M/S.basf Catalysts India Private Limited v. The Additional / Joint / Deputy / Assistant Commissione Of Income Tax / Income-Tax Officer [“Ao”] National E-Assessment Centre, Delhi

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.10.2021 CORAM THE HON'BLE MR.JUSTICE M.SUNDARW.P.No.23028 of 2021and W.M.P.No.24223 of 2021 M/s.BASF Catalysts India Private Limited,Represented by its Managing Director Mr.Anil Kumar ChoudharyP.No.8/1, Veerapuram Village, Mahindra World City,Chengelpet Taluk, Kancheepuram-603 002,Tamil Nadu, India. ...Petitioner -Vs.- 1. The Additional / Joint / Deputy / Assistant Commissione of Income Tax / Income-tax Officer [“AO”] National e-Assessment Centre, Delhi. 2. Deputy Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Chennai. ...Respondents Writ Petition filed under Article 226 of the Constitution ofIndia praying to issue a Writ of Certiorari, to call for therecords on the file of the first respondent and quash theimpugned order in No.ITBA/AST/F/144C/2021-22/1035979832(1) dated28.09.2021 passed by the first respondent under Section 144C ofthe Income Tax Act 1961, as illegal. For Petitioner : Ms.N.V.LakshmiFor Respondents :Ms.Hema MuralikrishnanSenior standing counselfor Income Tax O R D E R Captioned main writ petition has been filed assailing adraft order under Section 144C of 'The Income-tax Act, 1961 (43 https://hcservices.ecourts.gov.in/hcservices/ of 1961)' [hereinafter 'IT Act' for the sake of brevity] being'draft order dated 28.09.2021 bearing reference DIN & Order No:ITBA/AST/F/144C/2021-22/1035979832(1)' [hereinafter 'impugnedorder' for the sake of convenience and clarity]. 2. Ms.N.V.Lakshmi, learned counsel on record for writpetitioner-assessee, submits that the impugned order waspreceded by a 'show cause notice dated 25.09.2021 bearingreference DIN: ITBA/AST/F/143(3)(SCN)/2021-22/1035883541(1)'[hereinafter 'said SCN' for the sake of convenience andclarity]. To be noted, though said SCN is a notice to showcause, it also contains draft assessment order whereinvariations proposed have been set out. 3. Be that as it may, said SCN has been digitally signed on25.09.2021 at 12:38:01 IST. Assuming, it was uploadedimmediately after being digitally signed, it was obviouslyuploaded well past noon of 25.09.2021. Paragraph No.3 of saidSCN reads as follows: '3. Kindly submit your response through yourregistered e-filing account at www.incometax.gov.in by23:59 hours of 27.09.2021, whereby you may either:-' 4. Learned counsel submits that 25.09.2021 was Saturday,obviously, 26.09.2021 was Sunday which was a holiday and writpetitioner-assessee was left with only one day namely, Monday27.09.2021 and writ petitioner-assessee noticed the said SCNonly on Monday. However, the writ petitioner-assessee sent theirobjections qua draft assessment order on 28.09.2021. This is atpage Nos.67 to 69 of the typed set of papers. A scannedreproduction of objections of writ petitioner-assessee dated28.09.2021 is as follows: 5. Therefore, the short point that has been raised bylearned counsel for writ petitioner-assessee is, inadequate timefor responding to said SCN and impugned order being made postobjections by saying that writ petitioner-assessee has not filedany reply. 6. Ms.Hema Muralikrishnan, learned senior standing counselfor Income-tax accepts notice on behalf of both the respondents.Learned Revenue counsel pointed out that the writ petitioner-assessee was able to send a reply on 28.09.2021, it could haveas well sent a communication on 27.09.2021 requesting for somemore time. It was also submitted by learned Revenue counsel thatthe impugned order is a draft order under Section 144C of IT Actand therefore, objections can even be construed as objections tothe draft. 7. Owing to the short point on which the captioned writpetition turns, with consent of learned counsel on both sides,main writ petition was taken up. 6. Ms.Hema Muralikrishnan, learned senior standing counselfor Income-tax accepts notice on behalf of both the respondents.Learned Revenue counsel pointed out that the writ petitioner-assessee was able to send a reply on 28.09.2021, it could haveas well sent a communication on 27.09.2021 requesting for somemore time. It was also submitted by learned Revenue counsel thatthe impugned order is a draft order under Section 144C of IT Actand therefore, objections can even be construed as objections tothe draft. 7. Owing to the short point on which the captioned writpetition turns, with consent of learned counsel on both sides,main writ petition was taken up. 8. With regard to the submission that communication couldhave been sent on 27.09.2021 requesting for time, it may not benecessary to go into that aspect of the matter in this case, asthe impugned order has been made on the basis that the writpetitioner-assessee has not responded. This means that theresponse of the writ petitioner-assessee sent on 28.09.2021 has not been taken into account in making the impugned order. As faras the objections of writ petitioner-assessee dated 28.09.2021being considered as objections to draft order is concerned, ifthe objections to said SCN are considered as it inter aliapertains to proposed additions, there is every possibility ofdraft order being different. It is made clear that this Courthas not expressed any opinion or view on this aspect of thematter and this Court is only setting out the position that whenan assessee's objections to SCN are considered, owing to theobjections, there can be a change in the draft order, more sowhen it pertains to proposed additions. Therefore, in the factsand circumstances of the case on hand, it cannot be gainsaidthat the objections of writ petitioner-assessee qua said SCN canbe considered as objections to draft order. 9. This Court carefully considered the rival contentions andalso took into account requirements to balance rights andcontentions of assessee as well as Revenue. In this view ofmatter, this Court deems it appropriate to set aside theimpugned order without expressing any opinion on merits anddirecting the Revenue to proceed from the said SCN stage andcomplete the assessment as expeditiously as possible. Toarticulate little more on this, this will protect the interestof Revenue and it will also douse the anxiety of the assesseequa uncertainty. It is in this context that this Court has madeobservations supra regarding balancing rights of Revenue andwrit petitioner-assessee being preserved. Therefore, captionedwrit petition is disposed of by making the following order: (a) Impugned order being order dated 28.09.2021bearing reference DIN & Order No: ITBA/AST/F/144C/2021-22/1035979832(1) is set aside solely on the ground thatwrit petitioner-assessee's objections to 25.09.2021 SCN(given on 28.09.2021) has not been considered; (b) The twin limb qua previous direction is, thisCourt has not expressed any view or opinion on themerits of the matter; (c) The respondent shall now proceed from the saidSCN stage i.e., SCN dated 25.09.2021 bearing referenceDIN: ITBA/AST/F/143(3)(SCN)/2021-22/1035883541(1) quaassessment year 2018-19, considering the response ofwrit petitioner-assessee (at page Nos.67 to 69 of thetyped set of papers) and complete the legal drill ofassessment as expeditiously as the business of therespondent would permit and in any event within sixweeks from today i.e., on or before 07.12.2021; 10. Captioned main Writ Petition is disposed of with the aforementioned directives. Consequently, captioned writmiscellaneous petition is also disposed of as closed. Thereshall be no order as to costs. Sd/- Assistant Registrar(CS-IX) //True Copy// Sub Assistant Registrar nsa/mk To (c) The respondent shall now proceed from the saidSCN stage i.e., SCN dated 25.09.2021 bearing referenceDIN: ITBA/AST/F/143(3)(SCN)/2021-22/1035883541(1) quaassessment year 2018-19, considering the response ofwrit petitioner-assessee (at page Nos.67 to 69 of thetyped set of papers) and complete the legal drill ofassessment as expeditiously as the business of therespondent would permit and in any event within sixweeks from today i.e., on or before 07.12.2021; 10. Captioned main Writ Petition is disposed of with the aforementioned directives. Consequently, captioned writmiscellaneous petition is also disposed of as closed. Thereshall be no order as to costs. Sd/- Assistant Registrar(CS-IX) //True Copy// Sub Assistant Registrar nsa/mk To 1. The Additional / Joint / Deputy / Assistant Commissioner of Income Tax / Income-tax Officer [“AO”] National e-Assessment Centre, Delhi. of Income Tax / Income-tax Officer [“AO”] National e-Assessment Centre, Delhi. 2. Deputy Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Chennai. 121, Mahatma Gandhi Road, Chennai. +1cc to Ms.Hema Muralikrishnan, Advocate, S.R.No.54994 +1cc to Mr.N.V.Balaji, Advocate, S.R.No.55470 AK-II(CO)RGA(29/11/2021) W.P.No.23028 of 2021 and W.M.P.No.24223 of 2021