Srei Equipment Finance Limited v. Additional/Joint/Deputy/Assistant Commissioner Of Income Tax And Others

IN THE HIGH COURT OF JUDICATURE AT CALCUTTACIVIL APPELLATE JURISDICTIONORIGINAL SIDE HEARD ON : 10.05.2022DELIVERED ON : 10.05.2022 CORAM THE HON’BLE MR. JUSTICE T.S. SIVAGNANAM AND THE HON’BLE MR. JUSTICE HIRANMAY BHATTACHARYYA A.P.O.T NO. 77 OF 2022IA NO.GA/1/2022 ARISING OUT OF W.P. NO. 1839 OF 2022 SREI EQUIPMENT FINANCE LIMITED VERSUS ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS. Appearance :-Mr. J.P. Khaitan, Sr. Advocate.Mr. Somak Basu, Advocate. …For the Appellant Mr. Tilak Mitra, Advocate. …For the Respondent Page 1 of 19 JUDGMENT The Judgment of the Court was delivered by T.S. SIVAGNANAM, J. :- We have heard Mr. J. P. Khaitan, learned seniorcounsel appearing with Mr. Somak Basu, learned Advocate for theappellant/assessee and Mr. Tilak Mitra, learned standing counsel for therespondent. 2.The order impugned is dated 13[th] April, 2022 passed in WPO/1839/2022.The appellant had filed the writ petition challenging the notice dated 23[rd] March,2022 which is an opportunity granted to the assessee to show cause as to whythe proposal made in the notice by way of giving effect to the order passed by thePCIT, Kolkata-II under Section 263 of the Income Tax Act, 1961 should not bemade against the appellant/assessee. The assessee had submitted their replydated 26[th] March, 2022 in which the first contention raised by the assessee wasthat the proceedings are liable to be stayed since the assessee has been admittedfor Corporate Insolvency Resolution Process (CIRP) under the Insolvency andBankruptcy Code, 2016 (IBC) and presently the assessee is under moratorium byorders of the National Company Law Tribunal (NCLT). In this regard, theassessee referred to Section 14 of the Code and also extracted the relevantportion of the order passed by the NCLT. In support of such contention, reliancewas placed on the decision of the Hon’ble Supreme Court in Alchemist AssetReconstruction Company vs. Hotel Gaudavan (P) Ltd. & Ors. reported in (2017) 88taxmann.com 202 (SC) and the decision in the case of Mr. Rajendra K. Bhutta vs. Maharashtra Housing and Area Development Authority & Anr. (Civil AppealNo.12248 of 2018 dated 19.02.2020) and the other decisions of the Income TaxAppellate Tribunal, Delhi Bench and also the Securities Appellate Tribunal.Further, the assessee contended that in terms of Section 238 of the Code, theprovisions of the Code shall override the provisions of the Income Tax Act andreference was also made to Section 178 of the Income Tax Act, which alsoprovides that the Section shall override all other laws for the time being in forceexcept the Insolvency and Bankruptcy Code (IBC). In support of suchcontention, reliance was placed on the decision of the Hon’ble Supreme Court inPCIT vs. Monnet Ispat and Energy Ltd. reported in (2018) SCC Online SC 984.Therefore, the assessee requested the assessing officer to keep the proceedings inabeyance till the completion of the CIRP. Without prejudice to such submission,the assessee also dealt with the merits of the proposed assessment. In thepenultimate paragraph of the explanation, the assessee requested for grant ofopportunity of personal hearing in view of Clause (VI) to (IX) of Section 144B(7) ofthe Income Tax Act, 1961. 3.Thereafter, the assessee filed the writ petition being WPO/1839/2022challenging the show cause notice dated 23[rd] March, 2022. After filing the writpetition the assessee sent a letter to the Authority on 29[th] March, 2022 pointingout that similar proceedings, under Section 263 of the Act for the assessmentyear 2016-17, have been initiated against the assessee by the PCIT-II which isalso time barring on 31[st] March, 2022 and notice dated 8[th] March, 2022 wasreceived by the assessee for initiating assessment proceedings under Section 3.Thereafter, the assessee filed the writ petition being WPO/1839/2022challenging the show cause notice dated 23[rd] March, 2022. After filing the writpetition the assessee sent a letter to the Authority on 29[th] March, 2022 pointingout that similar proceedings, under Section 263 of the Act for the assessmentyear 2016-17, have been initiated against the assessee by the PCIT-II which isalso time barring on 31[st] March, 2022 and notice dated 8[th] March, 2022 wasreceived by the assessee for initiating assessment proceedings under Section 143(3) read with Section 263 of the Act for the said assessment year 2016-17 andin response to such notice a similar request was made by the assessee to thePCIT-II to keep the impugned proceedings in abeyance till the completion ofCIRP. PCIT-II, vide order dated 23[rd] March, 2022 had kept the proceedings inabeyance. 4.Though the assessee had requested for an opportunity of personal hearingin their reply dated 26[th] March, 2022, it appears that the same was not affordedbut “so called hearing” is stated to have been conducted by way of exchanging ofmessages in the chat box. The assessee vide letter dated 29[th] March, 2022pointed out that due to technical issues the personal hearing could not beconducted through video conferencing and requested for an opportunity ofeffective hearing be afforded to the assessee. The assessing officer did not sendany reply to the said communication, however, proceeded to pass the assessmentorder dated 30[th] March, 2022. Soon after receiving the said order, the assesseefiled a supplementary affidavit before the writ Court bringing on record before thelearned writ Court about the assessment order passed during the pendency ofthe writ petition. The learned Single Bench had dismissed the writ petition bythe impugned order dated 13[th] April, 2022. 5.On going through the impugned order we find that the issue as to whetherthe proceedings had to be kept in abeyance by the assessing officer in the light ofthe insolvency proceedings which were pending and the effect of Section 14 of theCode have not been dealt with though that was the core issue which wascanvassed in the writ petition. The learned writ Court was of the opinion that the case of the assessee cannot be a case of violation of principles of the naturaljustice as the assessee had participated in the assessment proceedings and theywanted to challenge the assessment order before the writ Court. In ourconsidered view there is a slight mistake on facts because the assessee hadimpugned the assessment order dated 30[th] March, 2022 by way of asupplementary affidavit since this assessment order was passed during thependency of the writ petition. In the writ petition, what was impugned was theshow cause notice dated 23[rd] March, 2022. As pointed out earlier, in response tothe show cause notice, the assessee had specifically raised the legal issue withregard to the effect of the provisions of the IBC and without prejudice to the saidsubmission, the assessee also submitted their reply on the merits on theproposed assessment which the assessing officer proposed to pass. Moreimportantly, the assessing officer also pointed out that in the assessee’s owncase, the PCIT-II had acceded to a similar request and kept the proceedings inabeyance by an order dated 26[th] March, 2022 in view of the order passed by theNCLT dated 8[th] October, 2021. This is precisely the request which the assesseemade with the assessing officer who appears to have brushed aside such request.6.On going through the assessment order dated 23[rd] March, 2022, which, infact, is an ex parte assessment order, it appears that the assessing officerdiscussed the effect of Section 14 of the IBC and rendered certain opinion on theeffect of certain provisions of the IBC. We observe that the assessment order isan ex parte assessment order because the request made by the assessee forpersonal hearing was not granted but the personal hearing appears to have been conducted by way of exchange of chat messages. It is not clear as to how suchan opportunity can be said to be an effective opportunity to the assessee. Theassessing officer failed to understand that opportunity of personal hearing shouldbe meaningful and it is not an empty formality. These basic legal tenets have notbeen noted by the assessing officer. In any event, the assessing officer wasrequired to take note of the judicial pronouncements which were referred to andrelied upon by the assessee in their reply dated 26[th] March, 2022. We find thatthere is no reference or discussion on those aspects. Therefore, we are of theclear view that the assessing officer committed grave error in proceeding tocomplete the assessment and pass the order dated 30[th] March, 2022 and refusedto stay the proceedings till the completion of the Insolvency Resolution Process. 7.At this juncture, it would be important to note the decision the Hon’bleSupreme Court in the case of Alchemist Asset Reconstruction Company (supra),wherein the Hon’ble Supreme Court had pointed out that the mandate of the newinsolvency Code is that the moment an insolvency petition is admitted, themoratorium that comes into effect under Section 14(1)(a) expressly interdictsinstitution or continuation of pending suits or proceedings against corporatedebtors. This legal principle should have been borne in mind by the assessingofficer before he proceeded to pass the assessment order. Therefore, we are ofthe clear view that the assessment order dated 30[th] March, 2022 has to be setaside and the matter has to be restored to the file of the assessing officer and thematter shall be kept in abeyance till the completion of the insolvency resolutionproceedings. 8.In the penultimate portion of the order, the learned writ Court whiledismissing the writ petition has imposed cost of Rs.10,000/- on Mr. SomakBasu, learned Advocate. The learned writ Court was of the opinion that the costsneed to be imposed because of his rude behaviour in the Court and addressingthe Chair in a disrespectful manner. In the appeal, several grounds have beenraised on this very particular issue. Mr. Basu, learned Advocate has appearedbefore us and submitted that he had not uttered any disrespectful expression tothe Court and his endeavour was to persuade the Court by beseeching the Courtto consider Sections 14 and 238 of the IBC and the relevant judgments of theHon'ble Court. Furthermore, Mr. Basu would submit that it was his endeavourto bring to the notice of the Hon’ble Court that there has been gross violation ofprinciples of natural justice and the assessing officer, during the pendency of thewrit petition, without acceding to the request for deferment of the proceedings,had completed the assessment and passed the assessment order dated 30[th]March, 2022. On this issue, we need to take note of the situation of similarnature which had received the attention of the Hon’ble Supreme Court. In thisregard, we rely upon the decision of the Hon’ble Supreme Court in Neeraj Gargvs. Sarita Rani & Ors. reported in (2021) 9 SCC 92. The appeal before theHon’ble Supreme Court was by a practising lawyer before the High Court ofUttarakhand with around 17 years standing in the Bar. In the appeal, he soughtfor expunging certain observations made against him by the learned Judge of theHigh Court while deciding four cases in which the appellant therein wasrepresenting one of the contesting parties. We find from paragraph 4 of the Page 7 of 19 judgment, the learned Court had made certain observations against the saidAdvocate expressing its deep anguish and also making observation that therewas suppression of material facts. However, in the case on hand, there is nosuch finding recorded by the learned single Bench except to state that thesubmission of Mr. Basu was rude and disrespectful in the opinion of the learnedSingle Bench. The Hon’ble Supreme Court, after considering the facts in detail,had made the following observations: Page 7 of 19 judgment, the learned Court had made certain observations against the saidAdvocate expressing its deep anguish and also making observation that therewas suppression of material facts. However, in the case on hand, there is nosuch finding recorded by the learned single Bench except to state that thesubmission of Mr. Basu was rude and disrespectful in the opinion of the learnedSingle Bench. The Hon’ble Supreme Court, after considering the facts in detail,had made the following observations: “15. While it is of fundamental importance in the realm of administrationof justice to allow the Judges to discharge their functions freely andfearlessly and without interference by anyone, it is equally important forthe Judges to be exercising restraint and avoid unnecessary remarks onthe conduct of the counsel while may have no bearing on the adjudicationof the dispute before the Court. 16.Having perused the offending comments recorded in the High Courtjudgments, we feel that those could have been avoided as they wereunnecessary for deciding the disputes. Moreover, they appear to bebased on the personal perception of the learned Judge. It is alsoapparent that the learned Judge did not, before recording the adversecomments, give any opportunity to the appellant to put forth hisexplanation. The remarks so recorded have cast aspersion on theprofessional integrity of the appellant. Such condemnation of the counselwithout giving him an opportunity of being heard would be a negation ofthe principles of audi alteram partem. The requisite degree of restraintand sobriety expected in such situations is also found to be missing inthe offending comments. 17. The tenor of the remarks recorded against the appellant will not onlydemean him amongst his professional colleagues but may also adverselyimpact his professional career. If the comments remain unexpunged inthe Court judgments, it will be a cross that the appellant will have tobear, all his life. To allow to suffer thus, would in our view be prejudicialand unjust.” 9.As pointed out by the Hon’ble Supreme Court making strong observationsagainst the counsel appearing for a party without opportunity of being heard,would negate the principles of audi alteram partem. Further, the Hon’bleSupreme Court had pointed out that there should be requisite degree of restraintand sobriety on the part of the Court. Further, the Hon’ble Supreme Court hasheld that if the comments remain unexpunged in the Court’s judgment, it will bea “cross” that the appellant will have to bear all his life and to allow him to suffer,would be prejudicial and unjust. As pointed out by us, the learned Single Benchwhile deciding the writ petition had not advertedto the grounds of challengemade by the appellant questioning the show cause notice and proceeded todismiss the writ petition on the ground that there is no violation of principles ofnatural justice. 10.We do not agree with the said finding for more than one reason. Firstly,the assessing officer after receipt of the reply dated 26[th] March, 2022 did nothear the assessee on the issue relating to the effect of IBC. The so called hearingby way of exchange of chat messages cannot satisfy the test of fairness or the testembodied in the principles of fair play. That apart, the assessing officer was so adamant and he even failed to take note of the order passed by the PCIT-II, whohad acceded to similar request made on behalf of the assessee for a laterassessment year which was pending on the file of the PCIT-II under Section 263of the Act. Therefore, we are of the considered view that the observations madeagainst the learned Advocate appearing for the appellant/assessee were notrequired in the facts and circumstances of this case. adamant and he even failed to take note of the order passed by the PCIT-II, whohad acceded to similar request made on behalf of the assessee for a laterassessment year which was pending on the file of the PCIT-II under Section 263of the Act. Therefore, we are of the considered view that the observations madeagainst the learned Advocate appearing for the appellant/assessee were notrequired in the facts and circumstances of this case. 11.While on this issue we take note of the decision of the High Court ofJudicature of Madras in the case of Director General of Income Tax (INV.) andOthers vs. T. S. Kumaraswamy, Proprietor, Christy Friedgram Industry and Othersreported in 2019 SCC Online Mad 5453. The said appeal filed by the Income TaxDepartment was directed against certain adverse remarks made against theofficer of the Income Tax Department and their senior standing counsel. The firstobjection which was raised was by the writ petitioner/assessee that he should beheard in the matter. This was rejected by the following decisions of the Hon’bleSupreme Court as the writ petitioner/assessee was not concerned with thesubject in issue and, therefore, no notice was required to be issued to theassessee. The next aspect of the matter is whether the observations/remarksmade by the learned Single Judge against the officer of the Department and thesenior standing Counsel are required to be expunged or not. In this regard theCourt noted the following decisions of the Hon’ble Supreme Court. “15.In the case of State of U.P. v. Mohammed Naim [reported in AIR 1964SC 703], the Hon'ble Supreme Court pointed out that it had been judiciallyrecognized that in the matter of making disparaging remarks against persons or authorities, whose conduct comes into consideration beforecourts of law in cases to be decided by them, it is relevant to consider:—(a) whether the party whose conduct is in question is before thecourt or has an opportunity of explaining or defending himself; (b) whether there is evidence on record bearing on that conductjustifying the remarks; and (c) whether it is necessary for the decision of thecase, as an integral part thereof, to animadvert on that conduct. 16. It was further pointed out that it had also been recognized that judicialpronouncements must be judicial in nature and should not normally departfrom sobriety, moderation and reserve. 17. In the decision in the case of Niranjan Patnaik v. Sashibhushan Kar[reported in (1986) 2 SCC 569], after referring to the decision in the case ofMohammed Naim, the Hon'ble Supreme Court pointed out that it is settledlaw that harsh and disparaging remarks are not to be made againstpersons and authorities, whose misconduct comes into consideration beforecourts of law unless it is really necessary for the decision of the case as anintegral part thereof to animadvert on that conduct. Accordingly, the Hon'bleSupreme Court held that the adverse remarks against the appellant thereinwere neither justified nor called for. It was further pointed out that higherthe forum and greater the powers, the greater the need for restraint and themore mellowed reproach should be. 18. In the decision in the case of A.M. Mathur v. Pramod Kumar Gupta[reported in (1990) 2 SCC 533], the former Advocate General of the State ofMadhya Pradesh filed an appeal to expunge certain derogatory remarksmade against him by the High Court. The Hon'ble Supreme Court pointedout that judicial restraint might better be called judicial respect i.e. respectby the Judiciary; respect to those, who come before the court as well as to other coordinate branches of the State, the Executive and the Legislature,that there must be mutual respect and that when these qualities fail orwhen litigants and public believe that the Judge had failed in thesequalities, it will be neither good for the Judge nor for the judicial process.Ultimately, the remarks made against the former Advocate General wereexpunged. 18. In the decision in the case of A.M. Mathur v. Pramod Kumar Gupta[reported in (1990) 2 SCC 533], the former Advocate General of the State ofMadhya Pradesh filed an appeal to expunge certain derogatory remarksmade against him by the High Court. The Hon'ble Supreme Court pointedout that judicial restraint might better be called judicial respect i.e. respectby the Judiciary; respect to those, who come before the court as well as to other coordinate branches of the State, the Executive and the Legislature,that there must be mutual respect and that when these qualities fail orwhen litigants and public believe that the Judge had failed in thesequalities, it will be neither good for the Judge nor for the judicial process.Ultimately, the remarks made against the former Advocate General wereexpunged. 19. In the decision in the case of State of Bihar v. P.P. Sharma [reported in1992 Supp (1) SCC 222], the Hon'ble Supreme Court held that it is settledlaw that the person, against whom mala fides or bias was imputed, shouldbe impleaded conominee as a party respondent to the proceedings andgiven an opportunity to meet those allegations and that in his/her absence,no enquiry into the allegations would be made otherwise it itself is violativeof the principles of natural justice, as it amounts to condemning a personwithout opportunity. 20. In the decision in the case of Dr. Dilipkumar Deka v. State of Assam[reported in (1996) 6 SCC 234], the Hon'ble Supreme Court referred to thedecision in the case of Mohammed Naim, which was quoted with approval inthe decisions in the cases of: (i) Jage Ram, Inspector of Police v. Hans Raj Midha [reported in (1972) 1 SCC181 : AIR 1972 SC 1140], (ii) R.K. Lakshmanan v. A.K. Srinivasan [reported in (1975) 2 SCC 466 : AIR1975 SC 1741] and (iii) Niranjan Patnaik v. Sashibhusan Kar [reported in (1986) 2 SCC 569 : AIR1986 SC 819]. 21. It was pointed out that in spite of the above catena of decisions, thelearned Judge did not, before making the remarks, give any opportunity tothe appellants therein, who were, admittedly, not parties to the revision petition to defend themselves. It was further pointed out that it cannot begainsaid that the nature of remarks the learned Judge made, cast a seriousaspersion on the appellants affecting their character or reputation and mayultimately affect their career also. The Hon'ble Supreme Court ultimately heldthat the Court should have used a temperate language and moderateexpressions while criticising the appellants therein and shown judiciousrestraint, allowed the appeal and quashed the disparaging remarks madeagainst the appellants therein. 22. In the decision in the case of State of Karnataka v. Registrar General,High Court of Karnataka [reported in (2000) 7 SCC 333], the challenge wasto an order passed by the Division Bench of the High Court of Karnataka on the groundthat it went outside the scope of the lis before it and made certainobservations, which are not in tune with the perceptions of judicial exercise.The Hon'ble Supreme Court, at the very outset, pointed out that for disposalof the said appeal, there was no necessity to issue notice to the solerespondent therein namely the Registrar General of the High Court ofKarnataka, as he would have nothing to say about the impugned directionsand therefore disposed of the matter without bringing the respondent thereinbefore the Court. 23. As pointed out by us earlier, the cases on hand are also on the samepedestal, as the respondent herein - writ petitioner/assessee can saynothing about the remarks made by the learned Single Judge against theofficer of the appellant Department and their Senior Standing Counsel. 24. Reverting back to the decisions, the Hon'ble Supreme Court in the case ofState of Karnataka v. Registrar General, High Court of Karnataka, referred tothe decision in the case of Mohammed Naim and other decisions and set aside the directions/remarks made by the Division Bench of the High Courtof Karnataka. 23. As pointed out by us earlier, the cases on hand are also on the samepedestal, as the respondent herein - writ petitioner/assessee can saynothing about the remarks made by the learned Single Judge against theofficer of the appellant Department and their Senior Standing Counsel. 24. Reverting back to the decisions, the Hon'ble Supreme Court in the case ofState of Karnataka v. Registrar General, High Court of Karnataka, referred tothe decision in the case of Mohammed Naim and other decisions and set aside the directions/remarks made by the Division Bench of the High Courtof Karnataka. 25. In the decision in the case of Manish Dixit v. State of Rajasthan [reportedin (2001) 1 SCC 596], the Hon'ble Supreme Court pointed out that it hadrepeatedly cautioned that before any castigating remarks are made by thecourt against any person, particularly when such remarks could ensueserious consequences on the future career of the person concerned, heshould have been given an opportunity of being heard in the matter inrespect of the proposed remarks or strictures and that such an opportunity isthe basic requirement, for, otherwise the offending remarks would be inviolation of the principles of natural justice. After referring to the earlierdecision in the case of Dr. Dilipkumar Deka, the appeal was allowed and thedisparaging remarks were expunged. 26. In the decision in the case of State of Gujarat v. K.V. Joseph [reported in(2001) 2 SCC 156], the Court, while quashing the remarks made, observedthat there is violation of the principles of natural justice, as no notice wassent in the matter for the purpose of any explanation neither any explanationobtained and consequently, held that the remarks cannot be sustained. 27. In the decision in the case of Testa Setalvad v. State of Gujarat [reportedin (2004) 10 SCC 88], the Court, while setting aside the observations made,held that the observations did not, prima facie, appear to have any relevanceto the subject matter of dispute before the High Court and uncalled forobservations were directed to be set aside. It was also held that they mustbe treated as having never existed or been part of the High Court judgment. 28. In the decision in the case of Samya Sett v. Shambu Sarkar [reported in(2005) 6 SCC 767], the Hon'ble Supreme Court, in the opening paragraph of the judgment, pointed out that the appeal reminded them of a golden advicegiven by the Supreme Court before more than four decades in the decision inthe case of Mohammed Naim and proceeded to consider the question as towhether the remarks could be sustained. The Hon'ble Supreme Courtultimately held that the remarks were uncalled for and unwarranted andwere accordingly quashed. 29. In the decision in the case of Public Concern for Governance Trust, wherethe appeal was filed by the State to expunge the remarks against the thenChief Minister, the appeal was held to be maintainable and the seriousaspersions cast on the then Chief Minister affecting his reputation havingbeen made without giving an opportunity were quashed. 30. In the decision in the case of Parkash Singh Teji v. Northern India GoodsTransport Company Private Limited [reported in (2009) 12 SCC 577], theHon'ble Supreme Court, while pointing out about the judicial restraint anddiscipline, referred to the decision in the case of ‘K’, a Judicial Officer, In re,[reported in (2001) 3 SCC 54] wherein it was held that the overall test is thatcriticism or observation must be judicial in nature and should not formallydepart from sobriety, moderation and reserve. 31. In the decision in the case of Amar Pal Singh v. State of Utter Pradesh[reported in (2012) 6 SCC 491], the Court made observations as to how theSuperior Court has to employ the language in a judgment and on facts,having found that the said procedure had not been followed, the Hon'bleSupreme Court expunged the remarks made therein. 31. In the decision in the case of Amar Pal Singh v. State of Utter Pradesh[reported in (2012) 6 SCC 491], the Court made observations as to how theSuperior Court has to employ the language in a judgment and on facts,having found that the said procedure had not been followed, the Hon'bleSupreme Court expunged the remarks made therein. 32. In the decision in the case of Om Prakash Chautala v. Kanwar Bhan[reported in (2014) 5 SCC 417], the Hon'ble Supreme Court pointed out thatreputation is fundamentally a glorious amalgam and unification of virtues, which makes a man feel proud of his ancestry and satisfies him to bequeathit as a part of inheritance on the posterity. It was further observed that it is anobility in itself, for which, a conscientious man would never barter it with allthe tea of China or for that matter all the pearls of the sea, that the saidvirtue has both horizontal and vertical qualities and that when reputation ishurt, a man is half-dead. 33. In the decision in the case of Arun Devendra Oza v. State of Gujarat[reported in (2001) 10 SCC 195], once again the Hon'ble Supreme Courtreferred to the celebrated decision in the case of Mohammed Naim and setaside the adverse remarks made against the appellant therein. 34. In the decision in the case of Lanka Venkateswarlu v. State of AndhraPradesh [reported in (2011) 4 SCC 363], the Hon'ble Supreme Court referredto the decision in the case of Mohammed Naim and observed that the use ofunduly strong intemperate or extravagant language in a judgment has beenrepeatedly disapproved by the Supreme Court in several cases. 35. In the decision in the case of Badri Prasad Mathur v. Administrator,Nagpur Palika Parishad [reported in 1996 MPLJ 746], the appeal was filedby a party to the litigation to expunge the remarks made against his counsel.The appeal was held to be maintainable and the Court, after referring to thecelebrated decision in the case of Mohammed Naim and other decisions,allowed the appeal and expunged the remarks. 36. In the decision in the case of Shyam Narayan Tripathi v. State of M.P.[reported in 2001 (2) MPLJ 234], a petition was filed under Section 482 of theCriminal Procedure Code to expunge the remarks made against theadvocate, who had filed a memo before the Court seeking for anadjournment on the ground of illness. This memo was rejected by the Court and certain remarks were made against the advocate. The remarks, havingbeen made without notice or opportunity to the concerned advocate, wereheld to be bad, apart from holding that the remarks were unjustified anduncalled for and therefore, liable to be expunged. 37. In the decision a learned Single Judge of this Court in the case of T.Vetriselvan v. Tamil Nadu Mercantile Bank Limited [reported in 2002 (1) CTC513], one of the questions, which fell for consideration is as to the what wasthe effect of an opinion given by a counsel to a party. It was held that theopinion given by a counsel was mainly based upon the records produced byhis client and that the plaintiff had no right whatsoever to question the sameor find fault with the opinion. 38. In the decision in the case of K. Ponnammal v. A. Loganathan [reportedin 2010 (2) CTC 63], a learned Single Judge of this Court referred to Section126 of the Indian Evidence Act and held that this protective umbrella also saves the counselfrom unwanted and unnecessary proceedings”. 12.After referring to the above decisions the Court pointed out that thelearned Single Judge therein, before making remarks did not give anyopportunity to the appellant therein who were not parties to the writ petition todefend themselves. The decision of the Hon’ble Supreme Court in the case ofState of Karnataka v. Registrar General, High Court of Karnataka [reported in(2000) 7 SCC 333],was also noted. Further, the court noted the decision inManish Dixit v. State of Rajasthan [reported in (2001) 1 SCC 596] wherein theSupreme Court pointed out and cautioned that before any ex parte remark ismade by the Court against any person, particularly, when such remarks could Evidence Act and held that this protective umbrella also saves the counselfrom unwanted and unnecessary proceedings”. 12.After referring to the above decisions the Court pointed out that thelearned Single Judge therein, before making remarks did not give anyopportunity to the appellant therein who were not parties to the writ petition todefend themselves. The decision of the Hon’ble Supreme Court in the case ofState of Karnataka v. Registrar General, High Court of Karnataka [reported in(2000) 7 SCC 333],was also noted. Further, the court noted the decision inManish Dixit v. State of Rajasthan [reported in (2001) 1 SCC 596] wherein theSupreme Court pointed out and cautioned that before any ex parte remark ismade by the Court against any person, particularly, when such remarks could Page 17 of 19 eschew serious consequences on the future career of the person, he should begiven an opportunity of being heard in the matter in respect of the proposedremarks or strictures otherwise the adverse remark would be in violation of theprincipals of natural justice. On similar grounds the adverse remarks werequashed by the Hon’ble Supreme Court in the case of State of Gujarat Vs. K.V.Joseph reported in 2001 (2) SCC 156, Testa Setalvad v. State of Gujarat [reportedin (2004) 10 SCC 88] and also in Samya Sett v. Shambu Sarkar [reported in(2005) 6 SCC 767]. The legal principle was culled out in the following paragraphs: “37. In the decision a learned Single Judge of this Court in the case of T.Vetriselvan v. Tamil Nadu Mercantile Bank Limited [reported in 2002 (1)CTC 513], one of the questions, which fell for consideration is as to thewhat was the effect of an opinion given by a counsel to a party. It was heldthat the opinion given by a counsel was mainly based upon the recordsproduced by his client and that the plaintiff had no right whatsoever toquestion the same or find fault with the opinion. 38. In the decision in the case of K. Ponnammal v. A. Loganathan [reportedin 2010 (2) CTC 63], a learned Single Judge of this Court referred to Section126 of the Indian Evidence Act and held that this protective umbrella alsosaves the counsel from unwanted and unnecessary proceedings. 39.The legal principle that can be culled out from the above decisions isthat unwarranted comments and remarks were not called for and whatwas important to bear in mind was as to whether the three cardinal testslaid down by the Hon'ble Supreme Court in the decision in the case ofMohammed Naim had been complied with. One of those three tests is as towhether the party, whose conduct is in question is before the court or has an opportunity of explaining or defending himself. In the instant case,neither the officer of the Department nor its Senior Standing Counsel had anopportunity of explaining or defending themselves. Therefore, the first testlaid down in the decision in the case of Mohammed Naim has not beenfulfilled in the instant case”. 13. 13.The above decision would render full support to our conclusion that theadverse observation made against the learned Advocate for theappellant/assessee and the imposition of cost has to be expunged/set aside. 14.In the result, the appeal is allowed. The assessment order dated 30[th]March, 2022 is set aside and the matter is restored to the file of the assessingofficer and the matter shall be kept in abeyance till the completion of theinsolvency resolution proceedings. Soon after the proceedings are completed, theassessee shall inform, in writing, to the assessing officer in that regard. In thelight of the observations made by us and taking note of the judgment of theHon’ble Supreme Court in the Neeraj Garg (supra) the adverse observations andcomments made against the learned Advocate for the appellant/assessee standexpunged in its entirety and the imposition of costs stands vacated. Theapplication for stay being IA No.GA/1/2022 stands closed. No costs. (T.S. SIVAGNANAM, J.) I Agree. (HIRANMAY BHATTACHARYYA, J.) S.Das/A/s.