By Advs. Sri v. P. Narayanan Sri. Alan Priyadarshi Dev

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 5 DAY OF DECEMBER 2023 / 14TH AGRAHAYANA, 1945 WP(C) NO. 37467 OF 2022 PETITIONER: PUTHUKAI VAYANINGAD VAIRAJATHAN EASWARANTE KSHETHRA COMMITTEE, BANGALAM, PUTHUKAI, NILEWAR, KASARAGOD 671 314, REPRESENTED BY ITS FORMER TREASURER SRI.C.V.KRISHNAN., AGED 73 YEARS. BY ADVS. SRI. V. P. NARAYANAN SRI. ALAN PRIYADARSHI DEV RESPONDENTS: THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON05.12.2023, ALONG WITH WP(C).15844/2022, THE COURT ON THE SAME DAYDELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY,THE 5 DAY OF DECEMBER 2023 / 14TH AGRAHAYANA, 1945 WP(C) NO. 15844 OF 2022 PETITIONER: PUTHUKAI VAYANINGAD VAIRAJATHAN EASWARANTE KSHETHRA COMMITTEE, BANGALAM, PUTHUKAI P. O., NILESWAR, KASARAGOD-671314, REPRESENTED BY ITS FORMER TREASURER, SRI. C. V. KRISHNAN. BY ADVS. SRI. T. M. SREEDHARAN (SR.) SRI. V. P. NARAYANAN SRI. ALAN PRIYADARSHI DEV RESPONDENTS: 1THE INCOME TAX OFFICER,WARD -1 & TPS, AAYAKAR BHAVAN, VIDYANAGAR, KASARAGOD-671 123. 2THE PRINCIPAL COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001.AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001. 3THE COMMISSIONER OF INCOME TAX (APPEALS),AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001.AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001. 4INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH, 1ST FLOOR, (BLOCK C-1 & C-II), KENDRIYA BHAVAN, OPP .CSEZ, KAKKANAD, COCHIN-682 037, REP BY ITS ASSISTANT REGISTRAR.COCHIN BENCH, 1ST FLOOR, (BLOCK C-1 & C-II), KENDRIYA BHAVAN, OPP .CSEZ, KAKKANAD, COCHIN-682 037, REP BY ITS ASSISTANT REGISTRAR. BY ADVS. SRI. P. G. JAYASHANKAR PGJ SMT. KEERTHIVAS GIRI SRI. CHRISTOPHER ABRAHAM – SC - INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSIONON 05.12.2023, ALONG WITH WP(C).37467/2022, THE COURT ON THESAME DAY DELIVERED THE FOLLOWING: DINESH KUMAR SINGH, J. -------------------------- W.P.(C) Nos.37467 & 15844 of 2022 ------------------------- Dated this the 5[th] day of December, 2023 JUDGMENT 1. Heard Ms. Divya Raveendran, learned Counsel for the petitioner and Mr. Christopher Abraham, learned Senior StandingCounsel for the the Income Tax Department. 2.These writ petitions has been filed impugning Exhibit P-3assessment order dated 31.03.2022 and the penalty orders underSections 271 (1) (c) and 271 (1) (b) of the Income Tax Act, 1961dated 22.09.2022 and 20.09.2022 respectively. These orders havebeen passed after the matter was remanded back by the Income TaxAppellate Tribunal, Cochin Bench, Cochin vide Exhibit P-2 Orderdated 07.10.2020. The Tribunal in paragraph 5 of the said Orderdated 07.10.2022 noticed the fact that the Treasurer of thepetitioner Sri. C. V. Krishnan was in judicial custody and therefore,no effective representation could be made which requiredassistance of Chattered Accountant. It was also noticed that theBooks of Accounts were available only with Sri. C. V. Krishnan whowas in judicial custody. Noticing the violation of the principles of natural justice, the case was restored to the file of the AssessingOfficer for re-adjudication after granting the assessee an adequateand effective opportunity of hearing. On remand also, the noticewas served when Sri. C. V. Krishnan was in judicial custody and wasin Jail. He sought for time for filing the reply to the notice underSection 142 (1) of the Income Tax Act. But since the last date forfinalising the assessment proceedings was expiring on 31.03.2021,without granting extension of time, the assessment order came tobe passed under Section 144 read with Section 254 of the IncomeTax Act, 1961 and the tax was assessed at Rs. 3,20,665/- withdirection to initiate the penalty proceedings under Section 271B,271 (1) (b) and 271 (1) (c) of the Act. 3.The factors and grounds which were taken note of by theIncome Tax Appellate Tribunal in its Order dated 07.10.2020 werepresent when the present impugned assessment order and penaltyorders came to be passed. I am of the considered view that thepetitioner was not afforded with adequate and effectiveopportunity of being heard as directed by the Tribunal and there hasbeen a violation of the principles of natural justice in finalising theassessment and penalty orders impugned in these writ petitions. 4.Considering the aforesaid facts, these writ petitions areallowed and the impugned assessment and penalty orders are setaside and the matter is remanded back to the Assessing Authority topass fresh order after considering the reply to be filed by theassessee and documents produced. The petitioner is granted threeweeks time from today to file reply to the notices under Section 142(1) and produce all the evidence and records for examination beforethe Assessing Authority. The petitioner should be afforded anopportunity of hearing by the Assessing Authority before finalisingthe assessment order. It is made clear that no further opportunityshall be granted to the petitioner for filing the reply to the noticeunder Section 142 (1) or producing the evidence and documents. Itis also made clear that only one opportunity of being heard shall begranted by the Assessing Officer to the petitioner before finalisingthe assessment order. With the aforesaid directions, these writ petitions are herebyallowed. Sd/-DINESH KUMAR SINGH JUDGE APPENDIX OF WP(C) 37467/2022 PETITIONER’S EXHIBITS APPENDIX OF WP(C) 15844/2022 PETITIONER’S EXHIBITS EXHIBIT P1TRUE COPY OF THE ASSESSMENT ORDER DATED16.01.2008 U/S 144 PASSED BY THE 1STRESPONDENT16.01.2008 U/S 144 PASSED BY THE 1STRESPONDENT EXHIBIT P2TRUE COPY OF THE ORDER DATED 7.10.2020 PASSEDBY THE 4TH RESPONDENT IN ITA NO.459/COCH/2019BY THE 4TH RESPONDENT IN ITA NO.459/COCH/2019 EXHIBIT P3TRUE COPY OF THE ASSESSMENT ORDER DATED31.03.2022 FOR THE ASSESSMENT YEAR 2006-07U/S. 144 R.W.S. 254 BY THE 1ST RESPONDENT31.03.2022 FOR THE ASSESSMENT YEAR 2006-07U/S. 144 R.W.S. 254 BY THE 1ST RESPONDENT EXHIBIT P4TRUE COPY OF THE JUDGMENT IN T.C.N MENON VSINCOME TAX OFFICER, REPORTED IN (1974) 96 ITR0148INCOME TAX OFFICER, REPORTED IN (1974) 96 ITR0148 EXHIBIT P5TRUE COPY OF THE JUDGMENT IN COMMISSIONER OFSALES TAX. VS. H.M.ESUFALI H.M.ABDUALALIREPORTED IN (1973) AIR 2266SALES TAX. VS. H.M.ESUFALI H.M.ABDUALALIREPORTED IN (1973) AIR 2266 EXHIBIT P6TRUE COPY OF THE JUDGMENT IN DHAKESWARICOTTON MILLS LTD. VS. COMMISSIONER OF INCOMETAX REPORTED IN (1954) 26 ITR 0775COTTON MILLS LTD. VS. COMMISSIONER OF INCOMETAX REPORTED IN (1954) 26 ITR 0775 EXHIBIT P7TRUE COPY OF THE JUDGMENT IN BRIJI BHUSHANLAL PARDUMAN KUMAR.V.S. COMMISSIONER OFINCOME TAX, REPORTED IN (1978) 115 ITR 0524LAL PARDUMAN KUMAR.V.S. COMMISSIONER OFINCOME TAX, REPORTED IN (1978) 115 ITR 0524