S K Srivastava Vs Central Board of Direct Taxes (Delhi High Court)
The Income Tax Act, 1961 provides complete machinery for the assessment/ reassessment of tax, imposition of penalty and for obtaining relief with respect to an improper order. One ought to not abandon this machinery and invoke the jurisdiction of the High Court u/A 226 of the Constitution when adequate remedy is available to him by way of appeal.
Facts- The petitioner has invoked the writ jurisdiction of this Court to quash and set aside the notice dated 27.03.2021 issued under Section 148 of the Act for A.Y. 2016-17 and further notice issued under Section 142(1) of the Act for A.Y. 2016-17 and the order dated 09.02.2022 disposing of objections of National Faceless Assessment Centre. The petitioner has also challenged the notice dated 04.03.2022 issued under Section 144 of NFAC for framing an ex-parte assessment of Writ petitioner for A.Y. 2016-17.
The petitioner has also challenged the notice issued under Section 148 as the same was not served within the prescribed time.
The petitioner has also challenged the action of the respondents on the ground that he has not been given a physical hearing which is in violation of Section 136 of the Act.
Conclusion- The petitioner has neither filed his ITR for AY 2016-17 under Section 139(1) of the Act nor filed his ITR under Section 148 of the Act. As per Section 139(1) of the Act, it is mandatory to file the ITR for an individual if his total income during the previous year exceeds maximum amount which is not chargeable to income tax. Therefore, as per Explanation 2(a) of Section 147 of the Act, there is a deemed escapement of Income by the Petitioner.
A bare perusal of this provision, it amply clear that Section 139 A (5) (d) provides that it is the responsibility of the assessee to intimate the A.O. with respect to any change in his address or in the name and nature of his business on the basis of which the Permanent Account Number was allotted.
When a statutory forum is created by law for redressal of grievances, a Writ Petition should not be entertained ignoring the statutory dispensation. The Income Tax Act, 1961 provides complete machinery for the assessment/ reassessment of tax, imposition of penalty and for obtaining relief with respect to an improper order. One ought to not abandon this machinery and invoke the jurisdiction of the High Court u/A 226 of the Constitution when adequate remedy is available to him by way of appeal as has been held in CIT vs Chhabil Dass Agarwal (2013) 357 ITR 357 (SC).
We consider that in the writ jurisdiction this Court cannot enter into the arena of examination of factual-matrix. The Court can interfere in the writ jurisdiction only if there is a violation of principle of natural justice or the action of the respondent is ex-facie illegal and suffers from perversity.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present writ petition under Article 226/227 has been filed by Sh. S. K. Srivastava (retired) seeking the following reliefs:
(i) To set aside and quash the Notice dated 27.03.2021 alleged to have been issued to Writ Petitioner under Section 148 of Income Tax Act, 1961 (hereinafter referred as ‘Act’) for assessment year (A.Y.) 2016-17 for reassessment of alleged Salary Income of A.Y. 2016-17;
(ii) To quash and set aside Notices under Section 142(1) for reassessment of A.Y. 2016-17, Orders dated 09.02.2022 and Notices dated 04.03.2022 under Section 142 (1) and under Section 144 of the Act for (A.Y.) 2016-17 of the National Faceless Assessment Centre (hereinafter referred as NFAC) for A.Y. 2016-17 for ex-parte assessment of writ petitioner.
Factual Background:-
2. The petitioner has invoked the writ jurisdiction of this Court to quash and set aside the notice dated 27.03.2021 issued under Section 148 of the Act for A.Y. 2016-17 and further notice issued under Section 142(1) of the Act for A.Y. 2016-17 and the order dated 09.02.2022 disposing of objections of National Faceless Assessment Centre. The petitioner has also challenged the notice dated 04.03.2022 issued under Section 144 of NFAC for framing an ex-parte assessment of Writ petitioner for A.Y. 2016-17. The petitioner has submitted that the petitioner did not have any income, as defined under Section 4 and therefore was not obliged to file return under Section 139 (1). It has been further submitted that the Principle (CIT) (Delhi) had no jurisdiction over the address at Faridabad which is in the State of Haryana, on which notice under Section 148 was issued.
3. The petitioner has also challenged the notice issued under Section 148 as the same was not served within the prescribed time. It is further submitted that NFAC is only an administrative formation and not an Income Tax Authority as defined under Section 116 of the Act and nor is it included in the definition of the Assessing Officer (A.O.) as defined under Section 2(7A) to exercise the powers of framing an assessment. The petitioner has submitted that the action of the respondents is in violation of Article 265 of the Constitution of India.
4. The petitioner has also challenged the action of the respondents on the ground that he has not been given a physical hearing which is in violation of Section 136 of the Act as has been made mandatory by the law laid down in “Sabh Infrastructure Pvt. Ltd. Vs. ACIT‘ and Tata Capital Financial Ltd. Vs. ACIT, Circle 1 (3)(1) &Ors.”.
Submissions made on behalf of the Petitioner:-
5. The plea of the petitioner is that notice dated 27.03.2021 was issued on an address at Faridabad, with which the petitioner has no concern and the notice was neither sent through e-mail nor by text message. The petitioner came to know of the notice for the first time on 24.12.2021 when the text message was sent by the A.O. to the wife of the petitioner, which she then forwarded to the petitioner.
6. The petitioner has stated that notice under Section 148 was bad in law for want of territorial jurisdiction. Therefore, he moved representation under Section 124 (2) of the Income Tax Act dated 05.01.2022 for adjudication of issue by Central Board of Direct Taxes (CBDT). However, the representation has yet not been decided and is pending consideration before the CBDT.
7. The petitioner stated that A.O. ignoring the basic principle that every “receipt” is not “income” nor every “income” is a “receipt”, assessed the salary income of the petitioner in the relevant assessment year as Rs. 53,21,021/-. The issue of territorial jurisdiction was also not addressed in violation of the CBDT Circular of 2014. The plea of the petitioner is that in fact in the relevant year, he was not paid any pay and allowances by the authorities. Aggrieved by this, the petitioner filed an O.A. No. 2094 of 2014 which was allowed by the Central Administrative Tribunal (CAT) by an order dated 29.04.2015 directing the respondents to pay the payments and allowances of the petitioner including the arrears thereof with interest at the rate of 12%. The department challenged this order before this Court by filing W.P.(C) No. 6768 of 2015. This Court directed release of the amount due to the petitioner. However, the respondents offered only half of the amount due. This Court vide order dated 12.10.2015, directed that in case amount offered was accepted by the petitioner that would be without prejudice to the rights and contentions of both the parties. The petitioner stated that the amount of Rs.53,21,021/-is a disputed amount and remains so during the pendency of the aforesaid W.P.( C) No.6768 of 2015. The petitioner accepted this amount as an “advance” that would have to be returned to the respondents by the petitioner in case this Court decides the case against the petitioner. Therefore, this amount cannot be assessed as “income” and would remain as an Advance & is a liability in the hands of the petitioner.
8. The petitioner stated that the action of the respondent Nos. 4 and 5 are motivated on account of various litigations pending before Special Judge, CBI, Ghaziabad, High Court of Allahabad and Supreme Court.
9. The petitioner has stated that notice under Section 144 of the Act was issued on 04.03.2022 for ex parte assessment wherein respondent nos. 4 & 5 falsely stated that the petitioner was heard by the A.O. whereas, no such hearing had taken place. The petitioner stated that merely posting of a notice under Section 148 of the Act dated 27.03.2021 on the Income Tax portal would not amount to service upon the petitioner in view of Section 282 of the Act.
10. The petitioner has further stated that the notice under Section 148 was also time barred as for the A.Y. 2016-17, the notice should have been served only up to 31.03.2021, as the limitation date is within 4 years from the end of the assessment year from which notice was issued. As per the petitioner, since the notice was served on 24.12.2021 therefore, it is an invalid notice and is liable to be quashed.
11. The petitioner stated that as income tax authority is deemed to be a Civil Court under Section 136 of the Act therefore, the petitioner should have been given an opportunity of leading oral evidence to support/substantiate its case.
12. The petitioner argued in person and submitted that the respondents have acted illegally and malafidely in violation of Constitution of India and the various provisions of the Act. The petitioner stated that in fact notice dated 27.03.2021 was never sent to him and he was informed of the said notice only on 24.12.2021 through a SMS to his wife. The petitioner stated that immediately after receipt of such information, the petitioner sent a communication dated 27.12.2021 to Sh. Rajat Bansal, IRS, Principal CCIT, Income Tax Department, Delhi objecting to the notice and mode of its service. The petitioner has also taken objection that the A.O. of Circle – 67 (1), Delhi did not have jurisdiction to issue the subject notice as the Principal, CCIT, Delhi did not have jurisdiction over Haryana. The petitioner stated that the said notice being illegal and invalid should be withdrawn.
13. The petitioner stated that as per the details in PAN Card No. ACXPS3661A his residence address was 6453, Pocket -6, Basant Kunj, Delhi and office address was Assistant Commissioner of Income Tax, CGO Complex, NH IV, Faridabad, Haryana -121001. He stated that the date of allotment of his PAN Card was 23.12.1998 and at that time, he was posted in Faridabad. However, thereafter, he was transferred to Rohtak and subsequently, to Delhi. The petitioner stated that at the relevant time i.e. 27.03.2021, he was not posted at Faridabad and thus had no concern with the address given in the notice under Section 148 of the Act. The petitioner further stated that he had given an application for change of address and on his application, the address on the PAN Card must have been changed.
14. The petitioner also invited our attention to the communication dated 10.02.2022. He stated that as per this document, his objections were dismissed vide order dated 09.02.2022. It is stated that forgery has been committed by the department as an order cannot be of two dates i.e. of 09.02.2022 and 10.02.2022. The attention was also invited to Para- 5 of the said order whereby the date of the notice under Section 148 has been written as 27.01.2021 and stated that in fact this entire order is a forged and fabricated document. The petitioner also stated that in the assessment order dated 25.03.2022, it has falsely been stated that notice under Section 148 of the Act issued on 27.03.2021 was duly served upon him through Speed Post ED525117940IN dated 31.03.2022. The petitioner stated that he had received the information through RTI that no such consignment details were available.
15. The petitioner invited our attention to Article 265 of the Constitution of India which provides that no tax can be levied or collected except by authority of law. The petitioner stated that NFAC has no authority of law to collect tax therein. The petitioner has further invited our attention to Section 4 of the Act which provides that income tax can be charged only in respect of income of the previous year of every person. Further attention has been invited to definition of “income” as given in Section 5 of the Act which provides that income shall include that income which is either “receipt” or has “accrued” or “arisen”. It has been submitted that in the relevant assessment year, there was no income which has accrued, arisen or received. The petitioner has also invited our attention to Sections 120 and 124 of the Act which defines jurisdiction of income tax authorities and jurisdiction of Assessing Officers. The petitioner stated that as notice under Section 148 was issued without any jurisdiction, he had moved a representation under Section 124 (2) before the competent authority which has yet not been decided. The petitioner also relied upon Section 139 (1) to state that he had no obligations to file the return as there was no income liable to be assessed in the relevant year. The petitioner has invited our attention to the notification dated 28.12.2021, issued by Ministry of Finance, Central Board of Direct Taxes. It has been submitted that in this notification, power of AO has not been conferred. It has been stated that merely in Clause 2 (XVII) of Notification dated 28.12.2021, NFAC has been stated to have been set up and notified under Section 144 B of the Act. The petitioner stated that the act and conduct of the respondents issuing notice dated 27.03.2021 under Section 148are illegal and, thus, the notice and all further actions be quashed and set aside.
16. The petitioner in the compilation filed by him has relied upon following judgments:-
