M/S. Poddar Real Estates Pvt. Ltd v. Income Tax Officer, Ward – 5(2), Kolkata & Ors

Form No. J.(2)Item No.1 IN THE HIGH COURT OF JUDICATURE AT CALCUTTACIVIL APPELLATE JURISDICTIONAPPELLATE SIDE HEARD ON: 23.04.2024 DELIVERED ON: 23.04.2024 CORAM: THE HON’BLE MR. CHIEF JUSTICE T.S. SIVAGNANAM AND THE HON’BLE MR. JUSTICE HIRANMAY BHATTACHARYYA M.A.T. 37 of 2023 With I.A. No. CAN 1 of 2023 M/s. Poddar Real Estates Pvt. Ltd. Vs. Income Tax Officer, Ward – 5(2), Kolkata & Ors. Appearance:-Mr. Soumitra ChowdhuryMr. Pranabesh SarkarMr. Kausheyo RoyMr. Samrat DasMs. Elina Dey ………for the Appellant Mr. Vipul KundaliaMr. Amit Sharma ………for the Income Tax Authority Mr. Bhaskar Prosad BanerjeeMr. A. Maity …..for the CGST & CX Authority JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, C.J.) 1. This intra-Court appeal by the writ petitioner is directed against the orderdated 19[th] December, 2022 in W.P.A. No.27884 of 2022. In the said writpetition, the appellant had challenged the assessment passed under Sectiondated 19[th] December, 2022 in W.P.A. No.27884 of 2022. In the said writpetition, the appellant had challenged the assessment passed under Section 148 of the Income Tax Act, 1961 (for brevity, “the Act”) as against the orderpassed under Section 271(i)(c) of the Act imposing penalty. The assesseehas filed an appeal before the Commissioner of Income Tax (Appeals) andthe appeal is pending. In the appeal memorandum, a specific ground hasbeen raised by the assessee stating that the income tax return for theassessment year 2009-2010 was filed on 27[th] February, 2010 declaring aloss of Rs.89,410/-. No notice under Section 147 or Section 148 has beenreceived by the assessee. Similarly, no assessment order dated 2[nd]December, 2016 was served on the assessee by the I.T.O., no notice underSection 143(2) and 143(1) of the Act was served on the assessee and nonotice under Section 271 (1)(c) was served on the assesssee and as theassessment order has not been served, the imposition of penalty underSection 271(i)(c) is wrong. 2. When the appeal came up earlier, the department was directed to file theiraffidavit-in-opposition so that the factual position can be clarified. If it isestablished that the assessee has not been served with the copy of theassessment order, it goes without saying that the assessee is entitled to anopportunity to put forth their matter. In terms of the directions issuedearlier, affidavit in opposition has been filed by the department. Fromparagraph 9 of the affidavit, it is seen that the PAN jurisdiction over theassessee was transferred to Income Tax Officer, Ward – 5(2), Kolkata fromIncome Tax Officer Ward –46(1), Kolkata vide order dated 21[st] January,2014. Thereafter, the ITO, Ward No.5(2), Kolkata merged with the ITO,Ward 5(1), Kolkata. In the order under Section 127 of the Act, thedepartment admits that the address of the appellant/assessee is mentioned as 22, BRB Basu Road, Canning Street, 1[st] Floor, Room NO.14, Kolkata –700001. Thereafter, the affidavit proceeds to state the further steps takenand in sub- paragraph (e) it is stated that notice under Section 148 wasissued by ITO, Ward 5(2), Kolkata on 31[st] March, 2016 and the service ofthe said notice was made by affixation by departmental inspector on 31[st]March, 2016 at the address 37, Abani Dutt Road, 1[st] Floor, Howrah –711106. Thus, it is evident that despite the department being aware of thechange of address, the notice under Section 148 of the Act has been servedby affixing in the old address. This is sufficient to hold that the proceeding,which was taken ex parte is not sustainable in law. as 22, BRB Basu Road, Canning Street, 1[st] Floor, Room NO.14, Kolkata –700001. Thereafter, the affidavit proceeds to state the further steps takenand in sub- paragraph (e) it is stated that notice under Section 148 wasissued by ITO, Ward 5(2), Kolkata on 31[st] March, 2016 and the service ofthe said notice was made by affixation by departmental inspector on 31[st]March, 2016 at the address 37, Abani Dutt Road, 1[st] Floor, Howrah –711106. Thus, it is evident that despite the department being aware of thechange of address, the notice under Section 148 of the Act has been servedby affixing in the old address. This is sufficient to hold that the proceeding,which was taken ex parte is not sustainable in law. 3. For the above reasons, the appeal and the connected application (I.A. No.CAN 1 of 2023) are allowed. Consequently, the writ petition is allowed, theorder passed under Section 148 and the consequential proceedings are setaside and the mater is restored to the file of the assessing officer. Theassessing officer is directed to serve a copy of the notice issued underSection 148 dated 31[st] March, 2016 in the new address of the appellantwithin 15 days from the date of receipt of server copy of this order. Onreceipt of the said notice, the assessee is directed to submit their replywithin 30 days therefrom and thereafter, after affording an opportunity tothe assessee, the ITO is directed to pass a fresh order on merits and inaccordance with law.CAN 1 of 2023) are allowed. Consequently, the writ petition is allowed, theorder passed under Section 148 and the consequential proceedings are setaside and the mater is restored to the file of the assessing officer. Theassessing officer is directed to serve a copy of the notice issued underSection 148 dated 31[st] March, 2016 in the new address of the appellantwithin 15 days from the date of receipt of server copy of this order. Onreceipt of the said notice, the assessee is directed to submit their replywithin 30 days therefrom and thereafter, after affording an opportunity tothe assessee, the ITO is directed to pass a fresh order on merits and inaccordance with law. 4. The learned senior counsel appearing for the department had submittedthat the penalty demand notice was served through e-mail on 23[rd] June,2017 as well as the earlier notice. The fact remains that the department isaware of the change of the address, which has been clearly noted inthat the penalty demand notice was served through e-mail on 23[rd] June,2017 as well as the earlier notice. The fact remains that the department isaware of the change of the address, which has been clearly noted in paragraph 9 (e) of the affidavit-in-opposition. Therefore, we have nohesitation to hold that the assessee did not have the adequate opportunity to put forth its case. 5. The above direction be complied with within the time frame as mentionedabove.above. 6. Needless to state that since the proceeding was initiated when Section 148of the Act was at the pre-amended stage, the law prevailing on the said datewould apply to the case on hand. of the Act was at the pre-amended stage, the law prevailing on the said datewould apply to the case on hand. 7. No costs. 8. Urgent photostat certified copy of this order, if applied for, be furnished tothe parties expeditiously upon compliance of all legal formalities. the parties expeditiously upon compliance of all legal formalities. (T.S. SIVAGNANAM) CHIEF JUSTICE I agree. (HIRANMAY BHATTACHARYYA, J.) Pallab/KS AR(Ct.)