Wp/21146/2021 Of Tt Steel Service India Pvt Ltd v. The Additional /Joint/Deputy/Assistant/Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9 DAY OF DECEMBER, 2021 BEFORE. THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR| "WRIT PETITION NO.21146 OF 2021 (TIT) BETWEEN: TT STEEL SERVICE INDIA PVT LID,PLOT NO.335 & 34, BIDADI INDUSTRIAL AREARAMANAGARA TALUKBENGALURU - 562 109(REPRESENTED BY MR.JUNICHI TAKAMASUS/O MR. HIROSHI TAKAMASUAGED ABOUT 50 YEARS) ... PETLTIONER| (BY SRI, NARENDRA KUMARJ JAIN & SMT.GEETHA RANI K, ADVOCATES) AND: 1.THE ADDITIONAL / JOINT / DEPUTYASSISTANT/COMMISSIONER OF INCOME TAX,INCOME TAX OFFICER,NATIONAL FACELESS -ASSESSMENT CENTRE,MINISTRY OF FINANCE.ROOM NO.401, 2 FLOORE-RAMP, JAWAHARLAL NEHRU STADIUMDELHI -110003.ASSISTANT/COMMISSIONER OF INCOME TAX,INCOME TAX OFFICER,NATIONAL FACELESS -ASSESSMENT CENTRE,MINISTRY OF FINANCE.ROOM NO.401, 2 FLOORE-RAMP, JAWAHARLAL NEHRU STADIUMDELHI -110003. 2.THE DEPUTY COMMISSIONER OFINCOME TAX CIRCLE 7 (1)(1)BMTC BUILDING, KORMANGALA,BANGALORE-560095.INCOME TAX CIRCLE 7 (1)(1)BMTC BUILDING, KORMANGALA,BANGALORE-560095. 3.THE DISPUTE RESOLUTION PANEL|(DRP) - 2, 4 FLOOR, A-WING, |KENDRIYA SADAN, 17 MAIN, |(DRP) - 2, 4 FLOOR, A-WING, |KENDRIYA SADAN, 17 MAIN, | KORMANGALA, BANGALORE 560034 REPRESENTED BY SECRETARY-DRP-2). ... RESPONDENTS. (BY SRI E. 1. SANMATHI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 22/7 OFTHE CONSTITUTION OF INDIA PRAYING TO QUASH AS FAR)AS|THE|PETITIONER.IS CONCERNEDTHE|IMPUGNEDASSESSMENT ORDER DATED 15.11.2021 ISSUED BY THE.LEARNED R1 U/S 143930 R.W.S 144C (3) R.W.S 144B FOR AY.2018-19 ENCLOSED IN ANNEXURE-A AND ETC., THIS WRIT PETITION COMING ON FOR PRELIMINARYHEARING IN *B’ GROUP, THIS DAY, THE COURT MADE THE.FOLLOWING THROUGH VIDEO CONFERENCE: ORDER In this petition, tne petitioner seeks quashing ofimpugned final assessment order at Annexure-A_ dated15.11.2021, demand notice at Annexure-B dated 15.11.2021|and notice at Annexure-C dated 15.11.2021 and for other|reliefs. 2.Heard learned counsel! for petitioner and learnedcounsel! for respondents. 3.In addition to reiterating the various contentionsurged in the petition and referring to the documents producedby the petitioner, learned counsel for the petitioner invites my|attention to the mandatory provisions of Section 144C of the|Income Tax Act, 1961 (for snort the I.T. Act) in order to| point out that the statutory scneme underlying the said|provision clearly indicates that under sub-section (2), aftertne draft Assessment Order dated 29.09.2021 was issued to!tne petitioner, the petitioner had two options viz., eitner to|file his acceptance as provided under sub-section (2)(a) or to|file objections as per sub-section (2)(b) of the I.T. Act. 4It is contention of the petitioner that the petitionersubmitted his objections on 28.10.2021 to the Dispute|Resolution Panel (DRP) within the prescribed period; in view.of change in the mecnanism of assessment being shifted to the faceless scheme coupled with the Covid-19 pandemic|exigency, the petitioner could not intimate tne Assessing|Officer about filing of the objections before the DRP; however,on 12.11.2021, the Assessing Officer issued notice to the)petitioner seeking clarification from nim as to whether the|petitionernadSubmitted Nis|objectionsCOtne|CraftAssessment Order witn tne DRP. In response thereto,|petitioner sent a reply dated 15.11.2021 intimating the|Assessing Officer that petitioner had already submitted the|objections to the draft Assessment Order on 28.10.2021 withthe DRP within the prescribed period. In addition tnereto,| petitioner also intimated the jurisdiction Assessing Officer by|way of e-mail as well as physical submission about his filing|objections to the draft Assessment Order. | petitioner also intimated the jurisdiction Assessing Officer by|way of e-mail as well as physical submission about his filing|objections to the draft Assessment Order. | 5.It is the grievance of the petitioner that the)despite the petitioner submitting his objections to the draft)assessment order before the DRP within the prescribed periodas well as intimating the same to the Assessing Officer in)response to the clarification sought for by him coupled with|the intimation submitted by the petitioner to the jurisdictional Assessing Officer, respondent No.1 - Assessing Officer nas|proceeded to pass the impugned assessment order dated|15.11.2021 without following the mandatory’ procedureprescribed in sub-sections (5) to (13) of Section 144C and.without awaiting directions from the DRP as provided in the)Said provisions. It is also contended tnat by virtue of|Government Notifications, circulars etc., aS well as the orders|passed by the Apex Court extending the period of limitation,|tne inability and omission, if any, on the part of the petitioner|to file objections with the Assessing Officer ought to be|condoned and a /enient view is to be taken and indulgence in)this regard is to be shown in favour of the petitioner,| particularly wnen the petitioners had filed their objections|before the DRP on 28.10.2021 within the prescribed period|and the petitioner having intimated the same to tne AssessingOfficer prior to passing the impugned order. It is therefore|contended tnat the impugned assessment order is violative of the.aforesaidmandatoryprovisionsof|Section>144C,particularly, since the petitioner nad filed nis objections to the|draft assessment order before the DRP within the prescribed|period and intimated the same to the Assessing Officer and|consequently,theimpugnedAssessmentOrder|andconsequential notice deserve to be quasned and the DRP be|directed to conclude the proceedings after considering the)objections of the petitioner pursuant to which the Assessing|Officer is to be directed to pass appropriate orders as_provided under Section 144C of the IT Act. | 6.Per contra, learned counsel for the respondentssubmits that there is no merit in the petition and the same is_liable to De dismissed. J.|As rightly contended by the learned counsel for.tne petitioner, the undisputed material on record clearlyindicates that in response to the draft Assessment Order dated29.09.2021issuedCOtne|petitioner,|petitionersubmitted objections before the DRP on 28.10.2021, within|the prescribed period and intimated the same to the AssessingOfficer on 15.11.2021 pursuant to clarification sought for by tne Assessing Officer on 12.11.2021; the explanation offered|by the petitioner as regards his inability and omission to file|objections witn the Assessing Officer earlier in addition to the|DRP?merits|acceptance, particularlyinVIEWof|the.Government Orders, circulars etc. as well as the orders of theApex Courts extending tne period of limitation coupled with|the intimation provided by the petitioner to the Assessing|Officer as sougnt for by nim prior to passing the Assessment|Order. At any rate, the petitioner had cnosen to exercise the|option of filing objections to the draft Assessment Order|warranting the DRP to proceed further before the Assessing|Officer takes further steps as provided under sub-sections 5)to 13 to Section 144C. Under these circumstances, I am of.the considered opinion that the impugned Assessment Order|passed by respondent No.1- Assessing Officer without)awaiting directions from the DRP, before wnom the matter)was pending pursuant to the petitioner filing his objections|within the prescribed period is clearly arbitrary, ilegal and. without jurisdiction or authority of law and the same deserves|to pe quasned and necessary directions are to be issued to|tne DRP as well as the Assessing Officer in this regard. — 8.In the result, I pass the following: ORDER (1)Tne petition is nereby allowed. without jurisdiction or authority of law and the same deserves|to pe quasned and necessary directions are to be issued to|tne DRP as well as the Assessing Officer in this regard. — 8.In the result, I pass the following: ORDER (1)Tne petition is nereby allowed. (il)Tne impugned final assessment order.bearing|No. ITBA/AST/S/143(3 )/20222/1036959912(1) at Annexure-A dated15.11.2021,demandnotice|bearingNo.ITBA/AST/S/156/2021-22/10369599bearing|No. ITBA/AST/S/143(3 )/20222/1036959912(1) at Annexure-A dated15.11.2021,demandnotice|bearingNo.ITBA/AST/S/156/2021-22/10369599 24(1) at Annexure-B dated 15.11.2021 andnotice bearing|No.ITBA/PNL/S/270A/2021-22/1036959921(1) at Annexure-C dated 15.11.2021are hereby quashed.No.ITBA/PNL/S/270A/2021-22/1036959921(1) at Annexure-C dated 15.11.2021are hereby quashed. (iil)Tne Dispute Resolution Panel (DRP) isdirected to conciude the proceedings byconsidering the objections filed by thepetitioner, in accordance with law anddirected to conciude the proceedings byconsidering the objections filed by thepetitioner, in accordance with law and Section 144C of the Income Tax Act,1961. (iv)Upon.tneDRP|concluding tne|proceedings as provided under Section144C referred toSUPId, respondent No.1-— Assessing Officer shall proceed furtherandDdassappropriateordersInaccordance witn law. | SD/- JUDGE| Nms/Bmc