the course of the assessment proceedings. This aspect is factually correct and hence, no comments are offered at present.
We may also quote paras 11 and 12 respectively as under:
“11. So far the contention raised in Para-2.5 of the petition, I state and submit that the petitioner seeks to state that the assessment order under section 143 (3) r.w.s. 144B was passed on 30.07.2021 by Rs.9,87,82,395/ submission making without filed by acknowledgment addition considering the petitioner No. 19274101260721 of the vide dated 26.07.2021 is response to draft show cause notice dated 14.07.2021. The petitioner also quoted the relevant part of the assessment order as under:
“Show cause notice along with draft assessment order was issued to the assessee on 14.07.2021 to furnish the reply on or before 26.07.2021. However, there was no response from the assessee. Subject to the findings and discussion made hereinabove based on material available on record, the total assessed income of the assessee is computed as under”
The order sheet entry of the assessment records show that the draft assessment order was issued vide show cause notice dated 14.07.2021 and the assessee had filed the submission on 26.07.2021.
12. So far the contention raised in Para-3.1 of the petition, I state and submit that the petitioner seeks to state the whole history of the case starting from the selection for scrutiny and issue of notice to finalization of the assessment without considering the reply dated 26.07.2021 filed by the petitioner. The petitioner has stated that the detailed reply was made on 26.07.2021 within the time allotted in the show cause notice issued on 14.07.2021. This reply was not considered by the Assessing Officer and assessment was finalised without considering the assessee’s submission.”
10. The Assessing Officer in the impugned assessment order has observed as under:
“Show cause notice along with draft assessment order was issued to the assessee on 14/07/2021 to furnish the reply on or before 26/07/2021. However, there was no response from the assessee.”
11. Thus, it appears that the Assessing Officer remained under an erroneous impression that the writ applicant – assessee has not filed his reply to the show cause notice. There is a detailed reply filed by the writ applicant – asseessee, which is on record. The aforesaid is suggestive of the fact that the Assessing Officer failed to consider the reply filed by the assessee and proceeded to pass the impugned assessment order.
12. On the aforesaid ground alone, we are inclined to quash and set aside the impugned assessment order and remit the matter to the Assessing Officer for a fresh consideration. While considering the matter afresh, the Assessing Officer shall take into consideration the reply, which has been filed by the assessee. The assessee shall also be heard before passing the final assessment order.
We clarify that we have even otherwise not expressed any opinion on merits of the case. We have thought fit to interfere only on the ground that the case is one of violation of the principles of natural justice.
In the result, this writ application succeeds and is hereby allowed. The impugned assessment order is hereby quashed and set aside. The matter is remitted to the Assessing Officer for a fresh consideration. Let the entire fresh exercise be undertaken at the earliest and completed within two months from the date of receipt of this writ of this order.
Direct service is permitted.
It means the A.O. will have additional 2 Months to Complete the Assessment Proceedings even in time barring cases.
In time barring cases if this approach is maintained by A.O. by passing assessment orders without considering replies or personal hearing Requests of the assessee, at the worst the matter will be remanded back to A.O. with additional time of 2 Months as done in this case, that too in cases where assessee prefer to file Writ with High Court which is too expensive affair. What about other asseseees who could not bear cost to file Writ petition with High Court ?
Whether any mistake of assessee in making reply will also be considered with same approach by Hon’ble high court and 2 Months extra time will be given to rectify his mistake of not filing a reply in given time so that assessment order can be reframed ? Please Share your Views. Thanks