Wp/23755/2021 Of Murugesan Santhi v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.11.2021 CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN W.M.P.NOS.25011, 25010, 25009 & 25012 OF 2021 (Through Video Conferencing) Murugesan Santhi ... Petitioner .Vs. 1. The Assistant Commissioner of Income Tax, National e-Assessment Centre, Delhi E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003.2. The Assistant Commissioner of Income Tax, Non Corporate Circl - 22 (1), Chennai, Income Tax Department, Ramakrishna Street, West Tambaram, Chennai - 600 045.3. The Principal Commissioner of Income Tax, Chennai - 1, Income Tax Department, 121, Nungambakkam High Road, Nungambakkam, Chennai - 600 034. ... Respondents PRAYER:- Petition filed under Article 226 of the Constitution ofIndia to issue a Writ of Certiorarified Mandamus, to call forthe records of the Writ Petitioner Company on the file of theFirst Respondent to quash the impugned order dated 28.09.2021passed u/s 143(3) r.w.s 144B of the Act for the AssessmentYear 2019-2020 in ITBA/AST/S/143(3)/2021-22/1035978241(1) andconsequently direct the first respondent to complete the freshassessment for the assessment year 2019-20 after grantingreasonable/sufficient opportunity of hearing and pass such other/further orders as this Hon'ble Court may deem fit andproper on the facts in the circumstances of the case and thusrender justice. ORDER The petitioner has challenged the assessment order passed bythe National Faceless Assessment Centre. The impugned orderprecedes a survey under Section 133 A for the assessment year2019/20. After the survey was conducted, a notice under Section143 (2) was also issued to the writ petitioner. Thereafter,series of notices under Section 142 (1) of the Income Tax Act,1961 were issued by the Income Tax Officer (National e-Assessment Centre) calling upon the writ petitioner to furnishdetails. 2. The writ petitioner appears to have responded andthereafter few other notice under same provision were issued tothe writ petitioner on 22.2.2021 and on 25.8.202. The writpetitioner has also responded to the same by providing thedetails called for. Thereafter on 23.09.2021 the writ petitionerwas issued with a show cause notice with a draft assessmentorder by the Income Tax Officer, National Faceless AssessmentCentre. The writ petitioner was asked to respond to the above by25.09.2021. The writ petitioner also responded to the show causenotice on 25.09..2021. The writ petitioner however requested therespondents to extend personal hearing in terms of Section 144(B) (7) (vii). Thereafter, the National Faceless AssessmentCentre also fixed the hearing on 28.09.2021 at 10:30 A.M throughvideo conferencing. 3. The writ petitioner also participated in the saidproceedings pursuant to which the impugned order has been passedon the same day i.e., 28.09.2021. In this writ petition thelearned counsel for writ petitioner submits that the majordispute pertains to the addition of stock and therefore, withoutconsidering the same the Income Tax Officer of National FacelessAssessment Centre has passed the impugned order. It is submittedthat it has been passed in the violation of principles ofnatural justice as it is not possible for such assessment orderto be passed on the same date of the hearing. 4. The learned Counsel for the writ petitioner furthersubmits that the respondents has nearly confirmed the proposals in the show cause notice and adopted the draft assessment orderwhich was enclosed along with the show cause notice issued tothe writ petitioner. 4. The learned Counsel for the writ petitioner furthersubmits that the respondents has nearly confirmed the proposals in the show cause notice and adopted the draft assessment orderwhich was enclosed along with the show cause notice issued tothe writ petitioner. 5. Learned Counsel for the writ petitioner further submitsthat the statutory safeguards under Section 144 (B) (1) (xvi)has not been satisfied. It is further submitted that under theaforesaid sub-Clause the National Faceless Assessment Centre ismandated to examine the draft assessment order in accordancewith risk management strategy by the Board. 6. Learned Counsel for writ petitioner submits that the RiskManagement Strategy has not been specified till dated by theBoard and therefore, the impugned assessment order without aRisk Management Strategy of the Board is liable to be quashed. 7. Learned Counsel for writ petitioner submits that theimpugned assessment order has been passed to ensure that theassessment orders are passed in time at the last date for filingassessment order expired on 30.09.2021 and in the process in aviolation of principles of natural justice and therefore, theimpugned order passed at the fag end of the limitation areliable to be quashed. Further, in terms of the decision of the Hon'ble SupremeCourt in Principal Commissioner of Income Tax and others Vs.M/S. LG Electronics India Private Limited, 2018 (7) TMI 1905(SC) passed in Civil Appeal No. 6850 of 2018 vide order dated20.7.2018 which reads as under: "Having heard Shir Vikramjit Banerjee, learnedASG appearing on behalf of the appellant, and givingcredence to the fact that he has argued before usthat the administrative circualr will not operate asa fetter on the Commissioner since it is a quasijudicial authority, we only need to clarify that inall cases like the present, it will be open to grantdeposit orders of a lesser amount than 20 %, pendingappeal. The appeal is disposed of accordingly." 8. Appearing on behalf of the respondent, learned counselfor the respondents submits the case as a checkerred history,starring with the survey under Section 133 (A) of the Income TaxAct, 1961 and notices issued under Section 142 (1) of the IncomeTax Act, 1961 by the National e-Assessment Centre to the writpetitioner to furnish the details. It is submitted that the writpetitioner took time to reply in the process the time forpassing the assessment was lapsing and only at the fag end of the limitation the National Faceless Assessment Centre could getready with the show cause notice and draft assessment order. 9. The learned Counsel for for the respondent further,submitted that the Section 144 (B) (1) (xvi) contemplates threedifferent situations which are alternative to each other and inthis case the option under sub Clause (b) has been adopted whichreads as under: (b). Provide an opportunity to the assessee, incase any variation prejudicial to the interest ofassessee is proposed, by serving a notice callingupon him to show cause as to why the proposedvariation should not be made; 10. The writ petitioner has been issued with notices underSection 142 (1) from January 2021 which the writ petitioner hasalso promptly replied to before the respondent. The draftassessment order was issued on 23.09.2021. The dispute in thepresent writ petition touches on the merits of the assessmentwhich cannot be examined in detail to arrive at a fairconclusion, one way or the other. The writ petitioner has analternative and efficacious remedy under the AppellateCommissioner under Section 246 (A) of the Income Tax Act, 1961.Considering the same the writ petition filed challenging theassessment order passed by the National Faceless AssessmentCentre, Delhi cannot be entertained. 10. The writ petitioner has been issued with notices underSection 142 (1) from January 2021 which the writ petitioner hasalso promptly replied to before the respondent. The draftassessment order was issued on 23.09.2021. The dispute in thepresent writ petition touches on the merits of the assessmentwhich cannot be examined in detail to arrive at a fairconclusion, one way or the other. The writ petitioner has analternative and efficacious remedy under the AppellateCommissioner under Section 246 (A) of the Income Tax Act, 1961.Considering the same the writ petition filed challenging theassessment order passed by the National Faceless AssessmentCentre, Delhi cannot be entertained. 11. Heard learned counsel for writ petitioner had perusedthe voluminous records which have been filed in the present writpetition. Section 144 (B) of the Income Tax Act, 1961 wasinserted with effect from 01.04.2021. As a matter of act theaforesaid provision contemplates that National FacelessAssessment Centre to examine the draft assessment order inaccordance with the Risk Management Strategy specified by theBoard. The Counsel for respondents was unable to confirm whetherany Risk Management Strategy has been specified by the Board.How assessment orders have been passed by the respondents interms of the aforesaid provisions. 12. The writ petitioner is, therefore, directed to file astatutory appeal in terms of the above provisions within aperiod of 30 days from the date of receipt of this order.Considering the fact that the impugned order passed withoutappropriate Risk Management Strategy of the Board iscontemplated under Section 144 (B) (1) (xvi) the AppellateCommissioner may consider the appeal of the writ petitioner, ifsuch appeal is filed on merits and in accordance with law. Themandatory requirement a pre deposit under Section 220 (6) shallhowever, be waived in the light of the fact that the entire assessment proceedings was complete by the respondents at thefag end of the limitation to avoid lapsing of on account oflimitation. The Appellate Commissioner is, therefore, directedto pass appropriate orders on merits within a period of threemonths from the date of receipt of this order. Needless tostate, the writ petitioner shall be heard and if provision areprovided for personal hearing through video conferencing, suchfacility may be made available to the writ petitioner. Thus the writ petition stands disposed of with the aboveobservations. There shall be no order as to costs. Sd/- Assistant Registrar(CS VII) //True Copy// nstTo Sub Assistant Registrar 1. The Assistant Commissioner of Income Tax National e-Assessment Centre, Delhi, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003.2. The Assistant Commissioner of Income Tax, Non Corporate Circl - 22 (1), Chennai, Income Tax Department, Ramakrishna Street, West Tambaram, Chennai - 600 045.3. The Principal Commissioner of Income Tax, Chennai - 1, Income Tax Department, 121, Nungambakkam High Road, Nungambakkam, Chennai - 600 034. +1cc to Mr.S.Sridhar, Advocate, S.R.No.58318 KG(CO)PBS/03/12/2021 W.P.NO.23755 OF 2021&W.M.P.NOS.25011, 25010, 25009& 25012 OF 2021