Wp/5175/2024 Of Divine Chemtec Limited v. Income Tax Department

IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI(Special Origin^Jurisdiction) WEDNESDAY ,THE TWENTY EIGHTH DAY OF FEBRUARYTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE RAVI NATH TILHARIAND THE HONOURABLE SRI JUSTICE HARINATH.NWRIT PETITION NO: 5175 OF 2024 Between: Divine Chemtec Limited, (A company incorporated and registered under theprovisions of Companies Act, 2013) having its registered office at- Plot No. H,r-K, L, Phase-II, Duvvada, Visakhapatnam - 530049, Andhra Pradesh. Rep. byits Director, Sri. Moturi Srinivas Prasad ...Petitioner AND 1. Income Tax Department, National Faceless Assessment Center Delhi4th Floor, Mayur Bhawan, Connaught Circus, New Delhi[-][ 110001]4th Floor, Mayur Bhawan, Connaught Circus, New Delhi[-][ 110001] 2. The Chairman, Central Board of Direct Taxes, Ministry of Finance,Government of India, North Block, New Delhi - 110001.Government of India, North Block, New Delhi - 110001. ...Respondents Petition under Article 226 of the Constitution of India praying that inthe circumstances stated in the affidavit filed therewith, the High Court maybe pleased to issue awrit, order or directions, moreinthenatureofmandamus.To quashtheimpugnedpenalty orderdated24/01/2024passedundersection271 (1)(c)of IncomeTaxAct,1961fortheAssesmentYear 2016-47andresultant DemandNoticedt.24/01/2024issued U/s 456(1) of Income Tax Act, 1961 as being illegal, arbitrary, nonest and violative of principles of natural justice, besides being barred bytime as per Sec.^75 (lA) of the Income Tax Act, 1961.And consequentially to set aside the -penalty order dated 24/01/2024 passedundersection271 (1)( c) of Income Tax Act, 1961 for the Assesment[Year][ 201‘6-17][ and]resultant Demand Notice dt.24/01/2024 issued U/s 156(1)[of][ Income Tax]Act,Hl961.-^ :iA NOTI OF 2024 ■' y- Petition under Section 151 CPC praying thatin the[circumstances]stated in the affidavit filed in support of the petition, the High Court may bepleased to stayall further proceedings pursuant to penalty order passeddated 24/01/2024 including recovery of the penalty imposed. Counsel for the Petitioner: Sri Javvaji Sarath ChandraCounsel for the Respondents: Ms.lswarya, Junior Standing[Counsel] The Court made the following: APHCO10096672024 IN THE HIGH COURT OF ANDHRA PRADESH ::AMARAVATI(Special Original Jurisdiction) WEDNESDAY ,THE TWENTY EIGHTH DAY OFFEBRUARYTWO THOUSAND AND TWENTY FOURPRESENT [3464] THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI THE HONOURABLE SRI JUSTICE HARINATH.N WRIT PETITION NO; 5175 OF 2024 Between:DIVINE CHEMTEC LIMITED • ••PETITIONER(S) ANDINCOME TAX DEPARTMENT AND OTHERS...RESPONDENT(S) Counsel for the Petitioner(s):SRI. JAWAJI SARATH CHANDRA Counsel for the Respondents: The Court made the following: ORDER: foer Ravi Nath Tilhari,J) Heard Sri Sarath Chandra, learned counsel for the petitionerand Ms.Iswaiya, learned Junior Standing Counsel for[respondent]Nos.l and 2. 2.The petitioner challenges the impugned order, dated[24.01.2024]passed under Section 271(1)(C) of the Income Tax Act,[1961.][ This][ is]the order for imposition of penalty for the assessment[years][ (AY)][ 2016-]2017. The amount of penalty imposed for this AY is[Rs.5,213/-.]passed under Section 271(1)(C) of the Income Tax Act,[1961.][ This][ is]the order for imposition of penalty for the assessment[years][ (AY)][ 2016-]2017. The amount of penalty imposed for this AY is[Rs.5,213/-.] 3.The challenge is on the ground of violation of the principles ofnatural justice. Learned counsel for the petitioner submits that anyopportunity of personal homing was not afforded. Heard Sri Sarath Chandra, learned counsel for the petitionerand Ms.Iswaiya, learned Junior Standing Counsel for[respondent]Nos.l and 2. 2.The petitioner challenges the impugned order, dated[24.01.2024]passed under Section 271(1)(C) of the Income Tax Act,[1961.][ This][ is]the order for imposition of penalty for the assessment[years][ (AY)][ 2016-]2017. The amount of penalty imposed for this AY is[Rs.5,213/-.]passed under Section 271(1)(C) of the Income Tax Act,[1961.][ This][ is]the order for imposition of penalty for the assessment[years][ (AY)][ 2016-]2017. The amount of penalty imposed for this AY is[Rs.5,213/-.] 3.The challenge is on the ground of violation of the principles ofnatural justice. Learned counsel for the petitioner submits that anyopportunity of personal homing was not afforded. 4.Previously, also for the same AY 2016-17 penalty was imposed ofRs.5,213/- vide order dated 21.03.2022 against which the petitionerfiledW.P.No. 11923of2022.ThepetitionerhadalsofiledW.P.Nos. 11604,11593, 11818 and 11596 of 2022 against the previousorders of penalty dated 16.03.2022 & 21.03.2022 for the AY(s) 2012-2013, 2013-2014, 2014-2015, 2015-2016 as well. Those writ petitionswere allowed by a Co-ordinate Bench of this Court, setting aside thepenalty orders dated 16.03.2022 and 21.03.2022 impugned[in][ those]petitions vide common judgment dated 14.06.2023. The[matter]wasremittedbacktotherespondentNo.lIncome TaxDepartment,NationalfacelessAssessmentCenterDelhi,withadirectiontoconsiderthepetitioner’sreplynoticesdated26.05.2021and31.05.2021 and after affording an opportunity of personal hearing tothepetitionerandpassappropriateordersinaccordancewithgoverning law and rules expeditiously on the condition of petitionerdepositing 25% of the penalty amount in each case within six (06)weeks from the date of receipt of copy of that order, failing which thesaid order dated 14.06.2023 shall stand cancelled.Rs.5,213/- vide order dated 21.03.2022 against which the petitionerfiledW.P.No. 11923of2022.ThepetitionerhadalsofiledW.P.Nos. 11604,11593, 11818 and 11596 of 2022 against the previousorders of penalty dated 16.03.2022 & 21.03.2022 for the AY(s) 2012-2013, 2013-2014, 2014-2015, 2015-2016 as well. Those writ petitionswere allowed by a Co-ordinate Bench of this Court, setting aside thepenalty orders dated 16.03.2022 and 21.03.2022 impugned[in][ those]petitions vide common judgment dated 14.06.2023. The[matter]wasremittedbacktotherespondentNo.lIncome TaxDepartment,NationalfacelessAssessmentCenterDelhi,withadirectiontoconsiderthepetitioner’sreplynoticesdated26.05.2021and31.05.2021 and after affording an opportunity of personal hearing tothepetitionerandpassappropriateordersinaccordancewithgoverning law and rules expeditiously on the condition of petitionerdepositing 25% of the penalty amount in each case within six (06)weeks from the date of receipt of copy of that order, failing which thesaid order dated 14.06.2023 shall stand cancelled. 5.TJie operative portion of the judgment dated 14.06.2023, in para- 17 is reproduced as under; “17.Accordingly,thewritpetitionsareallowedsettingasidetheimpugned penalty orders dated 16.03.2022 and 21.03.2022 passed bythe 1st respondent and matters are remitted back to the 1st respondentwith adirectiontoconsider thereply notices dated26.05.2021and31.05.2021 submitted by the petitioner and after affording an opportunityof personalhearingtothepetitioner,passappropriateordersinaccordance with governing law and rules expeditiously on the condition ofpetitioner depositing 25% of the penalty amount in each case within six (6)weeks from the date of receipt of copy of this order, failing which thisorder shall stand cancelled. No costs. ” 6.The penalty as was imposed by the penalty orders impugnedin Writ Petition Nos. 11604,11593,11818, 11596 and11923 of2022 which finds mention at internal page5of thecommonjudgment dated 14.06.2023, is as under;in Writ Petition Nos. 11604,11593,11818, 11596 and11923 of2022 which finds mention at internal page5of thecommonjudgment dated 14.06.2023, is as under; 6.The penalty as was imposed by the penalty orders impugnedin Writ Petition Nos. 11604,11593,11818, 11596 and11923 of2022 which finds mention at internal page5of thecommonjudgment dated 14.06.2023, is as under;in Writ Petition Nos. 11604,11593,11818, 11596 and11923 of2022 which finds mention at internal page5of thecommonjudgment dated 14.06.2023, is as under; 7.On a specific enquiry made by us to the learned counsel[for][ the]petitioner, he submits that the petitioner did not make payment of anypetitioner, he submits that the petitioner did not make payment of any amount towards 25% deposit condition imposed by the judgmentdated 14.06.2023. He submits that the petitioner filed review petitionbeing I.A.No.l of 2023 in W.P.No. 11923 of 2022. He[submits][ that][ in]the rest of the writ petitions decided by the common judgment dated14.06.2023, also, review petitions are filed which are pending and inview thereof the condition of deposit of 25% was not complied by thepetitioner in any of the cases for the AY(s) as aforesaid.[He][ submits]thatfor, therest of the AYs,other than the one involvedinthispetition, penalty orders have also been passed and filing of the writpetitions challenging those orders is under process. 8.Learned counsel for the petitioner submits that, in[the][ review]petitions there is no stay on the common judgment dated[14.06.2023.]petitions there is no stay on the common judgment dated[14.06.2023.]9.On considerationof theaforesaid submission, weareof theconsidered view that the submission advanced for not depositing 25%of the penalty amount as was ordered by the Co-ordinate[Bench][ in][ the]writ petition Nos. 11923 of 2022 85 batch vide common judgment dated14.06.2023isunsustainable.Evenifreviewispendirig,merependency of the review petition cannot be a ground not to comply withthe condition in the judgment. In our view the opportunity of personalhearing to the petitioner was directed to be provided[biit][ there][ was]condition imposed of deposit of 25% as aforesaid, but the petitions didnot comply with the condition subject to which the opportunity wasgranted.Consequently, the petitioner cannot now complainof theconsidered view that the submission advanced for not depositing 25%of the penalty amount as was ordered by the Co-ordinate[Bench][ in][ the]writ petition Nos. 11923 of 2022 85 batch vide common judgment dated14.06.2023isunsustainable.Evenifreviewispendirig,merependency of the review petition cannot be a ground not to comply withthe condition in the judgment. In our view the opportunity of personalhearing to the petitioner was directed to be provided[biit][ there][ was]condition imposed of deposit of 25% as aforesaid, but the petitions didnot comply with the condition subject to which the opportunity wasgranted.Consequently, the petitioner cannot now complainof the violation of the principle of natural justice of not affording opportunityof personal hearing and the impugned ordernow passed,tobecontrarytothedirectionsof thisCourtinpreviouswritpetitionNo. 11923 of 2023 85 batch. 10. 10.The submission of the learned counsel for the petitioner that thecondition of deposit of 25% imposed vide judgment dated14.06.2023could not be imposed,is a submission which is not openforthepetitioner to raise in this wnt petition nor for us to consider thesame.The reason is that in the present writ petition, we have not to enterinto such aspect, being bound by judicial disciplineand judicialpropriety, the judgment dated 14.06.2023 being of aCo-ordinateBench. 11. violation of the principle of natural justice of not affording opportunityof personal hearing and the impugned ordernow passed,tobecontrarytothedirectionsof thisCourtinpreviouswritpetitionNo. 11923 of 2023 85 batch. 10. 10.The submission of the learned counsel for the petitioner that thecondition of deposit of 25% imposed vide judgment dated14.06.2023could not be imposed,is a submission which is not openforthepetitioner to raise in this wnt petition nor for us to consider thesame.The reason is that in the present writ petition, we have not to enterinto such aspect, being bound by judicial disciplineand judicialpropriety, the judgment dated 14.06.2023 being of aCo-ordinateBench. 11. 11.The petitioner, in order to claim the benefit of the judgmentdated. 14.06.2023, ought to have complied with the condition imposed'm the judgment. The petitioner having failed to complywiththecondition of the judgment subject to which personal hearing was to beafforded, even if the same has not been afforded in passing the orderimpugned in the present writ petition, we are not inclined to interferewith the impugned order.dated. 14.06.2023, ought to have complied with the condition imposed'm the judgment. The petitioner having failed to complywiththecondition of the judgment subject to which personal hearing was to beafforded, even if the same has not been afforded in passing the orderimpugned in the present writ petition, we are not inclined to interferewith the impugned order. 12. 12.In the facts and circumstances of the present case, the plea ofviolation of the principles of natural justice cannot be sustained.violation of the principles of natural justice cannot be sustained. 13.The Writ Petition is dismissed.It is open for the authority toproceed further as per law.proceed further as per law. \ 14.The petitioner if files any other writ petition or avails any otherremedy under the statute against the order(s) of penalty imposed forthe AY(s) which were subject matter of writ petition[Nos.][ 11923][ of][ 2023]85 batch decided vide judgment, dated 14.06.2023, he shall along withsuch petition annex copy of this judgment.remedy under the statute against the order(s) of penalty imposed forthe AY(s) which were subject matter of writ petition[Nos.][ 11923][ of][ 2023]85 batch decided vide judgment, dated 14.06.2023, he shall along withsuch petition annex copy of this judgment. No order as to costs. As a sequel thereto, miscellaneous petitions, if any pending, shallalso stand closed. SD/- V. DIWAKAR DEPUTY REGISTRAR //TRUE COPY// ^EenOTl OFFICER To 1. One CC toSri Javvaji Sarath Chandra, Advocate 2. One CC to Sri Vijay Kumar Punna, Standing Counsel[ ] 3. One CC to Ms. Iswarya, Advocate 4. Two CD Copies cvss / >r: HIGH COURT DATED:28/02/2024 ■5FA^SD?^ORDERoXmo2 9 JUL 202^1C9'kWP.No.5175 of 2024 i’fSPATC'i^SJrtW*'-**'’...J. DISMISSING THE W.P.WITHOUT COSTS