Srinidhi Karti Chidambaramw/O Karti.p.chidambaram v. Https://Hcservices.ecourts.gov.in/Hcservices

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :28.07.2021 CORAM THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM W.P.Nos.15125, 15129, 15695, 15713, 15717 & 15720 of 2021andW.M.P.Nos.16028, 16031, 16594, 16595, 16616, 16617, 16613, 16615, 16621 & 16622 of 2021 KARTI.P.CHIDAMBARAM AGED ABO UT 49 YEARS S/O.P.CHIDAMBARAM,NO.16 PYCROFTS GARDEN ROAD,NUNGAMBAKKAM,CHENNAI- 600 006. ...PETITIONER IN W.P.NOS.15125, 15695, 15713, 15717 AND 15720 OF 2021 SRINIDHI KARTI CHIDAMBARAMW/O KARTI.P.CHIDAMBARAM,NO.16, PYCROFTS GARDEN ROAD,NUNGAMBAKKAM, CHENNAI-600 006. ...PETITIONER IN W.P.NO.15129 OF 2021 Vs 1 THE ADDITIONAL COMMISSIONER OF INCOME TAX, CENTRAL RANGE-2, NO.46( OLD NO.108), MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI- 600 034.2 THE DEPUTY COMMISSIONER OF INCOME TAX, OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2 (1) INVESTIGATION WING, ROOM NO. B3 GROUND FLOOR, NEW NO.46 (OLD NO.108), MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI-600 034.3 MR.M.VIVEKANANDAN IRS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2 (1), INVESTIGATION WING ROOM NO. B3 GROUND FLOOR, NEW NO.46 (OLD NO.108), MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 600 034. ...RESPONDENTS IN ALL WPS PRAYER: WP No.15125 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated15.07.2021 having Ref. No.ITBA/ AST/ M / 153C/ 2021-22/1034237897 (1) for the assessment year 2014-15 issued underSection 153C of the Income Tax Act in the case of the petitionerand quash the same as arbitrary, in gross violation of theprinciples of natural justice, illegal and violative of thefundamental rights of the petitioner under Articles 14 and 21 ofthe Constitution of India. PRAYER: WP No.15129 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated15.07.2021 having Ref. No.ITBA/ AST/ S / 153C/ 2021-22/1034247502 (1) for the assessment year 2015-16 issued underSection 153C of the Income Tax Act in the case of the petitionerand quash the same as arbitrary, in gross violation of theprinciples of natural justice, illegal and violative of thefundamental rights of the Petitioner under Articles 14 and 21 ofthe Constitution of India. PRAYER: WP No.15695 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated15.07.2021 having Ref. No.ITBA/ AST/ S / 143(3)/ 2021-22/1034241359 (1) for the assessment year 2019-20 issued underSection 143(3) of the Income Tax Act and the consequentialnoticeofdemanddated15.07.2021havingRef.No.ITBA/AST/S/156/2021-22/1034241423 (1) under Section 156of the Income Tax Act and the show cause notice dated 15.07.2021having Ref.No.ITBA/PNL/S/271AAC (1)/2021-22/1034244002 (1)issued under Section 271 AAC (1) of the Income Tax Act the inthe case of the Petitioner and quash the same as arbitrary, ingross violation of the principles of natural justice, illegaland violative of the fundamental rights of the Petitioner underArticles 14 and 21 of the Constitution of India. PRAYER: WP No.15713 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated https://hcservices.ecourts.gov.in/hcservices/ PRAYER: WP No.15713 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated https://hcservices.ecourts.gov.in/hcservices/ 15.07.2021 having Ref. No.ITBA/ AST/ S / 153 C/ 2021-22/1034241239 (1) for the assessment year 2017-2018 issued underSection 153 C of the Income Tax Act and the consequential noticeof demand dated 15.07.2021 having Ref.No.ITBA/AST/S/156/2021-22/1034241312 (1) under Section 156 of the Income Tax Act andtheshowcausenoticedated15.07.2021havingRef.No.ITBA/PNL/S/271AAC (1)/2021-22/1034243356 (1) issued underSection 271 AAC (1) of the Income Tax Act the in the case of thePetitioner and quash the same as arbitrary, in gross violationof the principles of natural justice, illegal and violative ofthe fundamental rights of the Petitioner under Articles 14 and21 of the Constitution of India. PRAYER: WP No.15717 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated15.07.2021 having Ref. No.ITBA/ AST/ S / 153 C/ 2021-22/1034241413 (1) for the assessment year 2018-2019 issued underSection 153 C of the Income Tax Act and the consequential noticeof demand dated 15.07.2021 having Ref.No.ITBA/AST/S/156/2021-22/1034241504 (1) under Section 156 of the Income Tax Act andtheshowcausenoticedated15.07.2021havingRef.No.ITBA/PNL/S/271AAC (1)/2021-22/1034243830 (1) issued underSection 271 AAC (1) of the Income Tax Act the in the case of thePetitioner and quash the same as arbitrary, in gross violationof the principles of natural justice, illegal and violative ofthe fundamental rights of the Petitioner under Articles 14 and21 of the Constitution of India. PRAYER: WP No.15720 of 2021:- Writ Petition filed Under Article 226 of the Constitution ofIndia to issue of Writ of Certiorari, Calling for the records ofthe 2nd Respondent relating to the Assessment order dated15.07.2021 having Ref. No.ITBA/ AST/ S / 153 C/ 2021-22/1034239868 (1) for the assessment year 2015-2016 issued underSection 153 C of the Income Tax Act and the consequential noticeof demand dated 15.07.2021 having Ref.No.ITBA/AST/S/156/2021-22/1034239946 (1) under Section 156 of the Income Tax Act andtheshowcausenoticedated15.07.2021havingRef.No.ITBA/PNL/S/271 (1) (c)/2021-22/1034240001 (1) issuedunder Section 271(1)(c) of the Income Tax Act the in the case ofthe Petitioner and quash the same as arbitrary, in grossviolation of the principles of natural justice, illegal andviolative of the fundamental rights of the Petitioner underArticles 14 and 21 of the Constitution of India. For Petitioner: For Respondents: The orders of assessment dated 15.07.2021 passed underSection 153C of the Income Tax Act, 1961 [hereinafter afterreferred to as the 'Act'] are under challenge in the presentwrit petitions. 2. Admittedly, the Show Cause Notices initially issued bythe Income Tax Department was challenged by thepetitioners/assessees and this Court delivered a judgment on05.07.2021.Thewritpetitionsfiledbythepetitioners/assessees were dismissed and consequently, thisCourt issued directions to the Assessing Authority to proceedwith the assessment/reassessment by affording opportunity to thewrit petitioners/assessees. 3. The present writ petitions filed by thepetitioners/assessees emerged from and out of the opportunity tobe afforded to the assessees pursuant to the directions issuedby this Court. 4. The respective learned Senior counsels appearing onbehalf of the petitioners, Dr.Abhishek Singhvi, Mr.Kapil Sibal https://hcservices.ecourts.gov.in/hcservices/ 2. Admittedly, the Show Cause Notices initially issued bythe Income Tax Department was challenged by thepetitioners/assessees and this Court delivered a judgment on05.07.2021.Thewritpetitionsfiledbythepetitioners/assessees were dismissed and consequently, thisCourt issued directions to the Assessing Authority to proceedwith the assessment/reassessment by affording opportunity to thewrit petitioners/assessees. 3. The present writ petitions filed by thepetitioners/assessees emerged from and out of the opportunity tobe afforded to the assessees pursuant to the directions issuedby this Court. 4. The respective learned Senior counsels appearing onbehalf of the petitioners, Dr.Abhishek Singhvi, Mr.Kapil Sibal https://hcservices.ecourts.gov.in/hcservices/ and Mr.AR.L.Sundaresan made their respective submissions mainlyon the ground that the directions issued by this Court to affordopportunities to the petitioners had not been complied with bythe respondent Assessing Authority. The respondents have takenaction in a hurried manner, denying reasonable opportunities tothe petitioners and passed the assessment orders, which is to beconstrued as an order in nullity in the eye of law. 5. It is contended that it is a classic case of violation ofPrinciples of Natural Justice as the authorities competent, whois exercising the quasi-judicial power, failed in their duty toprovide reasonable opportunity to the assessees in the mannerknown to law. Thus, the orders impugned are non-est and cannothave its legs to stand under the scrutiny of law. Severaljudgments of the Hon'ble Apex Court are cited and it is not indispute that the Principles of Natural justice is an inherentpart of Article 14 and therefore, there cannot be any otheropinion regarding the opportunity to be granted to the aggrievedpersons. The Principles of violation of Natural Justice is wellestablished and this Court has to consider the facts andcircumstances to form an opinion, whether the Principles ofNatural Justice has been followed or not. 6. The learned Additional Solicitor General of Indiarebutted the contentions by stating that opportunities weregranted to the writ petitioners/assessees. However, they havenot utilized the said opportunities in a proper manner andtherefore, they have no reason to complain before this Court bystating that the Assessing Officer has passed the orders ofassessment hurriedly. The sequence of events would establishthat the assessees were granted complete opportunity ascontemplated under the provisions of the Income Tax Act.Therefore, the writ petitions are devoid of merits. 7. The earlier writ petitions were filed, challenging theShow Cause Notices issued under Section 153C of the Income TaxAct to the petitioners. The interim order of Status quo wasgranted by this Court on 07.12.2020 and the final order waspassed by this Court on 05.07.2021. Thereafter, on 07.07.2021,the Assessing authority provided final opportunity to the writpetitioners/assessees. Again on 07.07.2021, another letter wascommunicated to the petitioners/assessees, stating that "onefinal opportunity to file your replies to establish your casealong with complete details and evidences on or before09.07.2021, failing which, the assessments should be completedbased on the materials available on record, without any furtheropportunity." 8. In response to the said letters issued by the Assessingauthority, the representative / Chartered accountants of the 8. In response to the said letters issued by the Assessingauthority, the representative / Chartered accountants of the petitioners submitted a letter on 09.07.2021, stating that theassessee is required to furnish his detailed response andfurther, they want to cross-examine the deponents of thestatements, which were relied upon for the purpose of initiatingaction under Section 153C of the Act. The assessees requestedfor reasonable time to respond on merits with reference to theallegations raised against the assessees in the show causenotices issued by the authority competent. They havespecifically stated that two days time is not at all sufficientfor them to defend their case as the allegations involvescertain intricacies and they require cross-examination of thepersons, who have given statements. In the concluding paragraph,the assessees have contended that they require atleast two weekstime, enable them to engage a counsel / authorizedrepresentative to prepare and submit a reply on merits and toappear on the assessee's behalf and orally argue the case.Further, they have demanded for a fair opportunity to cross-examine the three persons, who allegedly made statements reliedupon as well as the alleged author or authors of the three pagesof three small note books. 9. This apart, a request for personal hearing and to arguethe case orally is also sought for. 10. In this backdrop, the respective learned Senior counselscontended that none of the request made by the assessees wasconsidered. Per contra, the Assessing authority had hurriedlyproceeded with the assessment and issued the impugned orders ofassessment on 15.07.2021. 11. At the outset, it is contended that this Court deliveredthe judgment on 05.07.2021 and two letters were sent by theAssessing Authority to the assessees on 07.07.2021 and on09.07.2021 and the assessees requested to grant atleast twoweeks time to defend their case properly through theircounsel/representative and further, requested for a personalhearing as well as to cross-examine persons, who have givenstatement against the assessees. However, without any reply tosuch request made by the assessees, the respondent/AssessingAuthority passed the final order of assessment on 15.07.2021. 12. The manner, in which, the orders of assessment werepassed by the Assessing Authority itself would establish thatreasonable opportunity had not been granted to thepetitioners/assessees. Opportunity to be granted is not a mereopportunity and it must be meaningful and reasonable. Theassessees must have time to put forth their defense statements,examine the witnesses by engaging a counsel or for personalhearing. Undoubtedly, the allegations against the assessees emanated from and out of a search conducted in the premises ofM/s.Agni Estates and Foundations Private Limited. The assesseesare the 'other persons' and therefore, they require opportunityto rebut the contentions raised against them from and out of thematerials collected from the premises of the 'searched person'. 13. This being the factum, the respondent could not able toestablish that reasonable opportunity has been afforded to thepetitioners/assessees to defend their case in the manner knownto law. However, the allegations made against the AssessingAuthority is not substantiated and became unnecessary.Therefore, such allegations made in the affidavits require noconsideration. Though such an allegation is made, the respectivelearned Senior counsels fairly have not insisted the same. TheLearned Senior counsels for the petitioners have reiterated thatthe petitioners are ready and willing to defend their case andreasonable opportunity is to be given. 13. This being the factum, the respondent could not able toestablish that reasonable opportunity has been afforded to thepetitioners/assessees to defend their case in the manner knownto law. However, the allegations made against the AssessingAuthority is not substantiated and became unnecessary.Therefore, such allegations made in the affidavits require noconsideration. Though such an allegation is made, the respectivelearned Senior counsels fairly have not insisted the same. TheLearned Senior counsels for the petitioners have reiterated thatthe petitioners are ready and willing to defend their case andreasonable opportunity is to be given. 14. This being the factum, the Assessing Authority is boundtoaffordreasonableopportunity,enablingthepetitioners/assessees to defend their case in the mannerprescribed. This being the factum established, this Court isinclined to pass following orders:(1) (a) W.P.No.15125 of 2021: The assessment order passed bythesecondrespondentdated15.07.2021havingRef.No.ITBA/AST/M/153C/2021-22/1034237897 (1) for the assessmentyear 2014-15 is quashed.(b) W.P.No.15129 of 2021: The assessment order passed by thesecondrespondentdated15.07.2021havingRef.No.ITBA/AST/S/153C/2021-22/1034247502 (1) for the assessmentyear 2015-16 is quashed.(c) W.P.No.15695 of 2021: The assessment order passed by thesecond respondent dated 15.07.2021 having Ref.No.ITBA/AST/S/143(3)/2021-22/1034241359(1) for the assessment year 2019-20, theConsequentialnoticeofdemandhavingRef.No.ITBA/AST/S/156/2021-22/1034241423(1) and Show CauseNotice having Ref.No.ITBA/PNL/S/271AAC(1)/2021-22/1034244002(1)are quashed. (d) W.P.No.15713 of 2021: The assessment order passed by thesecondrespondentdated15.07.2021havingRef.No.ITBA/AST/S/153C/2021-22/1034241239(1) for the assessmentyear 2017-18, the Consequential notice of demand havingRef.No.ITBA/AST/S/156/2021-22/1034241312(1) and Show CauseNotice having Ref.No.ITBA/PNL/S/271AAC(1)//2021-22/1034243356(1)are quashed.(e) W.P.No.15717 of 2021: The assessment order passed by thesecondrespondentdated15.07.2021havingRef.No.ITBA/AST/S/153C/2021-22/1034241413(1) for the assessmentyear 2018-19, the Consequential notice of demand havingRef.No.ITBA/AST/S/156/2021-22/1034241504(1) and Show Cause Notice having Ref.No.ITBA/PNL/S/271AAC(1)/2021-22/1034243830(1)are quashed.(f) W.P.No.15720 of 2021: The assessment order passed by thesecond respondent 15.07.2021 having Ref.No.ITBA/AST/S/153C/2021-22/1034239868(1) for the assessment year 2015-16, theConsequentialnoticeofdemandhavingRef.No.ITBA/AST/S/156/2021-22/1034239946(1) and Show CauseNotice having Ref.No.ITBA/PNL/S/271(1)(c)/2021-22/1034240001(1)are quashed. (2) The matters are remanded back to the Assessing Authority/ second respondent for fresh consideration and for providingreasonable opportunity to the writ petitioners/assessees andthereafter pass order of assessment(s) on merits and inaccordance with law. (3) Regarding the opportunity to be granted, the Assessingauthorityisdirectedtopermitthepetitioners/assessees/counsel/the authorised representative torepresent the case of the petitioners/assessees and anopportunity to cross-examine the persons, who have givenstatement against the assessees is to be provided. The AssessingAuthority is also entitled to have the assistance of legallytrained departmental representative, if required. (4) The petitioners/assessees are directed not to seek anyunnecessary adjournments and to co-operate for the earlydisposal of the assessment/reassessment proceedings. In theevent of any such unnecessary adjournment, the same shall berecorded by the Assessing Authority in the proceedings andproceed accordingly. (3) Regarding the opportunity to be granted, the Assessingauthorityisdirectedtopermitthepetitioners/assessees/counsel/the authorised representative torepresent the case of the petitioners/assessees and anopportunity to cross-examine the persons, who have givenstatement against the assessees is to be provided. The AssessingAuthority is also entitled to have the assistance of legallytrained departmental representative, if required. (4) The petitioners/assessees are directed not to seek anyunnecessary adjournments and to co-operate for the earlydisposal of the assessment/reassessment proceedings. In theevent of any such unnecessary adjournment, the same shall berecorded by the Assessing Authority in the proceedings andproceed accordingly. (5) The said exercise is directed to be completed by theAssessing Authority / second respondent and pass assessment /reassessment orders within a period of four weeks from the dateof receipt of a copy of this order. If the petitioners areaggrieved thereafter, they are at liberty to approach theappellate authority under the Act. 15. With these directions, all the writ petitions standallowed. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant Registrar KakTo 1.The Additional Commissioner of Income Tax, Central Range – 2, No.46, (Old No.108), Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. Central Range – 2, No.46, (Old No.108), Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. 2.The Deputy Commissioner of Income Tax, Office of the Deputy Commissioner of Income Tax, Central Circle 2 (1) Investigation Building, Room No.B3, Ground Floor, New No.46, (Old No.108)Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. Office of the Deputy Commissioner of Income Tax, Central Circle 2 (1) Investigation Building, Room No.B3, Ground Floor, New No.46, (Old No.108)Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. 3.The Deputy Commissioner of Income Tax, Central Circle 2(1), Investigation Building, Room No.B3, Ground Floor, New No.46, (Old No.108)Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. Central Circle 2(1), Investigation Building, Room No.B3, Ground Floor, New No.46, (Old No.108)Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. +2cc to M/s.A.P.Srinivas, Advocate Sr.36360 & 36361 jp-ii[co]srg 25/08/2021 W.P.Nos.15125, 15129, 15695, 15713, 15717 & 15720 of 2021