Cwjc/16228/2024 Of Takshila Educational Society v. The Assessment Unit, Income Tax Department, National Faceless Assessment Centre, New Delhi

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.16228 of 2024 ====================================================== Takshila Educational Society, Priyadarshi Nagar, West Bailey Road, Patna-801503 through its Administrative Officer, Gopichandra Prasad, aged about85 years, Male, Son of Late Ram Khelawan Prasad, Permanent resident of JayPrakash Lane (Machhali Gali), New Jakkanpur, Phulwari, Patna- 800001,P.O.- G.P.O, P.S.- Jakkanpur, District - Patna. ... ... Petitioner Versus The Assessment Unit, Income Tax Department, National Faceless AssessmentCentre, New Delhi. ... ... Respondent ======================================================Appearance :For the Petitioner/s: Ms. Shilpi Keshri, Advocate Ms. Smriti Singh, Advocate Mrs. Kalpana Rastogi, AdvocateFor the Respondent/s: Mrs. Archana Sinha @ Archana Shahi,Sr.Advocate Mr. Alok Kumar, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD and HONOURABLE MR. JUSTICE RAMESH CHAND MALVIYAORAL JUDGMENT(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) Date : 21-01-2025 Heard learned counsel for the petitioner and learnedSenior counsel for the Income Tax Department. 2. This application has been filed seeking the followingreliefs:- “(i) For issuance of a writ of certiorari or any otherappropriate writ(s), order(s) or direction(s) quashing theorder imposing penalty dated 27.09.2024 (“Impugnedorder”) passed by the Respondent under Section 270A ofthe Income Tax Act, 1961 (“the Act”) by overreaching theJudgment of this Hon’ble Court in CWJC No. 6380 of2024 dated 22.04.2024 whereby the Hon’ble Court hasdirected exclusion of the period 10.04.2024 to 22.04.2024while filing appeal before the Appellate Authority and in passing the order in contravention to the Rule of Principlesof Natural Justice and without allowing opportunity ofpersonal hearing as required under Section 274 andimposing penalty under Section 270A of the Act duringpendency of appeal in contravention to Section 275(1)(a)of the Act and raising ex facie perverse demand against thepetitioner for the Assessment Year (“Α.Υ.”) 2022-23 byerroneously holding that there is a delay of four days infiling of appeal and that admission/ validity of appeal isunascertainable that too during the pendency of a legal andvalid appeal. (ii) For issuance of a writ of certiorari or any otherappropriate writ(s), order(s) or direction(s) quashing theconsequential penalty demand of Rs.33.93 crorescommunicated vide Demand Notice dated 27.09.2024issued by the Respondent. (iii) For granting any other relief(s) to which the petitioneris otherwise found entitled for.”is otherwise found entitled for.” 3. Learned counsel for the petitioner submits that for the Assessment Year 2022-23, the petitioner had filed its return ofincome, declaring a total income at Rs. 1,57,734/-. The case of thepetitioner was selected for scrutiny under Section 143(3) of theIncome Tax Act, read with Section 144(B). An order of assessmentdetermining the income at Rs. 39,77,63,265/- was passed by theassessing authority. The said order of assessment was a subjectmatter of appeal before the appellate authority. Prior to filing ofthe appeal, the petitioner had approached this Court in CWJC No.6380 of 2024 which was disposed of vide order dated 22.04.2024granting liberty to the petitioner to approach the appellate authority and at the same time, the appellate authority was directedthat the period between 10.04.2024 to 22.04.2024, during whichthe writ was pending in this Court, is to be excluded whilereckoning the delay in filing the appeal. authority and at the same time, the appellate authority was directedthat the period between 10.04.2024 to 22.04.2024, during whichthe writ was pending in this Court, is to be excluded whilereckoning the delay in filing the appeal. 4. Learned counsel submits that on filing of an appeal bythe petitioner before the appellate authority, the appellate authorityhas condoned the delay in filing of the appeal and issued noticedated 01.05.2024. After issuance of notice by the appellateauthority in the appeal, the respondent issued a show-cause noticeunder Section 270A of the Income Tax Act, 1961 (hereinafterreferred to as the ‘Act of 1961’) on 14.05.2024 requiringcompliance by 28.05.2024. 5. The petitioner submitted its reply in compliance of thesaid show-cause notice. It was brought to the notice of therespondent that the appeal against the assessment order waspending before the Commissioner of Income Tax, (Appeals),National Faceless Appeal Centre (in short ‘NFAC’). Prayer wasmade to keep the penalty proceeding in abeyance till disposal ofthe appeal but to the utter dismay of the petitioner, respondentauthority passed an order under Section 270A of the Act of 1961on 27.09.2024 imposing a penalty of Rs. 33.93 crores and issued ademand notice on the same date. The order under Section 270A of the Act of 1961 and the demand notice have been annexed with thewrit application as Annexure ‘P1’ and ‘P2’ respectively. Thepetitioner has assailed Annexure ‘P1’ and ‘P2’ on various groundsincluding that of violation of principles of natural justice. It issubmitted that in all fairness, equity and justice, the penaltyproceedings should have awaited the outcome of the appeal whichhad already been entertained and the appellate authority was inseisin of the matter. 6. Learned counsel further submits that on a bare perusalof Annexure ‘P1’ it would appear that the respondent authority ofthe Assessment Unit while considering the show-cause of thepetitioner in the penalty proceeding went into the delay aspect ofthe appeal which was pending before the appellate authority. Itwould have been fair on the part of the authority dealing with thepenalty proceeding to refrain itself from going into the issue ofdelay in filing of the appeal. In the process, the order of the HighCourt passed in CWJC No. 6380 of 2024 has been completely lostsight of. 7. Mrs. Archana Sinha, learned Senior counselrepresenting the Department, submits that in course of the penaltyproceeding, the competent authority was not informed that theappeal preferred by this petitioner before the appellate authority has been entertained and notice has been issued after condonationof delay. Had this been brought to the notice of the competentauthority, who was in seisin of the penalty proceeding, that wouldhave been definitely considered and an appropriate view wouldhave been taken. 8. Be that as it may, learned Senior counsel for theDepartment submits that in view of the pleadings available on therecord, a fresh view is required to be taken by the AssessmentUnit, therefore the impugned order dated 27.09.2024 as containedin Annexure ‘P1’ and the demand notice vide Annexure ‘P2’ maybe set aside without going into the merit of the contentions and thematter be remitted to the competent authority in the AssessmentUnit to take an appropriate view. 9. Having regard to the aforementioned submissions onbehalf of the petitioner as well as the Department, we set aside theOrder under Section 270A of the Act of 1961 (Annexure ‘P1’) andthe notice of demand under Section 156 of the Act of 1961(Annexure ‘P2’). The matter is remitted to the NationalAssessment Unit, NFAC for passing a fresh order. 10. At this stage, learned counsel for the petitionerinvites our attention towards Section 274 of the Act of 1961 tosubmit that the said Section mandates that no order imposing a 9. Having regard to the aforementioned submissions onbehalf of the petitioner as well as the Department, we set aside theOrder under Section 270A of the Act of 1961 (Annexure ‘P1’) andthe notice of demand under Section 156 of the Act of 1961(Annexure ‘P2’). The matter is remitted to the NationalAssessment Unit, NFAC for passing a fresh order. 10. At this stage, learned counsel for the petitionerinvites our attention towards Section 274 of the Act of 1961 tosubmit that the said Section mandates that no order imposing a penalty under this chapter shall be made unless the assessee hasbeen heard or has been given a reasonable opportunity of beingheard. 11. Learned Senior counsel for the Department does notdispute that in terms of Section 274 of the Act of 1961, thepetitioner shall get an opportunity of hearing through facelessfacility before the competent authority. 12. This Court understands that the Department will takeappropriate steps to comply with the mandate of law as containedin Section 274 of the Act of 1961. The petitioner is at liberty toapproach the Department seeking hearing through the facelessfacility. 13. This writ application is allowed to the extentindicated hereinabove. (Rajeev Ranjan Prasad, J) Rishi/- (Ramesh Chand Malviya, J) AFR/NAFRCAV DATEUploading Date22.01.2025Transmission Date