Wp(C)/12052/2021 Of Intergrow Brands Private Limited v. The Additional/Joint/Deputy/Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN TUESDAY, THE 11 DAY OF JANUARY 2022 / 21ST POUSHA, 1943WP(C) NO. 12052 OF 2021 PETITIONER: INTERGROW BRANDS PRIVATE LIMITED,62/1814A AJAY VIHAR, M.G. ROAD, ERNAKULAM-682016, REPRESENTED BY ITS MANAGING DIRECTOR, MR. ASHOK MANI. BY ADVS.JOSEPH MARKOSE (SR.)V.ABRAHAM MARKOSABRAHAM JOSEPH MARKOSISAAC THOMASALEXANDER JOSEPH MARKOSSHARAD JOSEPH KODANTHARA RESPONDENT/S: 1THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX,INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110001.INCOME TAX,INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110001. 2THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX,NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110001.NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110001. 3ASSISTANT COMMISSIONER OF INCOME TAX,CORPORATE CIRCLE-1(1), KOCHI-682018.CORPORATE CIRCLE-1(1), KOCHI-682018. 4THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-682018. R BY JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 12052 OF 2021 ..2.. JUDGMENT The petitioner is a company, engaged in themanufacture of spices and spice extracts. 2. For the assessment year 2018-19, the petitioner filed Ext.P2 return declaring net loss of Rs.16.72 crores.The return filed by the petitioner was taken up forscrutiny assessment by issuance of notice under Section143(2) of the Income Tax Act, 1961 (hereinafterreferred to as the 'Act' for short). However, thepetitioner was later informed that the scrutinyassessment is being taken under the FacelessAssessment Scheme under Section 143(3A) before the1[st] respondent. According to the petitioner, thepetitioner was issued with Ext.P4 show cause noticeunder Section 144B(xvi), asking the petitioner to showcause as to why the draft assessment therein shall not WP(C) NO. 12052 OF 2021 ..3.. be finalised. 15 days time was granted to the petitionerto submit explanation to Ext.P4 show cause notice. Thepetitioner sought for additional 10 days time forsubmitting explanation vide Ext.P5 letter. However,without granting sufficient time as sought for in Ext.P5,the draft assessment in Ext.P4 was finalised by Ext.P7assessment order. Ext.P7 was followed by Ext.P8penalty under Section 274 of the Act. Exts.P7 and P8orders are impugned in this writ petition. It iscontended by the petitioner that Exts.P7 and P8 areissued in total violation of principles of natural justice. 3. The learned Standing Counsel for therespondents submits that Ext.P8 is only a notice forpenalty. 4. Heard the learned senior counsel for thepetitioner and Sri.Jose Joseph, the learned StandingCounsel for the Income Tax Department. WP(C) NO. 12052 OF 2021 ..4.. 5.It is true that the petitioner has got analternate remedy by way of appeal under Section 246Aof the Act. However, Ext.P7 order is evidently issuedwithout giving reasonable opportunity to submitexplanation to Ext.P4 show cause notice, in spite of therequest for additional time sought for in Ext.P5. Sincethe petitioner was not granted adequate opportunity tosubmit explanation to the show cause notice, I find thatthere is violation of principles of natural justice inissuing Exts.P7 and P8 orders. Accordingly, Ext.P7order is set aside and the 1[st] respondent is directed topass fresh orders of assessment after granting areasonable opportunity of being heard after givingsufficient time to file objection to Ext.P4 show causenotice. The objections, if any to Ext.P4 show causenotice shall be filed by the petitioner within a period of WP(C) NO. 12052 OF 2021 ..5.. 15 days from the date on which the Department opens WP(C) NO. 12052 OF 2021 ..5.. 15 days from the date on which the Department opens up the link for filing objections. Since Ext.P7 has beenset aside, consequently, Ext.P8 notice for penalty willalso stands set aside. The writ petition is allowed to the above extent. Sd/- MURALI PURUSHOTHAMAN JUDGE SB/11/01/2022 WP(C) NO. 12052 OF 2021 ..6.. APPENDIX OF WP(C) 12052/2021 PETITIONER EXHIBITS Exhibit TRUE COPY OF THE ORDER DATED 28/05/2021 INP1WPC NO.11540/2021 PASSED BY THISHONOURABLE COURT.P1WPC NO.11540/2021 PASSED BY THISHONOURABLE COURT. Exhibit TRUE COPY OF THE RETURN ACKNOWLEDGMENT FORP2AY 2018-19 DATED 31/10/2018.P2AY 2018-19 DATED 31/10/2018. Exhibit TRUE COPY OF NOTICE ISSUED UNDER SECIONP3142(1) DATED 24/12/2020.P3142(1) DATED 24/12/2020. Exhibit TRUE COPY OF THE SHOW CAUSE NOTICE DATEDP404/05/2021 ISSUED BY THE 1ST RESPONDENT.P404/05/2021 ISSUED BY THE 1ST RESPONDENT. Exhibit TRUE COPY OF THE SCREENSHOT OF THE E-P5PROCEEDINGSEVIDENCINGSEEKINGOFENLARGEMENT OF TIME TO RESPOND TO SCNOBTAINED FROM THE INCOME TAX E-PROCEEDINGSPORTAL.P5PROCEEDINGSEVIDENCINGSEEKINGOFENLARGEMENT OF TIME TO RESPOND TO SCNOBTAINED FROM THE INCOME TAX E-PROCEEDINGSPORTAL. Exhibit TRUE COPY OF THE SCREENSHOT OF THE E-P6PROCEEDINGS EVIDENCING THE REASONS FORSEEKING OF ENLARGEMENT OF TIME TO RESPONDTO SCN OBTAINED FROM THE INCOME TAX E-PROCEEDINGS PORTAL.P6PROCEEDINGS EVIDENCING THE REASONS FORSEEKING OF ENLARGEMENT OF TIME TO RESPONDTO SCN OBTAINED FROM THE INCOME TAX E-PROCEEDINGS PORTAL. Exhibit TRUE COPY OF THE ASSESSMENT ORDER DATEDP727/05/2021 TOGETHER WITH COMPUTATION SHEETAND NOTICE OF DEMAND.P727/05/2021 TOGETHER WITH COMPUTATION SHEETAND NOTICE OF DEMAND. Exhibit TRUE COPY OF THE PENALTY NOTICE UNDERP8SECTION 274 OF THE ACT ISSUED BY THE 1STRESPONDENT.P8SECTION 274 OF THE ACT ISSUED BY THE 1STRESPONDENT. Exhibit TRUE COPY OF THE JUDGMENT DATED 10/05/2021P9IN WPC NO.5234/2021 PASSED BY THE DELHIHIGH COURT AND REPORTED IN (2021) 127TAXMANN.COM 194 (DELHI).P9IN WPC NO.5234/2021 PASSED BY THE DELHIHIGH COURT AND REPORTED IN (2021) 127TAXMANN.COM 194 (DELHI). WP(C) NO. 12052 OF 2021 ..7.. Exhibit TRUE COPY OF THE JUDGMENT REPORTEDIN 1994P10KLJ TAX CASES 24 MS JEWELLERY VS.ASSISTANT COMMISSIONER (ASSESSMENT)