Ministry Of Finance, New Delhi-110 001 v. Ganediwala, Jj.dated : 19[Th] January, 2022

1 IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. WRIT PETITION NO.1927/2021 Pankaj s/o Roshan Dhawan,Aged about 40 years, residing having place of business at Dhawan Complex, Near Ambedkar Bank Chamarnala, Nagpur-440 011.(MS) ....... PETITIONER ...V E R S U S... 1] National e-Assessment Centre, Income Tax Department, Ministry of Finance, Government of India,Delhi.Delhi. 2]Principal Commissioner of Income Tax-2,Saraf Chamber, Sadar, Nagpur. Saraf Chamber, Sadar, Nagpur. 3]Dy. Commissioner of Income Tax,Circle-2, Nagpur.Aaykar Bhawan, Civil Lines, Nagpur.Circle-2, Nagpur.Aaykar Bhawan, Civil Lines, Nagpur. 4]The Central Board of Direct Taxes,Ministry of Finance,North Block, New Delhi-110 001.Ministry of Finance,North Block, New Delhi-110 001. 5]The Union of India,through the Secretary,Government of India,through the Secretary,Government of India, Ministry of Finance, New Delhi-110 001. ....... RESPONDENTS -------------------------------------------------------------------------------------------------------------------- Shri S.C.Thakar, Advocate with Shri R.S.Thakar, Advocate for petitioner.Shri A.J.Bhoot, Advocate for respondent no.3. –------------------------------------------------------------------------------------------------------------------ CORAM : A.S.CHANDURKAR and PUSHPA V. GANEDIWALA, JJ.DATED : 19[th] JANUARY, 2022. ORAL JUDGMENT ( Per A.S.CHANDURKAR, J.) Rule. Rule made returnable forthwith. Heard learned counsel for the parties in view of notice for final disposal issued earlier. 2.The challenge raised in this writ petition filed under Article 226 ofthe Constitution of India is to the assessment order dated 14.05.2021pursuant to the scrutiny assessment under E-Assessment Scheme-2019. Thesaid order has been passed under Section 143(3) read with Section 144-B ofthe Income Tax Act, 1961 (for short, ‘the said Act’) by which the income of theassessee stands assessed. Consequent there upon a demand notice has alsobeen issued on the same day in terms of the aforesaid order. 3.The principal ground of challenge as raised to the assessment orderis based on the breach and non-compliance of the principles of natural justiceinasmuch as there was no proper and sufficient opportunity granted to thepetitioner to respond to the show cause notice issued in that regard by therespondent no.1. On 10.04.2021 the respondent no.1 issued a show causenotice to the petitioner seeking his response as to why assessment should notbe completed as per the draft assessment order. The petitioner was calledupon to respond to the said show cause notice by 4.00 p.m. of 13.04.2021which is within a period of three days from the receipt of that notice. Thepetitioner was informed that he could request for grant of personal hearingwhich request if granted would be conducted through video conferencing. Inresponse thereto, the petitioner on 12.04.2021 made a request foradjournment on medical grounds and prayed that such adjournment begranted till 21.04.2021. The petitioner also indicated on the same day that the matter would require explanation due to complexity of facts and hencerequested for personal hearing through video conference. It is the further caseof the petitioner that on 21.04.2021 a detailed reply to the show cause noticewas submitted by the petitioner. The respondent no.1 however on14.05.2021 issued the assessment order in question but without consideringthe reply as furnished by the petitioner. This aspect is sought to be indicatedby referring to the contents of paragraph 5 of the assessment order wherein itwas stated that the assessee had not submitted any proper explanation till20.04.2021. On this basis, it is submitted by the learned counsel for thepetitioner that though the petitioner responded to the show cause notice on21.04.2021 and assessment order was passed much later on 14.05.2021, thepetitioner’s explanation has not been taken into consideration. This hasresulted in denial of proper opportunity to the petitioner and failure to takeinto consideration his response to the show cause notice. In other words,despite seeking adjournment on 12.04.2021 till 21.04.2021 and thereafterfiling reply on 21.04.2021, the same has not been considered by therespondent no.1 while issuing the assessment order. On this count, it issubmitted that the assessment order is liable to be set aside. 4.The learned counsel for the respondent no.3 by relying upon thereply filed on record submitted that after considering the entire material onrecord the assessment order was passed. Since no new fact or material 420.WP1927.21(j) evidence was submitted by the petitioner in the reply dated 21.04.2021, theassessment order came to be passed in accordance with law. It was submittedthat due opportunity was given to the petitioner before passing the assessmentorder. Further an alternate remedy by way of statutory appeal under Section264 of the said Act was available to the petitioner for challenging theassessment order. It was thus submitted that the writ petition did notdeserve to be entertained. 5.Having heard the learned counsel for the parties and having givendue consideration to their respective submissions, we are satisfied that theassessment order dated 14.05.2021 has been passed without granting properand meaningful opportunity to the petitioner to respond to the show causenotice. It is not in dispute that as per show cause notice dated 10.04.2021 thepetitioner was called upon to submit his response by 4.00 p.m. of 13.04.2021.The petitioner on 12.04.2021 sought time to furnish his response on medicalgrounds. A request for personal hearing was also made while seeking time till21.04.2021. It is further not in dispute that on 21.04.2021 the petitioner didfile his reply to the show cause notice. Paragraph 5 of the assessment orderdated 14.05.2021 indicates that the concerned Authority preferred to waitonly till 20.04.2021 and thereafter proceeded to pass the assessment order.Despite the fact that on 21.04.2021 the petitioner had filed reply to the showcause notice, the same has not been taken into consideration though the 520.WP1927.21(j) 520.WP1927.21(j) assessment order was passed much later on 14.05.2021. In other words, if theAuthority was to pass the assessment order on 14.05.2021 the materialalready on record in the form of petitioner’s reply dated 21.04.2021 ought tohave been considered before passing the assessment order. Thus, despite thepetitioner responding to the show cause notice much prior to issuance of theassessment order, there is no consideration of the reply given by the petitionerto the show cause notice. A mere statement now in the affidavit in reply thatthe petitioner’s response to the show cause notice did not contain any new ormaterial fact cannot be accepted as such reason/consideration is not found inthe impugned assessment order. The validity of the impugned assessmentorder would have to be judged from its contents and the same cannot besupported by extraneous material in the form of affidavit in reply. Hence forthis reason the challenge to the assessment order dated 14.05.2021 is liable tosucceed. 6.It is true that an alternate remedy by way of statutory appeal isavailable to the petitioner. However in view of the fact that it is apparent thatthe assessment order has been issued without granting due and properopportunity to the petitioner, we are not inclined to relegate the petitioner toavail that statutory remedy. We may also state that the petitioner haschallenged the provisions of Section 144-B(7)(viii) and (xii) and provisions ofSection 144-B(1)(xvi)(b) and (c) of the said Act as being violative of Article 14 of the Constitution of India. Since we are not required to enter into themerits of the assessment order, such challenge is kept open for being raised atan appropriate stage, if so advised. 7.For reasons aforesaid, the assessment order dated 14.05.2021passed by the respondent no.1 is set aside. The proceedings are remanded tothe respondent no.1 for a fresh consideration in accordance with law aftergiving due opportunity of hearing to the petitioner. The challenges on meritsto the assessment order are kept open for being raised before the saidAuthority. The proceedings be completed within a period of six months fromtoday. Consequently the notice of demand dated 14.05.2021 issued pursuantto the assessment order would not survive. Rule is made absolute in aforesaid terms with no order as to costs. (PUSHPA V. GANEDIWALA, J.) (A.S.CHANDURKAR, J.) Andurkar..