Wp/9013/2022 Of Gurumukh Ahuja v. Income Tax Department

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPURBEFORE HON’BLE SHRI JUSTICE SHEEL NAGU & HON’BLE SHRI JUSTICE MANINDER S. BHATTI ON THE 26[th] OF APRIL, 2022 WRIT PETITION NO.9013 OF 2022 Between:-GURUMUKH AHUJA S/O PRAHLAD AHUJA, AGED ABOUT 44 YEARS, OCCUPATION: BUSINESS R/O F-12, PANCHSHEEL NAGAR, NARMADA ROAD, JABALPUR (M.P.) (BY SHRI G.N. PUROHIT, SENIOR ADVOCATE WITH SHRI NITIN AGRAWAL, ADVOCATE) .....PETITIONER AND 1. INCOME TAX DEPARTMENT THROUGH INCOME TAX OFFICER NATIONAL FACELESS E-ASSESSMENT CENTRE, DELHI, INDIA. 2. INCOME TAX OFFICER WARD 2(1) INCOME TAX OFFICE AAYKAR BHAWAN,NAPIER TOWN JABALPUR M.P ....RESPONDENTS (BY SHRI SANJAY LAL, ADVOCATE) WRIT PETITION NO.9014 OF 2022 Between:-GURUMUKH AHUJA S/O PRAHLAD AHUJA, AGED ABOUT 44 YEARS, OCCUPATION: BUSINESS R/O F-12, PANCHSHEEL NAGAR, NARMADA ROAD, JABALPUR (M.P.) (BY SHRI G.N. PUROHIT, SENIOR ADVOCATE WITH SHRI NITIN AGRAWAL, ADVOCATE) .....PETITIONER AND 1. INCOME TAX DEPARTMENT THROUGH INCOME TAX OFFICER NATIONAL FACELESS E-ASSESSMENT CENTRE, DELHI, INDIA. 2. INCOME TAX OFFICER WARD 2(1) INCOME TAX OFFICE AAYKAR BHAWAN,NAPIER TOWN JABALPUR M.P (BY SHRI SANJAY LAL, ADVOCATE) ....RESPONDENTS These writ petitions coming on for admission this day, Hon’ble Shri Justice Maninder S. Bhatti passed the following: ORDER As the issue involved in both the writ petitions is similar, theyare heard analogously and are being decided by a common order. However,for the sake of clarity and convenience the facts of W.P. No.9013 of 2022 arebeing taken into consideration. 2.The petitioner has filed the present writ petition challengingthree even dated orders, i.e. 28-03-2022 contained in Annexure-P/20,Annexure-P/21 and Annexure-P/22 respectively. 3.The facts which are setforth in the petition are to the effect thatpetitioner herein, who is an individual and regular income tax assessee,submitted his return on 3-8-2021 (Annexure-P/3). Thereafter, the petitionerreceived a notice under Section 142(1) of the Income Tax Act, 1961 [forbrevity “the Act”] dated 23-7-2021 by which the petitioner was called uponto provide details pertaining to his business activities. 4.The petitioner submitted his reply to the said notice, whereafterthe petitioner was issued notices under Section 142(1) of the Act which arecontained in Annexure-P/6 to Annexure-P/9. Thereafter, the petitioner wasissued another notice dated 20-01-2022, Annexure-P/14. In response to thesaid notice the petitioner submitted his reply and then during course ofprocess he was issued another notice dated 23-3-2022, Annexure-P/18calling upon to submit details pertaining to the issue raised in the noticedated 23-03-2022. 5.In response to the notice dated 23-03-2022 the petitionersubmitted his reply dated 27-03-2022 which is contained in Annexure-P/19.In his reply the petitioner submitted that an opportunity of personal hearingbe afforded to petitioner before passing a final order. However, respondentspassed final assessment order which is contained in Annexure-P/20. 6.The petitioner has challenged the assessment order contained inAnnexure-P/20. The order further ensued in a notice of demand underSection 156 of the Act as well as notice for penalty under Section 271(1)(c)of the Act, which are contained in Annexure-P/21 and Annexure-P/22respectively. Thus, the petitioner has approached this Court challenging theorder dated 28-03-2022, Annexure-P/20, notice of demand dated 28-03-2022, Annexure-P/21 and notice for penalty dated 28-03-2022 contained inAnnexure-P/22. 6.The petitioner has challenged the assessment order contained inAnnexure-P/20. The order further ensued in a notice of demand underSection 156 of the Act as well as notice for penalty under Section 271(1)(c)of the Act, which are contained in Annexure-P/21 and Annexure-P/22respectively. Thus, the petitioner has approached this Court challenging theorder dated 28-03-2022, Annexure-P/20, notice of demand dated 28-03-2022, Annexure-P/21 and notice for penalty dated 28-03-2022 contained inAnnexure-P/22. 7.Counsel for petitioner submits that the issue in question, in fact,revolves around the notice dated 23-03-2022, Annexure-P/18 by which thepetitioner was called upon to show cause, as to why the proposed variationshould not be made in the assessment for the Assessment Year 2014-15. Inresponse to the same, the petitioner submitted his reply dated 27-03-2022contained in Annexure-P/19. Learned counsel for petitioner submits thatupon receipt of notice which was issued to him under Section 142 of the Act,he demanded an opportunity of physical personal hearing, which has notbeen afforded to him and, therefore, the entire proceedings have beenvitiated. 8.Learned counsel for petitioner while taking this Court to Section144-B of the Act has submitted that an opportunity of personal hearing ought to have been afforded to the petitioner. He also referred to Section 142(1) ofthe Act and submitted that an opportunity of personal hearing was notafforded to the petitioner. He strenuously urged that opportunity of hearingis not merely an empty formality. Learned counsel for petitioner whiletaking this Court to the provision of Section 144B(7)(vii) of the Actsubmitted that the said provision specifically postulates an opportunity to theassessee to show cause as to why the assessment should not be completedand it is the right of the assessee to seek personal hearing, so as to make hisoral submissions and present his case before the Income Tax Authority. 9.Learned counsel for petitioner thus, relied upon the decision ofthe High Court of Judicature at Bombay passed in Writ Petition No.1625 of2021 [Mantra Industries Limited vs. National Faceless Assessment Centre(NFAC or NeAC) & Ors.] and has prayed for quashment of the impugnedorder and notices. 10.Per contra, learned counsel for respondents submits that thepetitioner was well informed about the process of personal hearing throughvirtual mode, inasmuch as during outbreak of Covid-19, physical hearing notallowed. Thus, as per Faceless Assessment Scheme, provisions were madeto afford an opportunity of hearing to the assessee through virtual mode. Learned counsel submitted that even the said option was given to thepetitioner as well, but he did not avail the same. 11.Learned counsel for Revenue by placing reliance upon thedecision of a Co-ordinate Bench of this Court in Writ Petition No.11258 of2021, dated 28-01-2022 and the orders passed by the High Court of Delhi inW.P.(C) No.965/2021, dated 29-01-2021 and the Apex Court in the case ofCommissioner of Income Tax vs. Vijaybhai N. Chandrani, decided on 18-7-2013, submitted that that the instant petition deserves to be dismissed, as thesame has been filed on misconceived and untenable grounds. 12.We have heard learned counsel for parties at length. 13.Before dealing with the issue, it would be appropriate to refer toSection 144-B of the Act. Relevant parts of the said provision are extractedhereunder : “144B.(1).Notwithstanding anything to thecontrary contained in any other provisions of this Act, theassessment under sub-seiction (3) of Section 143, in thecases referred to in sub-section (2), shall be made in afaceless manner as per the following procedure, namely - 12.We have heard learned counsel for parties at length. 13.Before dealing with the issue, it would be appropriate to refer toSection 144-B of the Act. Relevant parts of the said provision are extractedhereunder : “144B.(1).Notwithstanding anything to thecontrary contained in any other provisions of this Act, theassessment under sub-seiction (3) of Section 143, in thecases referred to in sub-section (2), shall be made in afaceless manner as per the following procedure, namely - (vii)in a case where a variation is proposed inthe draft assessment order or final draft assessment orderor revised draft assessment order, and an opportunity isprovided to the assessee by serving a notice calling uponhim to show cause as to why the assessment should not becompleted as per the such draft or final draft or reviseddraft assessment order, the assessee or his authorizedrepresentative, as the case may be, may request forpersonal hearing so as to make his oral submissions orpreset his case beore the income-tax authority in anyunit.” 14.Thus, a perusal of the aforesaid provision incorporated in thestatute books reveals, that an opportunity of personal hearing is providedunder Section 144B(7)(vii) of the Act, however, it does not postulate thathearing should be “physical”. In the present case, the most important aspectof the matter is, notice dated 20-01-2022, Annexure-P/14 at page number 56of the compilation of the petition. The last paragraph of this notice isimportant, where it transpires that prior to this notice the petitioner hadsought for an opportunity of personal hearing while appearing physically.Thus, while dealing with request of the petitioner in the last paragraph of thenotice the petitioner was advised in the following terms : “Further, in your response, you have requested forpersonal hearing. In this connection it is stated that in theFaceless Assessment Scheme there is no provision for physicalhearing and physical hearing is altogether not permissible. Theguidelines relating to Faceless Assessment Scheme are attachedas Annexure to 142(1). You are requested to go through the same and opt for available methods of hearing through procedureas mentioned in the Annexure.” 15.A perusal of operative paragraph of the aforesaid notice makes itabundantly clear that way-back on 20-01-2022, it was made clear to thepetitioner that by virtue of the Faceless Assessment Scheme, there was noprovision for physical hearing and physical hearing was not permissible.Thus, the petitioner was requested to go through the guidelines relating toFaceless Assessment Scheme and accordingly opt available modes of hearingthrough the procedure as mentioned therein. 16.Interestingly, the petitioner submitted reply to the notice dated20-01-2022 which is contained in Annexure-P/15 at page number 58 of thememo of writ petition. This notice is not only important, but also relevantfor disposal of this writ petition, inasmuch as, upon receipt of notice dated20-01-2022 the petitioner while submitting his reply on 30-01-2022 did notdispute the last paragraph of the notice to show cause dated 20-01-2022,meaning thereby, the petitioner acquiesced to the method which was advisedby the respondent for the purposes of personal hearing. Hence, the reply ofthe petitioner, Annexure-P/15 at page number 58 of the compilation makes itabundantly clear, that even after receipt of notice dated 20-01-2022 thepetitioner did not oppose it nor even dealt with the last paragraph of the notice, meaning thereby, the petitioner accepted the same without any demuror protest. notice, meaning thereby, the petitioner accepted the same without any demuror protest. 17.However, contention of the petitioner is that he demanded anopportunity of physical hearing vide reply which is contained in Annexure-P/19, which ought to have been taken into consideration. Again, ifAnnexure-P/18 and Annexure-P/19 are perused, the same would reveal thatAnnexure-P/18 is another notice issued to the petitioner, dated 23-03-2022,and in this notice also, in the last paragraph the petitioner was again apprisedof the process of video conferencing for the purposes of hearing, which isevident from perusal of page number 102 of the memo of petition. Despitethis the petitioner in his reply dated 27-03-2022, Annexure-P/19 demandedphysical hearing, his request in our considered view was misconceived. 18.Apparently, an opportunity in accordance with law wasprovided to the petitioner, and the petitioner was well advised by respondentsto take recourse to virtual mode of hearing through the guidelines relating toFaceless Assessment Scheme, which the petitioner did not opt for. Duringcourse of arguments, the petitioner has provided the screenshots of theassessment home page,which shows that though video conferencing optionwas available, but the petitioner did not opt for it, and still kept on insistingfor physical hearing. 19.In our considered view, the request so made by the petitioner forphysical hearing was misconceived and Section 144B(7)(vii) of the Act doesnot postulate physical hearing. A method for opportunity of hearing waswell advised to the petitioner, however, he did not opt for the same.Therefore, at this stage, the petitioner cannot challenge the order impugnedas well as subsequent notices, which are impugned in the instant petition andthe same deserves to be dismissed. 20.Accordingly, in view of similitude of issue involved in both thewrit petitions, the same are dismissed by this composite order. There shall beno order as to costs. ( SHEEL NAGU) JUDGE (MANINDER S. BHATTI ) JUDGE ac. Digitally signed by AJAY KUMAR CHATURVEDI DN: c=IN, o=HIGH COURT OF MADHYA PRADESH, ou=HIGH COURT OF MADHYA PRADESH, AJAY KUMAR postalCode=482001, st=Madhya Pradesh, 2.5.4.20=3796e6c1d0b4cce5f8c8561cdbb3a238176d46898b715c1662ee8b05eed57eb0, pseudonym=7812D41F1F531DBC0B9219827A0B19AAEAA0618E, serialNumber=C8EAAC30EFBB2F0C7E41AE53BEEC562C515B38978E4597AA3C73D309F0F1FBB9, CHATURVEDIcn=AJAY KUMAR CHATURVEDI Date: 2022.05.06 11:34:55 +05'30'