D.b. Civil Writ Petition v. Income Tax Officer, Ward - 2(1), Dainik Navjyoti Building,Rawatbhata Road, Kota, Rajasthan.rawatbhata Road, Kota, Rajasthan

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 9560/2022 Royal Crystal Dealers Private Limited, Principal Place Of BusinessAt D-Block, Multimetals Limited Campus, 6-7 Heavy IndustrialArea, Kansua Road, Kota-324003 Rajasthan Through Its DirectorRajesh Kumar Patil, S/o Sh. Raja Ram Patil, Aged About 54, R/oH.no. A 249, Shelke Sadan, Opp. Bala Ji Market, Rangbari Road,Veersavarkar Nagar, Kota-324005, Rajasthan ----Petitioner Versus 1. Income Tax Officer, Ward - 2(1), Dainik Navjyoti Building,Rawatbhata Road, Kota, Rajasthan.Rawatbhata Road, Kota, Rajasthan. 2. National Faceless Assessment Centre, 4Th Floor, MayurBhawan, Conaught Place/circus, New Delhi-110001Bhawan, Conaught Place/circus, New Delhi-110001 ----Respondents For Petitioner(s) : Mr. Sanjay Jhanwar, Sr. Adv. assisted by Ms. Vrinda Balotia Mr. Rajat Sharma by Ms. Vrinda Balotia Mr. Rajat Sharma For Respondent(s): Mr. Shantanu Sharma withMs. Bhawna LaddhaMs. Bhawna Laddha HON'BLE MR. JUSTICE ARUN BHANSALI HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 05/01/2024 1.This petition has been filed by the petitioner aggrieved of thepenalty order dated 25.03.2022, the rectification order dated10.06.2022 and consequent demand notice dated 25.03.2022. 2.The order impugned dated 25.03.2022 (Annexure-7) underSection 271(1)(c) of the Income Tax Act, 1961(‘the Act’) waspassed by the Authority inter-alia observing that till thefinalization of the order, neither the assessee filed any reply, norany adjournment was sought. 3.The Authority further observed that the assessee had filedthe appeal against the order passed under Section 144/263 of theAct and the appeal was decided against the assessee against theorder dated 22.12.2019 passed by the CIT (A) and went on tolevy the penalty. Pursuant to the said order, the demand noticewas also issued to the petitioner. 4.The petitioner filed an application under Section 154 of theAct seeking rectification of the order dated 25.03.2022 (Annexure-7) inter-alia on the grounds that the reply was filed by thepetitioner before the Authority and that the appeal had not beendecided. 5.The respondents vide order dated 10.06.2022 (Annexure-11)on the application seeking rectification, though indicated thatthere was a mistake qua the fact about decision of the appeal andrectified the same, however, on the aspect as to whether the replywas filed or not, it was observed that the said aspect has to bedecided by CIT (A) in the appeal and the said aspect cannot berectified under Section 154 of the Act. 6.Learned senior counsel appearing for the petitioner madesubmissions that it was the specific case of the petitioner beforethe Authority under Section 154 of the Act that the reply was filed,whereas, the order under Section 271 indicated that no reply wasfiled and the said Authority has proceeded on the assumption thatno response was filed, which aspect was factually incorrect. Hehas drawn attention of this Court to the acknowledgments atpages 41, 42 and 63 of the paper-book in this regard. 7.Submissions have been made that despite the fact that thereply was part of the record of the Authority, denial to rectify the said mistake, cannot be sustained and therefore, the ordersimpugned deserve to be quashed and set aside. 8.Reply to the petition has been filed inter-alia reiterating thestand as taken by the Authority while partly accepting theapplication for rectification. 9.Submissions have been made that the fact as to whether thereply has been filed or not, does not fall within the parameters ofthe Section 154 of the Act and, therefore, the application to thatextent has been rightly rejected. 10.Vide order dated 21.12.2023, learned counsel for therespondents was directed to verify the claim made by thepetitioner about filing of the response before the said Authority asreflected in the acknowledgments at pages 41, 42 and 63 of theAct. said mistake, cannot be sustained and therefore, the ordersimpugned deserve to be quashed and set aside. 8.Reply to the petition has been filed inter-alia reiterating thestand as taken by the Authority while partly accepting theapplication for rectification. 9.Submissions have been made that the fact as to whether thereply has been filed or not, does not fall within the parameters ofthe Section 154 of the Act and, therefore, the application to thatextent has been rightly rejected. 10.Vide order dated 21.12.2023, learned counsel for therespondents was directed to verify the claim made by thepetitioner about filing of the response before the said Authority asreflected in the acknowledgments at pages 41, 42 and 63 of theAct. 11.Today, learned counsel for the respondents has fairlysubmitted that the response as claimed by the petitioner havebeen filed and forms part of the record of the Authority. 12.In view of the above fact situation, when it is apparent thatthe order dated 25.03.2022 (Annexure-7) was passed by theAuthority on the assumption that no response was filed, whereas,the response filed by the petitioner form part of the record of theAuthority, the same clearly reflects a mechanical exercise andnon-application of mind to the record available before theAuthority. 13.In so far as the maintainability of the application and/or thesaid aspect not falling within the parameters of the Section 154 ofthe Act is concerned, the stand taken by the Officer as well as therespondents cannot be sustained. Once it is found as a fact that factually incorrect statement pertaining to filing of the response,which is fundamental to the decision to be made by the Authorityhas been wrongly indicated in the order, the Authority in allhumility should have accepted the mistake committed by him andonce an application under Section 154 of the Act was filed, heshould have immediately recalled the order passed by him andshould have proceeded in accordance with law thereafter. 14.Be that as it may, as it has been factually found, based onthe submissions made by learned counsel for the respondents,that the response filed by the petitioner forms part of the recordof the respondents and the order dated 25.03.2022 (Annexure-7)has been passed by ignoring the response filed by the petitioner,the petition deserves to be allowed. 15.Consequently, the order impugned dated 10.06.2022(Annexure-11) partly rejecting the rectification application is setaside. As a consequence to the finding about the reply of thepetitioner being available on record of the Authority and the orderdated 25.03.2022 (Annexure-7) having been passed ignoring thesaid reply, the order dated 25.03.2022 (Annexure-7) is also setaside. The respondents are directed to pass a fresh order afterproviding an opportunity of hearing to the petitioner in accordancewith law. 16.The application No.01/2023 also stands disposed of. (ASHUTOSH KUMAR),J (ARUN BHANSALI),J AARZOO ARORA /24