Munuswamy Mani v. The Assistant Commissioner Of Income Tax National E-Assessment Centre, Delhi Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE M.SUNDAR W.P.No.17686 of 2021 &W.M.P.Nos.18849, 18852 and 18853 of 2021 Munuswamy Mani... Petitioner Vs. 1. The Assistant Commissioner of Income Tax National e-Assessment Centre, Delhi Room No.401, 2[nd] Floor E-Ramp, Jawaharlal Nehru Stadium Delhi – 110 003 2. The Deputy Commissioner of Income Tax Non Corporate Circle – 8(1), Chennai Income Tax Department 121, Nungambakkam High Road Nungambakkam Chennai – 600 034 3. The Principal Commissioner of Income Tax Chennai- 4 Income Tax Department 121, Nungambakkam High Road Nungambakkam Chennai – 600 034... Respondents Writ petition filed under Article 226 of theConstitution of India for issuance of writ ofcertiorarified mandamus calling for the records ofthe writ petitioner company on the file of the FirstRespondent to quash the impugned order dated19.04.2021 passed u/s 143(3) r/w.Sec. 144B of the Actfor the Assessment Year 2018-19 in ITBA/AST/S/143(3)/2021-22/1032517217(1) and consequently direct thefirst respondent to complete the fresh assessment forthe assessment year 2018-19 after granting reasonablehttps://hcservices.ecourts.gov.in/hcservices// sufficient opportunity of hearing. For Respondents : Ms.Hema Muralikrishnan Senior Standing Counsel Captioned writ petition and 'Writ MiscellaneousPetitions' ('WMPs' in plural and 'WMP' in singularfor the sake of brevity) are listed in the admissionBoard i.e., in the Motion List under the cause listcaption 'FOR ADMISSION. Mr.S.Sridhar, learnedcounsel on record for sole writ petitioner is beforethis Virtual Court. 2. Learned counsel for writ petitioner,notwithstanding very many averments and grounds inthe writ affidavit focussed his submission on onepoint and that one point is, 'Assessment Orderdated 19.04.2021 bearing reference ITBA/AST/S/143(3)/2021-22/1032517217(1)' (hereinafter 'impugned order'for the sake of brevity, convenience and clarity) forthe Assessment Year 2018-19 qua the writ petitionerhas been made under Section 143(3) read with Section144B of the Income Tax Act, 1961 ('IT Act' for thesake of clarity) [to be noted, the impugned orderitself says that it has been made under Section 143(3) read with Section 144B of IT Act], the draftAssessment Order (preceding the impugned order) hasbeen digitally signed on 16.04.2021 at 16 hours, butseeks a response by 59 minutes past 23 hours the sameday, resulting in NJP infraction. Scannedreproduction of the last two pages of Assessmentorder is as follows: 3. Learned counsel, adverting to aforesaid lasttwo pages submits that the draft Assessment Ordersays that the writ petitioner / Assessee shouldsubmit his response through registered e-filingaccount by 23.59 hours on the same day i.e.,16.04.2021. This means less than 8 hours has beengiven to the Assessee to submit his response even ifthe time of signing the draft Assessment Order istaken as the reckoning time. However, the uploadingwas little later is learned counsel's say. Thismeans that less than 8 hours has been given for thewrit petitioner to respond and even before the writpetitioner could react, the impugned order came to bemade on 19.04.2021, is his further say. 4. Learned counsel adverting to Section 144B(1)(xvi)(b) read with 144B (7)(vii) submits that anopportunity to show-cause should be given to theAssessee and when such opportunity is provided byserving a notice upon the Assessee, Assessee has theoption of requesting for a personal hearing. 5. Section 144B(1)(xvi)(b) and 144B (7)(vii) ofIT Act read as follows: 'Section 144B(1)(xvi)(b) (b) provide an opportunity to theassessee, in case any variation prejudicialto the interest of assessee is proposed, byserving a notice calling upon him to showcause as to why the proposal variation shouldnot be made; or' ' Section 144B(7)(vii): 4. Learned counsel adverting to Section 144B(1)(xvi)(b) read with 144B (7)(vii) submits that anopportunity to show-cause should be given to theAssessee and when such opportunity is provided byserving a notice upon the Assessee, Assessee has theoption of requesting for a personal hearing. 5. Section 144B(1)(xvi)(b) and 144B (7)(vii) ofIT Act read as follows: 'Section 144B(1)(xvi)(b) (b) provide an opportunity to theassessee, in case any variation prejudicialto the interest of assessee is proposed, byserving a notice calling upon him to showcause as to why the proposal variation shouldnot be made; or' ' Section 144B(7)(vii): (vii) in a case where a variation isproposed in the draft assessment order or finaldraft assessment order or revised draftassessment order and an opportunity is providedto the assessee by serving a notice calling uponhim to show cause as to why the assessment shouldnot be completed as per the such draft or finalorder or revised draft assessment order, theassessee or his authorised representatives, asthe case may be, may request for personal hearingso as to make his oral submissions or present hiscase before the income tax authority in anyunit.' 6. Ms.Hema Muralikrishnan, learned SeniorStanding Counsel for respondents, who was before thisVirtual Court, accepted notice on behalf of all thehttps://hcservices.ecourts.gov.in/hcservices/three respondents. 7. Learned Revenue counsel submitted that Section144B kicked in only on 01.04.2021 and the question asto whether in cases of this nature, the exerciseshould be undertaken under 144B (facelessassessment) or under the erstwhile Section 143(3A)may please be left open. This request is acceded toand the same is left open as this issue need not betested for deciding the case on hand as it turnsentirely on violation of 'Natural Justice Principle'('NJP' for the sake of brevity), which admittedlyapplies to Section 143 (3) also.8. I now embark upon the exercise of discussionand giving my dispositive reasoning. 9. A careful perusal of the aforementionedprovisions of IT Act i.e., Section 144B(1)(xvi)(b)read with Section 144B (7)(vii) makes it clear thatit is ingrained in the statute that whenever avariation is proposed qua draft Assessment Order, ashow-cause /opportunity should be given to Assesseeand when the Assessee is given such an opportunity,the Assessee has the option of requesting for apersonal hearing. In the case on hand, the draftAssessment Order itself has been digitally signedonly at 04.00pm on 16.04.2021, calling upon theAssessee to submit his objections, if any, by 23.59hours on the same day. This is clearly a violationof NJP. At this juncture, learned Revenue counselsubmitted that it has been signed on 15.04.2021, theprevious day. 10. A scanned reproduction supra will demonstratethat it is not clear as to whether it is 15.04.2021or 16.04.2021 as an interrogatory mark issuperimposed qua the digital signature. On ademurrer, even if it is assumed that it was signed on15.04.2021, it is obvious that the time is too shortand it is a clear violation of NJP as requirement isone that is ingrained in the very provisions underwhich the impugned Assessment Order has been made. 11. At the risk of repetition, it is reiteratedthat as already alluded to, the question as towhether the exercise should have been undertakenunder erstwhile Section 143(3A) or under theprovisions now we are concerned with is left open.In this regard, learned revenue counsel in allfairness submitted that even if it is under thehttps://hcservices.ecourts.gov.in/hcservices/erstwhile Section 143(3A), a show-cause notice and an 11. At the risk of repetition, it is reiteratedthat as already alluded to, the question as towhether the exercise should have been undertakenunder erstwhile Section 143(3A) or under theprovisions now we are concerned with is left open.In this regard, learned revenue counsel in allfairness submitted that even if it is under thehttps://hcservices.ecourts.gov.in/hcservices/erstwhile Section 143(3A), a show-cause notice and an opportunity of being heard is statutorily imperative.Therefore, this puts an end to even a possiblecontroversy with regard to the provision of law anddraws the curtains qua the captioned writ petition.12. In the light of the narrative, discussion anddispositive reasoning thus far, the following orderis passed: a) Impugned Assessment Order being orderdated19.04.2021bearingreferenceITBA/AST/S/143(3)/2021-22/1032517217(1) madeby first respondent is set aside.b) Impugned Assessment Order is setaside solely on the ground of infarction of'Natural Justice Principle' ('NJP' for thesake of brevity).c) It follows as a sequitur that noopinion or view has been expressed on themerits of the matter in this order. Thefirst respondent shall recommence theexercise and complete the same in accordancewith law by adhering the NJP requirements asexpeditiously as possible as his businesswould permit and in any event within eightweeks from today i.e., on or before21.10.2021. Captioned writ petition is disposed of with abovedirectives. Consequently, captioned WMPs are alsodisposed of as closed. There shall no order as tocosts. Sd/- //True Copy// Sub Assistant Registrar 1. The Assistant Commissioner of Income Tax National e-Assessment Centre, Delhi Room No.401, 2[nd] Floor E-Ramp, Jawaharlal Nehru Stadium Delhi – 110 003 2. The Deputy Commissioner of Income Tax Non Corporate Circle – 8(1), Chennai Income Tax Department 121, Nungambakkam High Road Nungambakkam Chennai – 600 0343. The Principal Commissioner of Income Tax Chennai- 4 Income Tax Department 121, Nungambakkam High Road NungambakkamChennai – 600 034 +1cc to Ms.Hema Muralikrishnan, Advocate SR.No. 43248W.P.No.17686 of 2021 &W.M.P.Nos.18849, 18852 and 18853 of 2021(CO) A.SK(20.09.2021)