Case Law Details
C. Prasannakumaran Unnithan Vs CIT (Kerala High Court)
Kerala High Court held that person who failed to avail the opportunity granted to him to make submissions cannot complain about the violation of principles of natural justice. Writ not entertained on account of availability of alternative remedy.
Facts- The present writ petition under Article 226 of the Constitution of India has been filed impugning the order on appeal u/s. 250 of the Income Tax Act passed by the National Faceless Appeal Centre, Delhi which is instituted against the order passed by the assessing authority in respect of the assessment year 2017-18. The appeal was instituted on 09.01.2020. The appeal remained pending. In the meantime, the Government notifies the Faceless Appeal Scheme, 2021 and this appeal was also taken up by the NFAC for decision.
The petitioner was issued notice on 20.07.2023 asking him to submit his written submissions in support of each ground of appeal along with supporting documentary evidence and documents. The petitioner was given time till 31.07.2023 for affording the written submissions and supporting documentary evidences in response to notice in the appeal. The petitioner on 31.07.2013 itself requested for time till 15.08.2023 for filing written submissions and supporting documentary evidence. This request was kept open and second notice dated 10.08.2023 was issued to the petitioner giving him time till 18.08.2023 for furnishing written submissions and documentary evidences with a warning that, if no submissions/information/documents are not received within the stipulated time period, it will be presumed that the petitioner has nothing to say in this matter and the Department will proceed ahead based on the material available on record.
The petitioner on 18.08.2023 i.e., the last date as per notice made a request for adjourning the hearing to 02.09.2023. The appellate authority without granting time as requested by the petitioner, passed the impugned order on merits.
Conclusion- A person who fails to avail the opportunity granted to him to make submissions and produce documents in support thereof cannot complain about the violation of principles of natural justice. The question of violation of the principles of natural justice arises when, without an opportunity of hearing or time for producing the evidence, the authority proceeds and passes an order against the person.
Held that the case of the petitioner does not fall within the exceptions carve out for entertaining the writ petition despite availability of alternative remedy. Further the Income Tax Appellate Tribunal can examine all the evidence which may not have been produced before the assessing authority or the appellate authority and also would consider all the submissions which may not have been taken before the appellate authority or the assessing authority to decide the second appeal under Section 253 of the Income Tax Act.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
1. Heard Mr. Aswin Gopakumar, Learned Counsel for the petitioner and Mr. Jose Joseph, Learned Standing Counsel for the respondents.
2. The present writ petition under Article 226 of the Constitution of India has been filed impugning the order on appeal under Section 250 of the Income Tax Act, passed by the National Faceless Appeal Centre, Delhi (hereinafter referred to as ‘NFAC’ for short) on 23.08.2023 which is instituted against the order dated 16.12.2019 passed by the assessing authority in respect of the assessment year 2017-18. The appeal was instituted on 09.01.2020. The appeal remained pending. In the meantime, the Government notifies the Faceless Appeal Scheme, 2021 and this appeal was also taken up by the NFAC for decision. The petitioner was issued Exhibit P-4 notice on 20.07.2023 asking him to submit his written submissions in support of each grounds of appeal along with supporting documentary evidence and documents as specified in the attached annexure. The petitioner was given time till 31.07.2023 for affording the written submissions and supporting documentary evidences in response to Exhibit P-4 notice in the appeal. The petitioner on 31.07.2013 itself requested for time till 15.08.2023 for filing written submissions and supporting documentary evidence. This request was kept open and second notice Exhibit P-6 dated 10.08.2023 was issued to the petitioner giving him time till 18.08.2023 for furnishing written submissions and documentary evidences with a warning that, if no submissions/information/documents are not received within the stipulated time period, it will be presumed that the petitioner has nothing to say in this matter and the Department will proceed ahead based on the material available on record. After second notice was issued, there was no response to the Exhibit P-5 request dated 31.07.2023.
3. It appears that the petitioner on 18.08.2023 i.e., the last date as per Exhibit P-6 notice for furnishing the written submissions and documentary evidence in support made a request for adjourning the hearing to 02.09.2023. The appellate authority without granting time as requested by the petitioner, passed the impugned Exhibit P-8 order on merits.
4. Learned Counsel for the petitioner submits that the appeal remains pending for almost three years before the appellate authority. After three years it was taken up for hearing and the petitioner was issued first notice Exhibit P-4 dated 20.07.2023 in which the petitioner requested for fifteen days i.e. up to 15.08.2023 for furnishing the written submissions and documentary evidences. No decision was communicated on the said request of the petitioner and the second notice Exhibit P-6 dated 10.08.2023 was issued to the petitioner asking him to upload the written submissions and documentary evidence by 18.08.2023. On 18.08.2023, the petitioner requested time till 02.09.2023 and without passing any order on the said request, in a hurry-burry, the appellate authority had passed the order in violation of the principles of natural justice. Learned Counsel for the petitioner placed reliance on the Judgment of the Supreme Court in MS Radha Krishan Industries Vs State of Himachal Pradesh (Civil Appeal No. 1155 of 2021 dated 20.04.2021) to submit that the availability of statutory alternative remedy is not a complete bar for entertaining a writ petition by the High Court if there has been violation of principles of natural justice or it involves the violation of fundamental rights of the writ petitioner. He, therefore, submits that the impugned order Exhibit P-8 passed by the appellate authority may be set aside and the petitioner be granted a last opportunity to upload his written submissions and documentary evidences for passing a fresh order by the appellate authority.
5. Mr. Jose Joseph, Learned Standing Counsel for the respondents has, however, submitted that the petitioner was granted enough opportunity to upload his written submissions and documentary evidences in support. The first notice Exhibit P-4 dated 20.07.2023 issued providing time to the petitioner till 31.07.2023 for furnishing the written submissions and documentary evidence, which he failed and on last date i.e. on 31.07.2023 he made a request for fifteen days further time for furnishing written submissions and supporting documentary evidence. The petitioner did not upload the documents and written submissions even within the time asked by him and in fact the time has extended till 18.08.2023 vide Exhibit P-6 dated 10.08.2023. On 18.08.2023 i.e. on the last date of Exhibit P-6 notice petitioner again made a request to extend the stipulated time vide Exhibit P-6 till 02.09.2023.
6. Learned Standing Counsel for the respondents further submits that the petitioner cannot be allowed to seek time again and again for uploading written submissions and documentary evidence in support thereof. A person who despite notice does not respond to the said notice cannot complain about the violation of the principles of natural justice. Mr. Jose Joseph further submits that in the present case there has been no violation of the principles of natural justice. There is remedy of appeal under Section 253 before the Income Tax Appellate Tribunal provided to the assessee for filing second appeal against the order passed by the first appellate authority and the petitioner can raise all grounds and produce all documents which are in his possession in support of this case. He further submits that the appellate authority has passed the order on merits and it has not summarily dismissed the appeal, and therefore, this Court may not entertain the writ petition and should relegate the petitioner to the alternate remedy of second appeal before the Income Tax Appellate Tribunal under Section 253 of the Income Tax Act.
7. I have considered the submissions advanced on behalf of the petitioner as well as Mr. Jose Joseph for the respondents.
8. It is true that the appeal filed by the petitioner remained pending for almost three years for hearing by the NFAC and the petitioner was issued first notice Exhibit P-4 dated 20.07.2023 asking him to upload his written submissions and documents in support thereof by 31.07.2023. The petitioner made two requests for uploading the written statements and documents in support thereof. Before the second notice Exhibit P-6 dated 10.08.2023, petitioner asked time till 15.08.2023 and in fact he was granted time till 18.08.2023. On last date of notice i.e. on 18.08.2023, he again asked time till 02.09.2023. The petitioner cannot complaint that he was not afforded opportunity to file written submissions and supporting documents. He had time till 18.08.2023 from 20.07.2023. But he failed to furnish written submissions and documentary evidence and again he requested for further time till 02.09.2023 pursuant to Exhibit P-6 notice dated 18.08.2023. A person who fails to avail the opportunity granted to him to make submissions and produce documents in support thereof cannot complain about the violation of principles of natural justice. The question of violation of the principles of natural justice arises when, without an opportunity of hearing or time for producing the evidence, the authority proceeds and passes an order against the person. I consider that, that is not the case here. Paragraph 27 of the Judgment of MS Radha Krishan Industries (supra) reads as under;
“27. The principles of law which emerge are that :
(i) The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well;
(ii) The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person;
(iii) Exceptions to the rule of alternate remedy arise where (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged;
(iv) An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law;
(v) When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion; and
(vi) In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with.”
9. Considering the ratio laid down by the Supreme Court in the aforesaid Judgment of MS Radha Krishan Industries regarding the exception for entertaining the writ petition despite availability of alternate efficacious remedy, I am of the view that the case of the petitioner does not fall within the exceptions carve out for entertaining the writ petition despite availability of alternative remedy. Further the Income Tax Appellate Tribunal can examine all the evidence which may not have been produced before the assessing authority or the appellate authority and also would consider all the submissions which may not have been taken before the appellate authority or the assessing authority to decide the second appeal under Section 253 of the Income Tax Act. The question regarding the Income Tax Appellate Tribunal being not efficacious forum for deciding appeals is also not called for inasmuch as the provisions of Section 253 is not in challenge before this Court.
10. In view thereof, I dispose of this writ petition with a direction to the petitioner to file an appeal before the Income Tax Appellate Tribunal against the impugned order within a period of one month from today and the petitioner may take all the grounds which are available to him and produce all evidence in support thereof. The Income Tax Appellate Tribunal shall consider the documents and grounds of the petitioner while disposing of the appeal in accordance with law expeditiously. Petitioner may also file an application for the stay of the demand in pursuance to the assessment order and the appellate authority shall consider the same expeditiously. If the petitioner deposits 20% of the assessed tax, the stay application shall be decided within a period of one month from the date of filing of the appeal and stay application.
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