Case Law Details
Patna Smart City Limited Vs Assessment Unit (Patna High Court)
In the case of Patna Smart City Limited Vs Assessment Unit (Patna High Court), the petitioner, a government company funded by the government, challenged certain assessment orders issued under the Income Tax Act, 1961. The petitioner argued that the scrutiny was conducted contrary to the guidelines issued by the Central Board of Direct Taxes (CBDT) for the financial year 2021-22. The court, however, ruled that the CBDT guidelines for compulsory scrutiny did not prevent the random selection of cases by the Assessing Officers (AOs). The guidelines were designed for mandatory scrutiny categories, and they did not restrict other cases from being scrutinized. Additionally, the petitioner claimed a violation of natural justice due to the absence of a personal hearing. The court found that while the petitioner did not request a personal hearing explicitly in the application, the system allowed such a request. Since no personal hearing was sought, the court determined there was no violation of natural justice. Consequently, the court dismissed the writ petition, noting that the petitioner could file an appeal if desired, subject to exceptions including the limitation period.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The petitioner, a government company is before this Court, challenging Annexure-P/7 series of assessment orders; when there is statutory appellate remedy provided under the Income Tax Act, 1961. The contention raised by the petitioner is that no scrutiny could have been carried out, as per the guidelines issued by the Central Board of Direct Taxes, as produced at Annexure-P/9 dated 10.06.2021. It is also submitted that the petitioner is a completely owned government company depending only on the government funds to carry out the development activities with its seat at Patna; totally funded by the Government.
2. The guidelines, as placed at Annexure-P/9 is one for compulsory selection for returns of complete scrutiny during the financial year 2021-22 and the conduct of the assessment proceedings in such cases. The learned Counsel for the petitioner asserted that the petitioner does not come under any of the categories prescribed. However, we are of the opinion that the guidelines are only for compulsory selection of returns for scrutiny and it does not preclude random selection for scrutiny by the Assessing Officers. The categories coming under the guidelines are those which are to be taken up mandatorily for scrutiny and this does not create any restriction of any other category being taken up for scrutiny.
3. The next contention is one of violation of principles of natural justice, insofar as no hearing having been granted to the Admittedly, the petitioner while uploading the application did not seek for an opportunity for personal hearing. The petitioner’s contention is that the reply filed specifically sought for such personal hearing. As per the system generated notices and uploading of on-line replies in specified forms; there is a specific column provided for requesting personal hearing. Unless the personal hearing is sought for, there would be no requirement to issue such personal hearing. Admittedly, in the present case, the column for personal hearing was not ticked as ‘Yes’. The reply was filed and it was duly considered in the order passed. We find absolutely no reason to interfere with the order also on the ground of violation of principles of natural justice.
On the above reasoning, we find absolutely no reason to invoke the extra ordinary remedy under Article 226. We dismiss the writ petition, however, leaving the petitioner to file an appeal, if so desired, subject to just exceptions; including that of limitation.
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