Wp(C)/11793/2021 Of Joseph Kutty v. Commissioner Of Income Tax (International Taxation)

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 22 DAY OF FEBRUARY 2024 / 3RD PHALGUNA, 1945WP(C) NO. 11793 OF 2021 PETITIONER/S: JOSEPH KUTTY,AGED 45 YEARS THENGUVILA VEEDU, KARIYARA, PUNALUR P.O., KOLLAM-691332. BY ADVS.K.I.MAYANKUTTY MATHERR.JAIKRISHNA RESPONDENT/S: 1COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION),OFFICE OF THE COMMISSIONER OF INCOME TAX (INTERNATIONALTAXATION), ROOM NO. 741,BMTC BUILDING, 7TH FLOOR, 80FT ROAD, KORAMANGALA P.O., BANGALORE-560095.OFFICE OF THE COMMISSIONER OF INCOME TAX (INTERNATIONALTAXATION), ROOM NO. 741,BMTC BUILDING, 7TH FLOOR, 80FT ROAD, KORAMANGALA P.O., BANGALORE-560095. 2ASSISTANT COMMISSIONER OF INCOME TAX,OFFICE OF ASSISTANT COMMISSIONER OF INCOME TAX, DCIT CIRCLE INTERNATIONAL TAXATION, AAYKAR BHAWAN, 1ST FLOOR, KAWDIAR P.O., THIRUVANANTHAPURAM-695003.OFFICE OF ASSISTANT COMMISSIONER OF INCOME TAX, DCIT CIRCLE INTERNATIONAL TAXATION, AAYKAR BHAWAN, 1ST FLOOR, KAWDIAR P.O., THIRUVANANTHAPURAM-695003. 3INCOME TAX OFFICER,WARD NO. 1 AND TPS, OFFICE OF INCOME TAX OFFICER, INCOME TAX OFFICE, RAILWAY STATION ROAD, KOLLAM P.O., KOLLAM-691001.BY ADVS.P.K.RAVINDRANATHA MENON (SR.)WARD NO. 1 AND TPS, OFFICE OF INCOME TAX OFFICER, INCOME TAX OFFICE, RAILWAY STATION ROAD, KOLLAM P.O., KOLLAM-691001.BY ADVS.P.K.RAVINDRANATHA MENON (SR.) P.G.JAYASHANKAR JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALAKEERTHIVAS GIRI THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON22.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dated this the 22[nd] day of February, 2024 The petitioner who is a Non-resident Indian, anassessee under the provisions of the Income Tax Act andRules made thereunder. For the assessment year 2017-18, the petitioner had filed return of his income on27.03.2018 declaring total income of Rs.5,61,000/- andon the said income remitted the tax of Rs.46,256/-. 2.The petitioner was issued a notice underSection 143(2) of the Income Tax Act,1961 (hereinafterreferred to as ‘IT Act,1961’). Thereafter, another noticeunder Section 142(1) was issued to the petitioner on21.11.2019 requiring the petitioner to explain the sourceof cash deposits during the demonetization period. Thepetitioner did not file any reply to the said notice. A letterdated 02.12.2019 was addressed to the petitioner askingthe petitioner to file his objection/explanation for theproposed addition of Rs.10,00,000/- being cash depositduring the demonetization period. The petitioner choosenot to respond to the said letter also. 3.24.12.2019 was the last date for the responseas per Ext.P6, the said letter was also duly delivered tothe email address of the petitioner. Despite theseopportunities, the petitioner did not file any reply, andthereafter, the order was passed on 25.12.2019. 4.Learned counsel for the petitioner submits thatthe last notice was served on the petitioner on24.12.2019 giving the petitioner only a few hours to filereply and on the very next day ie.,25.12.2019, which wasa ‘Christmas day’ the assessment order came to bepassed. 5.The petitioner filed revision against the saidassessment order under Section 264 of the I.T Act, 1961. The Revisional Authority without affording anopportunity of hearing has passed the impugned order inExt.P11. 6.Sri.P.G Jayashankar, learned Senior StandingCounsel for the Income Tax Department, has submittedthat the petitioner was afforded more than sufficientopportunity to explain the source of cash deposit of 4.Learned counsel for the petitioner submits thatthe last notice was served on the petitioner on24.12.2019 giving the petitioner only a few hours to filereply and on the very next day ie.,25.12.2019, which wasa ‘Christmas day’ the assessment order came to bepassed. 5.The petitioner filed revision against the saidassessment order under Section 264 of the I.T Act, 1961. The Revisional Authority without affording anopportunity of hearing has passed the impugned order inExt.P11. 6.Sri.P.G Jayashankar, learned Senior StandingCounsel for the Income Tax Department, has submittedthat the petitioner was afforded more than sufficientopportunity to explain the source of cash deposit of Rs.10,00,000/- during the demonetization period. Thepetitioner never came forward with any explanationdespite 3 notices having been served on the petitioner. Inrespect of the last notice, the petitioner filed reply on26.12.2019. However, before the reply could be reached,the impugned assessment order came to be passed.Therefore, the petitioner cannot make any grievance inrespect of not having been afforded the opportunity asalleged or otherwise. The petitioner was afforded enoughopportunities, but failed to avail the opportunity grantedand therefore, the assessment order does not suffer fromany illegality as contended by the learned counsel for thepetitioner. 7.In respect of the submission by the learnedcounsel for the petitioner that no opportunity of hearingwas afforded to the petitioner by the Revisional Authority,the learned counsel for the respondents submits that thescheme of Section 264 of the I.T Act of 1961 does notcontemplate providing opportunity of hearing to theassessee. 8.I have considered the submissions. This Court does not agree with the contention of the learned counselfor the petitioner that the petitioner was not given anopportunity of hearing to explain the source of cashdeposit of Rs.10,00,000/- during the demonetizationperiod. The facts mentioned in the counter affidavitwould disclose that the petitioner has failed to avail anopportunity of hearing, despite having been served withnotices. Therefore, the petitioner probably cannotcontend that he was not afforded an opportunity ofhearing. 9.So far as the question of giving an opportunityof hearing by the Revisional Authority is concerned,though Section 264 of the I.T Act does not specificallyprovides giving an opportunity of hearing, but theopportunity of hearing has to be read in the provision,inasmuch as the revisional order has civil consequencesand without affording an opportunity of hearing, theorder would not be sustainable. Since, there has beenviolation of the principles of natural justice by the WPC No 11793 of 2021 6 Revisional Authority in passing the impugned orderwithout affording an opportunity of hearing, Ext.P11order is set aside and the matter is remanded back to the1[st] respondent. The 1[st] respondent is directed to issue anotice of hearing to the petitioner, and after hearing thepetitioner pass a fresh order, in accordance with the law.It is made clear that, only one notice shall be issued tothe petitioner and if the petitioner fails to avail theopportunity of hearing in pursuance to the said notice, nofurther opportunity shall be afforded to the petitioner. With the aforesaid directions, the present writpetition stands allowed in part. Sd/- DINESH KUMAR SINGH JUDGE AP WPC No 11793 of 2021 APPENDIX OF WP(C) 11793/2021