Jayaraman Madhan Mohan v. Assistant Commissioner Of Income Tax,Central Circle

W.P.(MD)No.13850 of 2021 Jayaraman Madhan Mohan v.Assistant Commissioner of Income Tax BEFORE THE MADURAI BENCH OF MADRAS HIGH COURTDATED: 10.08.2021 CORAM THE HON'BLE MR.JUSTICE R.SURESH KUMAR W.P.(MD)No.13850 of 2021and W.M.P(MD).No.10809 of 2021 (Through Video Conference) Jayaraman Madhan Mohan.. Petitioner Vs. Assistant Commissioner of Income Tax,Central Circle-2,Kulamangalam Main Road,Meenambalpuram,Madurai- 625 002...Respondent Prayer: Writ Petition is filed under Article 226 of Constitutionof India, to issue a Writ of Certiorarified Mandamus, callingfor the records on the file of the respondent and quash theimpugned order in ITBA/AST/S/153C/2021-22/1033636859(1) dated23.06.2021 passed by the respondent as illegal and consequentlydirect the respondent to pass a fresh assessment order aftergranting the petitioner, sufficient opportunity of being heard andopportunity to cross examine the statements of persons relied uponin accordance with law. ORDER Prayer sought for herein is for a Writ of CertiorarifiedMandamus, calling for the records on the file of the respondentand quash the impugned order in ITBA/AST/S/153C/2021-22/1033636859(1) dated 23.06.2021 passed by the respondent and consequentlydirect the respondent to pass a fresh assessment order, aftergranting the petitioner, sufficient opportunity of being heard andopportunity to cross examine the statements of persons relied uponin accordance with law. 2.A search was conducted on October, 2018 at oneM/s.V.V.Mineral Group, which disclosed some information to thehttps://hcservices.ecourts.gov.in/hcservices/revenue to come to a conclusion that a sum of Rs.10,00,00,000/- (Rupees Ten crores only) out of a total sum of Rs.54.34 crores hadbeen dealt with by way of cash, that, triggered the revenue toinitiate the proceedings under Section 153(c) of the Income TaxAct, 1961 (in short 'the Act'). During the search, it seems tohave found some discrepancy in the account to the extent ofRs.10,00,00,000/- (Rupees Ten crores only) out of Rs.54.34 croresfor the Financial year 2013-2014. Subsequently, the case wastransferred to the Central Circle, therefore, it took some time totake up further action in this regard. Therefore, on 23.02.2021,notice under Section 153(c) was issued requiring the Assessee tofile return. Since there was no response from the Assessee, therevenue sent a notice under Section 142(1) on 15.03.2021, callingfor the copy of the return filed by the Assessee under Section 153(c) of the Act. In response to the same, the Assessee filed thereturn for the income of Rs.41,68,490/-(Rupees Forty one lakhssixty eight thousand four hundred and ninety only) on 18.03.2021,by which, the earlier income declared in the return, seems to havebeen reiterated, therefore, not satisfying with the same, therevenue then issued notice under Section 143(2) dated 22.03.2021,whereby, a hearing was fixed to be held on 29.03.2021. 3.In response to the said notice, the Auditor of the Assesseeappeared on 29.03.2021 and filed the power given by the Assesseeto the said Chartered Accountant/Firm. Thereafter, the case wasposted for hearing as per notice dated 01.04.2021 on 08.04.2021,and subsequently, the revenue realised that the questionnaire hadnot been attached with the notice dated 01.04.2021, therefore, on02.04.2021, a further notice under Section 142(1) annexing thequestionnaire to be answered by the Assessee was sent, where, thehearing was fixed on 09.04.2021. 3.In response to the said notice, the Auditor of the Assesseeappeared on 29.03.2021 and filed the power given by the Assesseeto the said Chartered Accountant/Firm. Thereafter, the case wasposted for hearing as per notice dated 01.04.2021 on 08.04.2021,and subsequently, the revenue realised that the questionnaire hadnot been attached with the notice dated 01.04.2021, therefore, on02.04.2021, a further notice under Section 142(1) annexing thequestionnaire to be answered by the Assessee was sent, where, thehearing was fixed on 09.04.2021. 4.In this context, it is the case of the petitioner Assesseethat, the 09.04.2021 hearing was refixed on 04.05.2021, and on04.05.2021, only a part of the documents were able to be procuredand submitted by e-mail communication of the Auditor ofthe Assessee and after having submitted the same, the Auditor ofthe Assesse had sent a further e-mail communication on the verysame date, that is, on 04.05.2021, that, the concerned person orpartner of the Auditor Firm of the Assessee, since had been testedPositive of Covid-19, he requires sometime. 5.The said request had been rejected by further e-mailcommunication of the revenue, and thereafter, no further time wasgiven and therefore, according to the Assessee, there could be nochance of having access with the respondent revenue to fileadditional documents as they required under the notice. Only atthat juncture, the revenue passed the impugned assessment orderhttps://hcservices.ecourts.gov.in/hcservices/dated 23.06.2021, directing the Assessee to pay the tax under Section 143(3) r/w 153(c) of the Act. Aggrieved over the saidassessment order dated 23.06.2021, on the sole ground that noproper opportunity had been given as the time extensionapplication submitted by the petitioner Assessee, on the groundthat the authorised person, that is, the Auditor concerned sincegot Covid-19 Postive, has got rejected by the revenue, theAssessee could not produce the necessary documents as claimed orrequired by the revenue. Therefore, the Assessee on the soleground of alleged violation of principle of natural justice hasmoved this writ petition challenging the impugned assessmentorder. 6.Heard Mr.R.Sivaraman, learned counsel appearing for thepetitioner, who, having reiterated the aforesaid, would contendthat, because of the medical reasons, where the concerned partnerof the partnership firm, who are the authorised representative ofthe Assessee as per the power given to them, which infact havebeen accepted by the revenue, was tested Positive of Covid-19 andbased on the medical certificate in this regard, declaring thatthe concerned Auditor was tested Positive of Covid-19, when arequest was made to the revenue, the same has been turned out andno further time was given, therefore, without giving any furthertime on medical reason, since the impugned assessment order hasbeen issued, it is a case of violation of principle of naturaljustice. Therefore, on that sole ground, the petitioner has movedthis writ petition, hence, the learned counsel for the petitionerseeks indulgence of this Court. 7.Per contra, Mr.N.Dilip Kumar, learned Standing Counselappearing for the respondent revenue would submit that, though thesearch was conducted in the year 2018, it had taken some time toissue notice under Section 153(c) only in February, 2021 and inbetween the said time, the Department had taken a decision totransfer the case to the Central Circle. Therefore, in thisregard, if at all, the Assessee wanted to face the revenue, asthey knew that a search had already been conducted in October,2018, they could have made ready all those documents to submitbefore the revenue, when it is called for. That apart, when noticewas issued under Section 153(c) on 23.02.2021, no return wasfiled, however, belatedly, the return was filed stating theearlier return submitted in this regard being reiterated in March,2021. Therefore, not satisfied with the same 143(2) notice wasissued, in response to the same, the Auditor of the Assessee,claimed to be the authorised representative, filed his power andhe did not file the documents, which were sought for. Therefore,though earlier notice was issued under Section 142(1) on01.04.2021, subsequently, another notice under Section 142(1) washttps://hcservices.ecourts.gov.in/hcservices/issued on 02.04.2021. This time, the questionnaire was annexed and therefore, it was expected that the said questionnaire annexedunder Section 142(1) would be responded properly by the Assesseefor which the hearing date was fixed on 04.05.2021. 8.Therefore, the petitioner Assessee was given enoughopportunity and he was having enough time to respond from October,2018 till May, 2021, therefore, on 04.05.2021, since the Assesseethrough his authorised representative could not produce therelevant documents and only part of the documents had been filedand for the remaining documents, when they are going to file hasnot also been stated, except sending a mail stating that theconcerned partner of the Auditor/Firm, that is, the representativeof the Assessee tested Covid-19 Positive, therefore, the saidflimsy reason given was not accepted by the revenue, therefore,the revenue proceeded to go ahead with the assessment and passedthe assessment order dated 24.06.2021, which is impugned herein.Therefore, the learned Standing Counsel would submit that, inthis case, since enough opportunity had already been given to theAssessee, it cannot be considered as a case of no opportunity wasgiven. Therefore, on the alleged ground of violation of principleof natural justice, the assessment order cannot be assailed beforethis Court invoking the extraordinary jurisdiction under Article226 of the Constitution of India and in this regard, if at all,the petitioner Assessee is aggrieved, he can file a regular appealunder the Act, hence on this ground alone, the writ petitioncannot be entertained and liable to be dismissed, hence, he seeksdismissal of this writ petition. 9.I have considered the said rival submissions made by thelearned counsel for the parties and have perused the materialsplaced before this Court. 9.I have considered the said rival submissions made by thelearned counsel for the parties and have perused the materialsplaced before this Court. 10.Up to 04.05.2021, there has been no quarrel with regard tothe correspondence between the respondent and the Assessee.Finally as per 142(1) notice annexed with questionnaire dated02.04.2021, date of hearing was fixed on 04.05.2021. On the date,it is the definite case of the petitioner Assessee that hisauthorised representative, that is, Auditor concerned since hadbeen tested Positive of Covid-19, could not appear, however, apart of the documents, which were readily available at the timehad been sent through e-mail. The medical certificate to thateffect also had been sent with a request to give further time,however, the same has been turned out and the communicationrejecting the request of the petitioner for extending time hasbeen communicated to the company e-mail address, which was closedlong years back, however, with great difficulty, that mail hasbeen received by the petitioner Assessee, where also the languagehttps://hcservices.ecourts.gov.in/hcservices/used is that the response due Nil, for submission of notice under Section 142(1) is extended upto NIL. Such a technical languagewhich has been used, which could not be understood by the Asseseewhether the further time has been extended or has been rejected.Be that as it may, insofar as the said request of the Assesseeside, to give further time for production of all the relevantdocuments, either in person or through e-mail, for which a datecan be given by the revenue is concerned, it was a request madepurely on the basis of medical ground, as the concerned Auditor,who has been authorised by the Assessee to represent or theAuditor Firm concerned, since tested Positive of Covid-19 and acertificate to that effect given by the medical laboratory hasalso been annexed, this Court feel that the said request couldhave been considered positively by the respondent revenue and areasonable time, as a final chance could have been given. 11.If such a chance had been given to the petitioner Assesseeto respond, as the revenue is going to pass the assessment orderonly at the end of June, 2021, no prejudice would have been causedto the revenue, therefore, this Court feel that without givingsuch a reasonable time as a last chance to respond to thepetitioner Assessee, since the Assessment order has been passed,the ground urged by the petitioner Assessee that there is aviolation of principle of natural justice is appealing to thisCourt and therefore on that ground, this Court is inclined toentertain this writ petition and dispose of the same withfollowing order: 'that for the purpose of remanding the matter back tothe respondent revenue for reconsideration by giving somemore reasonable time as a last chance to respond, theimpugned order is hereby quashed and accordingly, thematter is remitted back to the respondent forreconsideration.' 12.During the reconsideration process, the revenue shall givethree weeks time to the petitioner Assessee to make a completeresponse as per the last notice dated 02.04.2021 issued underSection 142(1) of the Act and accordingly, within the said threeweeks period, the petitioner Assessee shall respond positivelywithout fail, and based on which a fresh assessment order can bepassed by the revenue, on merits and in accordance with law. It ismade clear that within the three weeks, if there is no response orthere is no full response for whatever reason to be claimed by theAssessee, it is open to the revenue to proceed with the matter andpass orders of assessment, after completion of the three weeksperiod. The three weeks period shall commence from the date ofreceipt of a copy of this order. https://hcservices.ecourts.gov.in/hcservices/13.With these directions, this writ petition is disposed of. W.P.(MD)No.13850 of 2021 Jayaraman Madhan Mohan v.Assistant Commissioner of Income Tax However, there shall be no orders as to costs. Consequently,connected miscellaneous petition is closed. Assistant Registrar (AE) PJL / /2021Sub Assistant Registrar(CS) Note: In view of the present lock down owing to COVID-19pandemic, a web copy of the order may be utilized forofficial purposes, but, ensuring that the copy of theorder that is presented is the correct copy, shall be theresponsibility of the Advocate/litigant concerned. To The Assistant Commissioner of Income Tax,Central Circle-2,Kulamangalam Main Road,Meenambalpuram,Madurai- 625 002. +1 CC to M/s.R.SIVARAMAN (SR-25797[F] dated 10/08/2021) +1 CC to M/s.N.DILIPKUMAR, Advocate (SR-25831[F] dated 10/08/2021) SRK(CO)SB(16.09.2021) 6P 4C W.P.(MD)No.13850 of 202110.08.2021 https://hcservices.ecourts.gov.in/hcservices/