Cwjc/16697/2022 Of Shree Shakambhari Udyog Partnership Firm v. Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.7244 of 2022 ====================================================== Shree Shakambhari Udyog Partnership Firm having its Office at PrakashMarket Chowk, Patna City, Patna through its Partner Rajesh Bagla (MaleAged about 54 Years Son of Ram Gopal Bagla, resident of Flat No. 501,Durga Apartment, Mirchai Gali Chowk, Near Bank of Baroda, Patna City,Patna-800008. ... ... Petitioner Versus 1.Commissioner of Income Tax having its Office at Central Revenue Building,Patna.Patna. 2.Dy. Commissioner/Asst. Commissioner Central Circle 1, Patna. ... ... Respondents ====================================================== with Civil Writ Jurisdiction Case No. 16693 of 2022 ====================================================== Shree Shakambhari Udyog partnership firm having its office at PrakashMarket Chowk, Patna City, Patna through its Partner Rajesh Bagla (Male)aged about 54 years, son of Ram Gopal Bagla, resident of Flat No. 501, DurgaApartment, Mirchai Gali Chowk, near Bank of Baroda, Patna City, Patna-800008. ... ... Petitioner Versus 1.Commissioner of Income Tax having its office at Central Revenue Building,Patna.Patna. 2.Dy. Commissioner/Asst. Commissioner Central Circle 1, Patna. ... ... Respondents ====================================================== with Civil Writ Jurisdiction Case No. 16697 of 2022 ====================================================== Shree Shakambhari Udyog partnership firm having its Office at PrakashMarket Chowk, Patna City, Patna through its Partner Rajesh Bagla (Male)aged about 54 years son of Ram Gopal Bagla, resident of Flat No. 501, DurgaApartment, Mirchai Gali Chowk, Near Bank of Baroda, Patna City, Patna -800008. ... ... Petitioner Versus 1.Commissioner of Income Tax having its office at Central Revenue Building,Patna.Patna. 2.Dy. Commissioner/Asst. Commissioner of Income Tax Central Circle 1,Patna.Patna. ... ... Respondents ====================================================== with Civil Writ Jurisdiction Case No. 17742 of 2022 ====================================================== Shree Shakambhari Udyog partnership firm having its office at PrakashMarket Chowk, Patna City, Patna through its Partner Rajesh Bagla (Male)aged about 54 years son of Ram Gopal Bagla, resident of Flat No. 501, DurgaApartment, Mirchai Gali Chowk, Near Bank of Baroda, Patna City, Patna-800008. ... ... PetitionerVersus 1.Commissioner of Income Tax having its office at Central Revenue Building,Patna.Patna. 2.Dy. Commissioner/ Asst. Commissioner Central Circle 1, Patna. ... ... Respondents ====================================================== ====================================================== CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD and HONOURABLE MR. JUSTICE SHAILENDRA SINGHCAV JUDGMENT(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) Date : 25-04-2025 Heard Mr. D.V. Pathy, learned Senior Counsel for thepetitioner and Ms. Archana Sinha, learned Senior Counsel for therespondents. 2. These four writ applications have been taken up forconsideration together on the request of learned counsel for theparties and are being disposed of by this common judgment. CWJC No. 16697 of 2023 3. This writ application has been preferred seeking thefollowing reliefs:- “i) the notice dated 31.03.2021 (as contained inAnnexure – 2) issued by the respondent no. 2 underSection 148 of the Income Tax Act, 1961 for theAssessment Year 2017-18 be quashed. CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD and HONOURABLE MR. JUSTICE SHAILENDRA SINGHCAV JUDGMENT(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) Date : 25-04-2025 Heard Mr. D.V. Pathy, learned Senior Counsel for thepetitioner and Ms. Archana Sinha, learned Senior Counsel for therespondents. 2. These four writ applications have been taken up forconsideration together on the request of learned counsel for theparties and are being disposed of by this common judgment. CWJC No. 16697 of 2023 3. This writ application has been preferred seeking thefollowing reliefs:- “i) the notice dated 31.03.2021 (as contained inAnnexure – 2) issued by the respondent no. 2 underSection 148 of the Income Tax Act, 1961 for theAssessment Year 2017-18 be quashed. ii) the order dated 31.03.2022 (as contained inAnnexure – 15 series) passed by the respondent no. 2under Section 148 of the Income Tax Act, 1961 forthe Assessment Year 2017 – 18 ex parte to the best ofhis judgement without allowing an opportunity tocross examine the witness; manually passing theorder without mention of Document IdentificationNumber (DIN) to be mandatorily mentioned in theassessment order in terms of the Circular No.19/2019 dated 14.08.2022 issued by the CentralBoard of Direct Taxes; without digitally signing the order in terms of e assessment procedure notified byCentral Board of Direct Taxes under Notification No.61/2019 dated 12.09.2022 and also without uploadingthe order on the web portal of the Income TaxDepartment be quashed. iii) the notice of demand dated 31.03.2022 (ascontained in Annexure – 15 series) issued by therespondent no. 2 for the Assessment Year 2017 – 18be quashed. iv) for granting any other relief (s) to which thepetitioner is otherwise found entitled to.” CWJC No. 7244 of 2022 4. In this writ application, the petitioner has prayed for an identical relief, however, for the sake of convenience the reliefsprayed in this writ application are being reproduced hereunder fora ready reference:- “i) the notice dated 31.03.2021 (as contained inAnnexure – 2) issued by the respondent no. 2 underSection 148 of the Income Tax Act, 1961 for theAssessment Year 2016–17 be quashed. ii) the order dated 22.03.2022 (as contained inAnnexure – 10 series) passed by the respondent no. 2under Section 148 of the Income Tax Act, 1961 forthe Assessment Year 2016 – 17 ex parte to the best ofhis judgment without grant of a copy of thecomplaint, materials on the basis of which theassessment was sought to be reopened and also without allowing an opportunity to cross examine thewitness be quashed. iii) the notice of demand (as contained inAnnexure – 10 series) issued by the respondent no. 2for the Assessment Year 2016 – 17 be quashed. (iv) for granting any other relief(s) to which thepetitioner is otherwise found entitled to.” CWJC No. 16693 of 2022 & CWJC No. 17742 of 2022 5. This two writ applications have been preferred forsetting aside the order(s) passed by respondent no. 2 imposingpenalty under Section 270A/271(1)(c) of the Income Tax Act,1961 for the assessment year 2016-17 and the assessment year2017-18 respectively. In these two writ applications, the grievanceof the petitioner is that the impugned order dated 29.09.2022 hasbeen passed by respondent no. 2 without consideration of thedetailed written submission and also without recording reasonssolely on the basis of an ex parte order of assessment passed inderogation of binding Circular No. 19/2019 dated 14.08.2019andthe Notification No. 61/2019 dated 12.09.2019. 6. It is the common contention of learned counsel for the parties that the fate of these two writ applications would dependupon the outcome of the first two writ applications i.e. CWJC No.16697 of 2022 and CWJC No. 7244 of 2022. For the purpose of reference hereunder, we will take the records of the lead case beingCWJC No. 16697 of 2022. Submissions on behalf of the Petitioners 6. It is the common contention of learned counsel for the parties that the fate of these two writ applications would dependupon the outcome of the first two writ applications i.e. CWJC No.16697 of 2022 and CWJC No. 7244 of 2022. For the purpose of reference hereunder, we will take the records of the lead case beingCWJC No. 16697 of 2022. Submissions on behalf of the Petitioners 7. Mr. D.V. Pathy, learned Senior Counsel submits thatin the present case the Assessing Officer has acted in completedefiance of the Notification No. 61 of 2019 issued by the CentralBoard of Direct Taxes (in short ‘CBDT’) on 12[th] September, 2019,a copy of which has been enclosed as Annexure ‘16’ to the writapplication. It is pointed out that the CBDT has notified IncomeTax E-Assessment Scheme, 2019. It has been issued in exercise ofpowers conferred under sub-Section (3A) of Section 143 of theIncome Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’)by the Central Government, therefore, it is a statutory scheme.Paragraph ‘2’ of the scheme contains the definitions of the variouswords. Clause (xi) under paragraph ‘2’ defines “digital signature”.It has the same meaning as assigned to it in clause (p) of sub-Section (1) of Section 2 of the Information Technology Act, 2000(hereinafter referred to as ‘the Act of 2000’). 8. Paragraph ‘3’ of the scheme lays down the scope ofthe scheme and paragraph ‘9’ of the scheme talks ofauthentication of electronic record. According to this provision, forpurpose of this scheme an electronic record shall be authenticated by the originator by affixing his digital signature in accordancewith the provisions of sub-Section (2) of Section 3 of the Act of2000. Proviso to paragraph ‘9’ says that in case of the originator,being the assessee or any other person, such authentication mayalso be done by electronic signature or by electronic authenticationtechnique in accordance with the provision of sub-Section (2) ofSection 3A of the said Act. It is pointed out that the E-proceedingscheme makes it mandatory that every notice or order or any otherelectronic communication under the scheme was to be delivered tothe addressee. 9. Learned Senior Counsel has further brought to thenotice of this Court the Circular No. 19 of 2019 (Annexure ‘17’).Paragraph ‘2’ thereof has been relied upon to submit that in orderto prevent manual issuance of any notice, order, summons, letterand any correspondences without maintaining a proper audit trailof such communication it has been decided that nocommunication shall be issued by any Income Tax authorityrelating to assessments, appeals, orders, statutory or otherwise,exemptions, enquiry, investigation, verification of information,penalty, prosecution, rectification, approval etc. to the assessee orany other person, on or after the 1[st] day of October, 2019 unless acomputer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of the suchcommunication. It is submitted that under paragraph ‘3’ of theCircular No. 19/2019, some exceptional circumstances have beenlaid down by way of exception and only in such cases, thecommunication may be issued manually but only after recordingreasons in writing in the file and prior written approval of theChief Commissioner/Director General of Income Tax. been allotted and is duly quoted in the body of the suchcommunication. It is submitted that under paragraph ‘3’ of theCircular No. 19/2019, some exceptional circumstances have beenlaid down by way of exception and only in such cases, thecommunication may be issued manually but only after recordingreasons in writing in the file and prior written approval of theChief Commissioner/Director General of Income Tax. 10. In the aforementioned background of Annexure ‘16’and Annexure ‘17’ to the writ application, learned Senior Counselfor the petitioner has submitted that in this case, respondent no. 2issued a notice under Section 148 of the Act of 1961 for theassessment year 2017-18. The said notice has been signedmanually. The petitioner filed a return under Section 148 of theAct of 1961 on 09.01.2022. The respondent no. 2 issued anothernotice dated 08.03.2022 under Section 143(2) read with Section147 of the Act of 1961 for the assessment year 2017-18 and issuedletter dated 11.03.2022 for the assessment year 2017-18.Respondent no. 2 further issued a show cause notice dated20.03.2022 and all these correspondences have been mademanually. Learned Senior Counsel has drawn our attentiontowards the assessment order (Annexure ‘15’) and the notice ofdemand under Section 156 of the Act of 1961 attached therewith to show that these documents have been signed by hand and notdigitally. It is submitted that in view of the scheme and the circularreferred hereinabove, these documents are to be held invalid. 11. Learned Senior Counsel has further submitted that itwould appear from the statements made in the counter affidavitthat there were three partners of the petitioner firm, namely, Smt.Kumud Bagla, Mr. Pradeep Bagla and Mr. Rajesh Bagla. Smt.Kumud Bagla sent a complaint on 22.02.2021 to the Department.As per the said complaint, the petitioner had understated its actualbusiness receipt in order to defraud the revenue during thefinancial year 2015-16 and 2016-17. 12. It is submitted that the petitioner had filed itsoriginal receipt of income for the assessment year 2017-18 on28.08.2018 against the due date of 30.10.2017 as prescribed underSection 139(1) of the Act of 2000. In the said return, total incomeof Rs.1,46,91,120/- was admitted. The return was processed underSection 143(1). It is his submission that the petitioner had, onreceipt of the notice under Section 142(1)of the Act of 1961submitted a written submission stating therein that on receipt ofthe notice, the petitioner has filed its return online and thereafterprayed for supply of reasons recorded in writing which form thebasis of issuance of notice under Section 148 of the Act of 1961. The petitioner was provided show cause of theinformation/complaint received from one of the partners. It was hiscontention that he has maintained proper books of accounts asmandated under the Act of 1961. Referring to the complaint, hesubmitted that the complainant has indulged in making false andbaseless allegations. She had approached the Hon’ble High Courtfor appointment of a sole Arbitrator and when Hon’ble Mr. JusticeRamesh Kumar Dutta (retired) was appointed as a sole Arbitrator,he has noted the conduct of the complainant in one of his orderdated 22.11.2019. The petitioner claimed that he was unable tocomprehend the basis of the complaint made. It was contendedthat the complaint was malicious and it does not bring on recordany corroborative material to prove the transactions having beencarried out by the petitioner. 13. Learned Senior Counsel for the petitioner submitsthat the complaint contained a hand written volume of certaintransactions and unless the complainant is allowed to be cross-examined on the point of her allegations, it would not have beenappropriate for the Assessing Authority to rely upon the complaintwhile passing the assessment order. Learned Senior Counsel hasrelied upon the judgment of the Hon’ble Supreme Court in thecase of Andaman Timber Industries versus Commissioner of 13. Learned Senior Counsel for the petitioner submitsthat the complaint contained a hand written volume of certaintransactions and unless the complainant is allowed to be cross-examined on the point of her allegations, it would not have beenappropriate for the Assessing Authority to rely upon the complaintwhile passing the assessment order. Learned Senior Counsel hasrelied upon the judgment of the Hon’ble Supreme Court in thecase of Andaman Timber Industries versus Commissioner of Central Excise, Kolkata-II reported in (2016) 15 SCC 785,(paragraph ‘6’) wherein it has been held that not allowing theassessee to cross-examine the witnesses by the AdjudicatingAuthority though the statements of those witnesses were made thebasis of the impugned order is a serious flaw which makes theorder a nullity inasmuch as it amounted to violation of theprinciples of natural justice. 14. Learned Senior Counsel, therefore, submits that theimpugned order of assessment has been passed by respondent no.2 in violation of the principles of natural justice, therefore, it willcome within the meaning of jurisdictional error, hence, liable to beinterfered with by this Court under Article 226 of the Constitutionof India. Submissions on behalf of the Department 15. On the other hand, Ms. Archana Sinha, learnedSenior Counsel for the Department has opposed the writapplication firstly on the ground that the petitioner has got analternative equally efficacious remedy of appeal but instead ofavailing his remedy in accordance with law, he has moved thisCourt invoking its extraordinary writ jurisdiction under Article 226of the Constitution of India. Learned Senior Counsel submits thatrecently in Godrej Sara Lee Ltd. versus Excise and Taxation Officer-cum-Assessing Authority and Others reported in 2023SCC OnLine SC 95, the Hon’ble Supreme Court has once againdealt with the issue of alternative remedy and observed that HighCourt should normally not entertain a writ petition. 16. Learned Senior Counsel has placed before this Courtthe communication dated 31.03.2022 which is enclosed with theassessment order (Annexure ‘15’, page 108) of the writapplication. It is pointed out that because of some technical glitch,earlier while uploading the order of assessment and notice ofdemand (Annexure ‘15’), the document could not be digitallysigned and no DIN was provided but after noticing thisdiscrepancy, on the same day, the Assessing Officer issued thiscommunication in which DIN and letter number have been dulymentioned. This communication is digitally signed and is inaccordance with the scheme and circular of the Department. 17. Learned Senior Counsel further submits withreference to the screenshot of the portal of the Income TaxDepartment present at page 109 of the writ application that itprovides for a choice to be marked (tick) by the assessee, if hewants to avail an opportunity of personal hearing. In this case, thepetitioner had not marked (tick) on the portal of the Departmentseeking personal hearing, therefore, it cannot be allowed to be argued by the petitioner that the Department had not given him anopportunity to cross-examine the complainant. 18. It has been further argued that in this case, theAssessing Officer has not recorded statements of the complainant,therefore, it would not be correct to say that the petitioner wasrequired to be given an opportunity to cross-examine thecomplainant. argued by the petitioner that the Department had not given him anopportunity to cross-examine the complainant. 18. It has been further argued that in this case, theAssessing Officer has not recorded statements of the complainant,therefore, it would not be correct to say that the petitioner wasrequired to be given an opportunity to cross-examine thecomplainant. 19. Referring to paragraph ‘6’ of the judgment of theHon’ble Supreme Court in the case of Andaman TimberIndustries (supra), learned Senior Counsel submits that in the saidcase, the order of the Commissioner was found based upon thestatements given by the two witnesses and even when the assesseedisputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunityto the assessee. In the said case, the impugned order passed by theAdjudicating Authority specifically mentioned that such anopportunity was sought by the assessee. It is, therefore, submittedthat the present case is completely distinct and different from thatof Andaman Timber Industries (supra). In such circumstance, itcannot be said that the impugned order of assessment has beenpassed in violation of principles of natural justice. Consideration 20. We have heard learned Senior Counsel for the partiesand have perused the records. So far as the submissions withregard to the non-signing of the notices and orders digitally byrespondent no. 2 is concerned, we find no merit in the submissionsof learned Senior Counsel for the petitioner. On record, we havefound that the communication dated 31.03.2022 forms part ofAnnexure ‘15’ to the writ application. It has been digitally signedand contains DIN. 21. In the opinion of this Court, the whole case of thepetitioner would depend upon the success of his submission that inthis case, the Department had not given him any opportunity tocross-examine the complainant. 22. The Hon’ble Supreme Court in the case of GodrejSara Lee Ltd. (Supra) has held that the High Court shouldnormally not entertain a writ petition. Paragraph ‘4’ of the saidjudgment reads as under:- “4. …... It is axiomatic that the High Courts (bearingin mind the facts of each particular case) have adiscretion whether to entertain a writ petition or not.One of the self-imposed restrictions on the exerciseof power under article 226 that has evolved throughjudicial precedents is that the High Courts shouldnormally not entertain a writ petition, where aneffective and efficacious alternative remedy isavailable. At the same time, it must be rememberedthat mere availability of an alternative remedy of 22. The Hon’ble Supreme Court in the case of GodrejSara Lee Ltd. (Supra) has held that the High Court shouldnormally not entertain a writ petition. Paragraph ‘4’ of the saidjudgment reads as under:- “4. …... It is axiomatic that the High Courts (bearingin mind the facts of each particular case) have adiscretion whether to entertain a writ petition or not.One of the self-imposed restrictions on the exerciseof power under article 226 that has evolved throughjudicial precedents is that the High Courts shouldnormally not entertain a writ petition, where aneffective and efficacious alternative remedy isavailable. At the same time, it must be rememberedthat mere availability of an alternative remedy of appeal or revision, which the party invoking thejurisdiction of the High Court under article 226 hasnot pursued, would not oust the jurisdiction of theHigh Court and render a writ petition "notmaintainable". In a long line of decisions, this courthas made it clear that availability of an alternativeremedy does not operate as an absolute bar to the"maintainability" of a writ petition and that the rule,which requires a party to pursue the alternativeremedy provided by a statute, is a rule of policy,convenience and discretion rather than a rule of law.Though elementary, it needs to be restated that"entertainability" and "maintainability" of a writpetition are distinct concepts. The fine but realdistinction between the two ought not to be lost sightof. The objection as to "maintainability" goes to theroot of the matter and if such objection were found tobe of substance, the courts would be renderedincapable of even receiving the lis for adjudication.On the other hand, the question of "entertainability"is entirely within the realm of discretion of the HighCourts, writ remedy being discretionary. A writpetition despite being maintainable may not beentertained by a High Court for very many reasons orrelief could even be refused to the petitioner, despitesetting up a sound legal point, if grant of the claimedrelief would not further public interest. Hence,dismissal of a writ petition by a High Court on theground that the petitioner has not availed thealternative remedy without, however, examiningwhether an exceptional case has been made out forsuch entertainment would not be proper.” 23. So far as the contention of learned Senior Counsel based on the Circular (Annexure ‘17’) is concerned, the Circularno doubt states in paragraph ‘4’ that “Any communication which isnot in conformity with Para-2 and Para-3 above, shall be treated asinvalid and shall be deemed to have never been issued.” 24. Paragraph ‘2’ makes it mandatory that nocommunication shall be issued by any authority relating toassessment/appeals/orders/statutory or otherwise, exemptions,inquiry or investigation, verification of information, penalty,prosecution, rectification, approval etc. to the assessee or any otherperson, on or after the first day of October 2019 unless a computergenerated Document Identification Number (DIN) has beenallotted and is duly quoted in the body of such communication.However, paragraph ‘3’ of the Circular No. 19 of 2019 dated 14[th]August, 2019 carries out certain exceptional circumstances suchas- (i) when there are technical difficulties ingenerating/allotting/quoting the DIN and issuance ofcommunication electronically; or (ii) when communication regarding enquiry, verificationetc. is required to be issued by an income-tax authority,who is outside the office, for discharging his officialduties; or (iii) when due to delay in PAN migration, PAN is lyingwith non-jurisdictional Assessing Officer; or (iv) when PAN of assessee is not available and where aproceeding under the Act (other than verification undersection 131 or section 133 of the Act) is sought to beinitiated; or (v) When the functionality to issue communication is notavailable in the system;” (i) when there are technical difficulties ingenerating/allotting/quoting the DIN and issuance ofcommunication electronically; or (ii) when communication regarding enquiry, verificationetc. is required to be issued by an income-tax authority,who is outside the office, for discharging his officialduties; or (iii) when due to delay in PAN migration, PAN is lyingwith non-jurisdictional Assessing Officer; or (iv) when PAN of assessee is not available and where aproceeding under the Act (other than verification undersection 131 or section 133 of the Act) is sought to beinitiated; or (v) When the functionality to issue communication is notavailable in the system;” In the aforementioned exceptional circumstances, thecommunication may be issued manually but only after recordingreasons in writing in the file and with prior written approval of theChief Commissioner/Director General of Income Tax. Paragraph‘5’ of the Circular states as under:- “5. The communication issued manually in thethree situations specified in para 3- (i), (ii) or (iii)three situations specified in para 3- (i), (ii) or (iii) above shall have to be regularised within 15working days of its issuance, by- i.uploading the manual communication on theSystem; ii. compulsorily generating the DIN on theSystem; iii. communicating the DIN so generated to theassessee/any other person as per electronicallygenerated pro-forma available on the System.” 25. In the light of the aforementioned circular, it has been contended in the counter affidavit of the Department that the case of the petitioner for the assessment year 2017-18 wasreopened on 31.03.2021 after recording of reasons for doing so asper law. The prior sanction of the competent authority was takenfor the initiation of the assessment proceeding. Accordingly, thenotice was issued under Section 148 of the Income Tax Act. 26. It is the further stand of the Department that theassessment order for assessment year 2017-18 and computation sheet for the assessment year 2017-18 had common DIN and date31.03.2022 which is digitally signed by the Assessing Officer. It isevident from the Circular No. 19 of 2019 that under certainexceptional circumstances communication may be issued withouta computer generated DIN but the same is curable within fifteenworking days of its issuance. 27. In the present case, the assessment order (Annexure‘15’) was initially issued by the Assessing Officer withoutgenerating a DIN without documents attached to the assessmentorder and the notice were also issued in the hand-writing signatureof the Assessing Officer but subsequently, the Assessing Officerhas cured the defect and the Assessing Officer issued a digitallysigned letter dated 31.03.2022 with computer generated DIN andletter number. There is no contention of the petitioner that theonline service of orders-letter present at page number 108 of thewrit application (CWJC No. 16697 of 2022) has not been servedupon the petitioner. It is, therefore, evident that on the same date,the defect was cured, therefore, all issues raised in this regard bythe petitioner would liable to fail. 28. The second contention of learned Senior Counsel isthat the revenue proceeding justified in relying upon the complaintand the statement of the complainant without giving an opportunity to the petitioner to cross-examine the complainant. Itis submitted that in the present case, the complaint which isundated and unsigned has been made basis of the re-assessmentproceeding. 28. The second contention of learned Senior Counsel isthat the revenue proceeding justified in relying upon the complaintand the statement of the complainant without giving an opportunity to the petitioner to cross-examine the complainant. Itis submitted that in the present case, the complaint which isundated and unsigned has been made basis of the re-assessmentproceeding. 29. This Court has gone through the assessment order. Itcontains the reason for re-opening of the assessment year 2017-18relevant to financial year 2016-17. It is based on informationpassed on to the office and after analysis of the said information.The reason for reopening of the assessment was made known tothe petitioner and the petitioner has been made available a copy ofthe complaint-information. The petitioner was served with a showcause notice to explain as to why the amount of Rs.5,59,47,257/-should not be treated as escaped amount and why the mentionedamount should not be added back in his income. The petitionerreceived the show cause notice and submitted his reply throughonline/e-mail along with ledgers which have been perused andexamined by the Assessing Officer. The Assessing Officer hasrecorded that in spite of supply of reason of proceedings and otherrelevant documents to the assessee as well as sufficientopportunity, the assessee has failed to prove and substantiate thathow the undisclosed sales amount of sattu, maida, atta, besan,daliya and suji and other by-products of Rs.5,59,47,257/- have been accounted in the books of account for the assessment year2017-18. In the operating part of its order, the Assessing Officerhas inter alia recorded as under:- “Sale for the AY 2017-18 as per assessee is: Rs.174269125 Actual Sale as per information received and as percalculation: Rs. 433923267.33 Difference in sale asper information received over sale as per assessee'sreturn for the AY 2017-18-259654142.33 Since despite being given multiple opportunities,assessee failed to explain the differences, differenceamount of Rs: 25,96,54,142/- is being treated asunaccounted sales of above items. Gross Profit Ratio as per Audit Report for the AY2017-18 is 18.395% Income escaped for the AY 2017-18 = 18.395% of259654142.33 i.e Rs. 47763379.48 Further, it was calculated that income from sale of byproduct Rs.7526423/-. Assessee was asked to explainalong with documentation evidences that how thefigures of sales which is under the proceedings u/s147 were included in the books of accounts for therelevant year, hence income of Rs 75,26,423). assales from by products is being added in its incomefor the relevant year. Further, it was calculated that Income from sale ofGunny bags is Rs 6,03,455/ which assessee has failed to explain/submit andsubstantiate despite being given multipleopportunities. Therefore income of Rs 6,03,455/ isbeing added in his income Laxuy, income from sale or cartoonx on the piano packaging materials inwhich plastics rolls was calculated no. Rs 4500 x 13Rs. 84000 as basis, which assess did not explain.Therefore Rs. 54000 is being added in his income.5. Hence, as per the above discussion, totalunexplained business income of the assessee isRs.47763379.48 +Rs.7526423 +Rs.603455 +Rs.54000 = Rs.5,59,47, 257/-.” Further, it was calculated that Income from sale ofGunny bags is Rs 6,03,455/ which assessee has failed to explain/submit andsubstantiate despite being given multipleopportunities. Therefore income of Rs 6,03,455/ isbeing added in his income Laxuy, income from sale or cartoonx on the piano packaging materials inwhich plastics rolls was calculated no. Rs 4500 x 13Rs. 84000 as basis, which assess did not explain.Therefore Rs. 54000 is being added in his income.5. Hence, as per the above discussion, totalunexplained business income of the assessee isRs.47763379.48 +Rs.7526423 +Rs.603455 +Rs.54000 = Rs.5,59,47, 257/-.” 30. Neither from the assessment order nor from theaverments made in the writ application, it would appear that inthis case, the Assessing Officer has examined the complainantin course of the proceeding. The petitioner has placed onrecord its written submissions. In paragraph ‘8’ and ‘9’ of thewritten submission, the petitioner has mentioned the contentsof the complaint and the fact that the complainant had alsofiled handwritten volumes of certain transactions. In hiswritten submissions, the petitioner admits that the complaintcontains a handwritten volume of certain transactions. He hasmade a submission that unless, the complaint along withhandwritten volumes are shown to have a rational connectionwith the business carried out by the petitioner, the samecannot form a basis of re-assessment. He has sought to cross-examine the complainant and relied upon the judgment of the Hon’ble Supreme Court in the case of Andaman TimberIndustries (supra). 31. It is evident from his submissions that thepetitioner was provided with xerox copies of theinformation/complaint and the voluminous documentsshowing some transactions and admits that the complaintcontained the quantum of sales and also profit, it appears tothis Court that the information and documents of transactionsfurnished by the complainant, who happened to be one of thepartners of the petitioner-firm, is the basis of the issuance ofnotice and the reason to believe for the re-assessmentproceeding. So far as the assessment order is concerned, theAssessing Officer has examined the information withreference to the documents of transactions which came fromthe complainant and this has been done only after giving anopportunity of hearing to the petitioner. 32. In the case of Andaman Timber Industries(supra), the adjudicating authority under the Central ExciseAct carried out an investigation after noticing hugediscrepancy in the price of goods shown by the assessee in itsdeclaration under Section 173C of the Central Excise Rules. In course of investigation, statements of two buyers wererecorded and on that basis, show-cause notice dated03.05.1995 was served upon the assessee. Based on thatstatement of the two buyers, a show-cause notice was servedupon the assessee stating as to why the price at which thegoods were sold to these customers from the depots may notbe the basis for determining the value for the purpose ofexcise duty. This was being contested by Andaman TimberIndustries challenging the correctness of the statements of thetwo witnesses, they demanded right to cross-examine thewitnesses but the request was refused. In the aforementionedbackground of facts when the matter travelled to the Hon’bleSupreme Court, the Hon’ble Supreme Court were of the viewas under:- “According to us, not allowing the assessee tocross-examine the witnesses by the AdjudicatingAuthority though the statements of those witnesseswere made the basis of the impugned order is aserious flaw which makes the order nullityinasmuch as it amounted to violation of principlesof natural justice because of which the assesseewas adversely affected. It is to be borne in mindthat the order of the Commissioner was based uponthe statements given by the aforesaid twowitnesses….” “According to us, not allowing the assessee tocross-examine the witnesses by the AdjudicatingAuthority though the statements of those witnesseswere made the basis of the impugned order is aserious flaw which makes the order nullityinasmuch as it amounted to violation of principlesof natural justice because of which the assesseewas adversely affected. It is to be borne in mindthat the order of the Commissioner was based uponthe statements given by the aforesaid twowitnesses….” 33. This Court is of the considered opinion that thecase of the petitioner would stand on a different footing fromthat of Andaman Timber Industries (supra). In the presentcase, not only the copy of complaint but even the documentsshowing transactions of the firm were made available to thepetitioner. The impugned order is not based on anyexamination of the complainant. In fact, there is no recordingof the statement of the complainant or any other witness. Theimpugned order of assessment is based upon the materialswhich came to the notice of the Assessing Officer. Afteranalysing the same, when the Assessing Officer was of theview that despite supply of reason of proceedings and otherrelevant documents to the assessee as well as sufficientopportunity, the assessee has failed to prove and substantiatethat how undisclosed sales amount have been accounted in thebooks of accounts for the assessment year 2017-18, he haspassed the impugned order. 34. In the case of Bharat Petroleum Corporationvs. N.R. Vairamani and Anr. reported in (2004) 8 SCC 579,the Hon’ble Supreme Court has put a word of caution whenthe Court opined that the judgment of the Court should not be cited like a Euclid’s theorem as a slight change in the facts ofthe case would make a sea difference in the opinion of theCourt. We extract that part of the observation of the Hon’bleSupreme Court in paragraph ‘9’ of its judgment hereunder:- 9. Courts should not place reliance on decisionswithout discussing as to how the factual situationfits in with the fact situation of the decision onwhich reliance is placed. Observations of courts areneither to be read as Euclid's theorems nor asprovisions of a statute and that too taken out oftheir context. These observations must be read inthe context in which they appear to have beenstated. Judgments of courts are not to be construedas statutes. To interpret words, phrases andprovisions of a statute, it may become necessary forjudges to embark into lengthy discussions but thediscussion is meant to explain and not to define.Judges interpret statutes, they do not interpretjudgments. They interpret words of statutes; theirwords are not to be interpreted as statutes. InLondon Graving Dock Co. Ltd. v. Horton[2] (AC at p.761) Lord MacDermott observed : (All ER p. 14 C- D) “The matter cannot, of course, be settled merely bytreating the ipsissima verba of Willes, J., as thoughthey were part of an Act of Parliament and applyingthe rules of interpretation appropriate thereto. Thisis not to detract from the great weight to be given tothe language actually used by that mostdistinguished judge,…” 2. 1951 AC 737 : (1951) 2 All ER 1 (HL) 35. It is not for this Court sitting in its writjurisdiction to analyse the kind of information and thedocuments which were in possession of the Assessing Officerwhile passing the impugned order of assessment. 36. In result, we find no jurisdictional error in theimpugned order. These writ applications are dismissed butwith liberty to the petitioner to seek its statutory remedy inappeal, if so advised, before the competent/authorityappropriate forum. 37. If any such remedy is applied for within a periodof four weeks from today, the same will be considered by the Appellate Authority keeping in view that the petitioner waspursuing its remedy before this Court in the present writapplication under some legal advice. (Rajeev Ranjan Prasad, J) (Shailendra Singh, J) SUSHMA2/- 35. It is not for this Court sitting in its writjurisdiction to analyse the kind of information and thedocuments which were in possession of the Assessing Officerwhile passing the impugned order of assessment. 36. In result, we find no jurisdictional error in theimpugned order. These writ applications are dismissed butwith liberty to the petitioner to seek its statutory remedy inappeal, if so advised, before the competent/authorityappropriate forum. 37. If any such remedy is applied for within a periodof four weeks from today, the same will be considered by the Appellate Authority keeping in view that the petitioner waspursuing its remedy before this Court in the present writapplication under some legal advice. (Rajeev Ranjan Prasad, J) (Shailendra Singh, J) SUSHMA2/- AFR/NAFRAFRCAV DATE19.02.2025Uploading Date25.04.2025Transmission Date25.04.2025