M/S.oasys Cybernetics Private Limited v. Assistant Commissioner Of Income Tax,Corporate Circle 5(1)

DATED: 29.03.2019 CORAM THE HON'BLE Dr. JUSTICE ANITA SUMANTHW.P.No.9201 of 2019andW.M.P.Nos.9749, 9751, 9753 and 9756 of 2019 M/s.Oasys Cybernetics Private Limited,Represented by its authorised signatory,Mr.E.Venkatakrishnaiah,Having Office atNo.99, M.N.Complex, II Floor,Greams Road, Chennai – 600 006....Petitioner --Vs-- Assistant Commissioner of Income Tax,Corporate Circle 5(1),No.121, Mahatma Gandhi Road,Nungambakkam, Chennai – 600 034....Respondent PRAYER in WP: Writ Petitions filed under Article 226 of theConstitution of India praying for a writ of CertiorarifiedMandamus to call for the records of the respondent contained inits order bearing reference no.ACIT/CC-5(1)/2018-19, dated18.03.2019 with respect to PAN: in respect of AY2016-17 and quash the same as arbitrary, illegal and unjust andto consequently direct the Respondents or any of theirsubordinates, agents, representatives or any other personclaiming under/through the Respondents to refrain from in anymanner seeking to enforce and/or initiate recovery proceedingspursuant to the Respondent's Notice of Demand bearingNo.ITBA/AST/S/156/2018-19/1014633458(1) dated 28.12.2018 forPAN: AACCO2848M in respect of AY 2016-17. For Petitioner: Mr.Suhrith Parthasarathy For Respondent: Mrs.Hema MuralikrishnanStanding counsel This Writ Petition has been filed challenging theorder of the respondent dated 18.03.2019 in referenceNo.ACIT/CC-5(1)/2018-19 with respect to PAN: inrespect of AY 2016-17 and to quash the same and to consequentlydirect the Respondent to refrain from in any manner seeking toenforce and/or initiate recovery proceedings pursuant to theRespondent's Notice of Demand bearing No.ITBA/AST/S/156/2018-19/1014633458(1) dated 28.12.2018 for PAN: in respectof AY 2016-17. 2. The Writ Petitioner in W.P.No.4310 of 2019 is againbefore me in the present Writ Petition, challenging an orderdated 18.03.2019, rejecting the stay petition passed in respectof the disputed demand for the Assessment Year 2016-2017. WritPetition No.4310 of 2019 was disposed of on 08.03.2019,directing the petitioner to appear before the Assessing Officeron 15.03.2019 at 2.30 P.M. and directing the officer tothereafter pass appropriate orders in the application for stayafter hearing the petitioner and considering the materialsplaced by it in support of the request for stay, within a periodof two weeks thereafter i.e, on or before 29.03.2019. 3. While this is so, the Petitioner has now come up with thepresent writ petition contending that the Assessing Officer haspassed the impugned order on 18.03.2019, even without hearingit, as specifically directed by this Court in W.P.No.4310 of2019 on 08.03.2019. The impugned order reads as follows: "Your stay petition dated 11.01.2019 hasbeen carefully been reconsidered as per thedirections of the Hon'ble High Court. You were given notice u/s. 143 (2) becausethe case had got selected for scrutiny on22.06.2017 for which you had asked foradjournment. Subsequently, on 18/07/2018,notice u/s.142(1) was issued to you asking fordetails pertaining to the assessment for whichthere was no response. This irresponsiveness continued and therewas no response for another reminder on03/08/2018. Further notice was sent on 29/10/2018 forwhich you furnished basic particulars and not specific details as required in the noticeu/s.142(1) dated 29/10/2018. A show-cause notice was sent on 19/11/2018asking you to furnish the details as specifiedin the questionnaire dated 29/10/2018 forwhich there was no response. A final show-cause notice was sent on27/11/2018 fixing final hearing on 30/11/2018as the case was getting time barred, where itwas specified that any failure will constrainthe office to complete the assessment based ona available records. Further notice was sent on 29/10/2018 forwhich you furnished basic particulars and not specific details as required in the noticeu/s.142(1) dated 29/10/2018. A show-cause notice was sent on 19/11/2018asking you to furnish the details as specifiedin the questionnaire dated 29/10/2018 forwhich there was no response. A final show-cause notice was sent on27/11/2018 fixing final hearing on 30/11/2018as the case was getting time barred, where itwas specified that any failure will constrainthe office to complete the assessment based ona available records. On 26/12/2018, a final show-cause noticewas issued to you, where it was made clearthat non complaince on 27/12/2018, wouldresult in completion of assessment based onestimate basis at income being taken as 8% ofSales Turnover i.e at Rs.23,94,81,675/-. Since there was non compliance on27/11/2018 and since the case was getting timebarred on 31/12/2018, the assessment wascompleted on 28/12/2018, estimating the incomeat 8% of total turnover. " It is a common practice in Income Taxproceedings to estimate the income at 8% ofgross receipts in absence of submissions fromthe assessee. Therefore, your contention thatthe demand of Rs.23,94,81,675/- has beenraised without basis is incorrect. The instructions of CBDT through circularsno.96 dated 21/08/1969 and CBDT instructionsno.1914 of 1993 is over ridden by partialmodifications of instruction no.1914 of 1996for stay of demand on payment of 20% of thedisputed demand. Therefore, you are require toremit 20% of the disputed demand as you havegone on appeal in order to get a stay oncollection of the demand. The case laws quotedby you do not apply for this case because theaddition is based on estimate basis because ofyour failure to submit particulars during thecourse of assessment. Hence, your contentionthat the assessment fails to accord any reasons/basis for adding 8% of the grossreceipts to our total income does not holdgood. Your stay petition is therefore rejected and disposed off accordingly." 4. Prima facie, the order is reasonably speaking and I amnot inclined to interfere in it at all, except for the fact thatthere is no reference therein to having heard the petitioner asper the directions of this Court. This assumes significance inthe light of the specific averment of the petitioner in theaffidavit as well as orally made before me to the fact that thepetitioner had appeared before the Assessing Authority on15.03.2019, at 2.30 P.M. as directed and waited till 4.30 P.M.Since it was informed that the Assessing Officer was not inoffice, the petitioner submitted a letter dated 15.03.2019narrating the aforesaid facts, along with a written submissionreceived and acknowledged by the respondent. The said letterand written submission with seal of acknowledgement is producedbefore the Court. 5. Since the impugned order does not specifically refer tothe factum of appearance or otherwise by the petitioner I amconstrained to set aside the present order and direct theAssessing officer to grant one more opportunity of hearing tothe petitioner. Accordingly, the petitioner will appear beforethe Assessing Officer on 01.04.2019 at 10.30 A.M. and afterhearing the petitioner, orders will be passed on the saidapplication, in accordance with law. 6. This Writ Petition is disposed of with the abovedirections. No costs. Consequently, connected MiscellaneousPetitions are closed. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar arr/tsgToAssistant Commissioner of Income Tax,Corporate Circle 5(1),No.121, Mahatma Gandhi Road,Nungambakkam, Chennai – 600 034. +1 cc to M/s.Hema Muralikrishnan, Advocate Sr.No.30716 +1 cc to M/s.Arun karthik Mohan, Advocate Sr.No.30419 W.P.No.9201 of 2019 andW.M.P.Nos.9749, 9751, 9753 and 9756 of 2019 SSV(CO)CSL/27.05.2019