Wp(C)/12595/2023 Of Asamannoor Service Co-Operative Bank Ltd v. The Income Tax Officer Ward-2

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 17 DAY OF OCTOBER 2023 / 25TH ASWINA, 1945WP(C) NO. 12595 OF 2023 PETITIONER: ASAMANNOOR SERVICE CO-OPERATIVE BANK LTD NO.317.,ASAMANNOR, ERNAKULAM -683549 REPRESENTED BY ITS SECRETARY KIRAN P. ASHOK.BY ADV PREMJIT NAGENDRAN RESPONDENT: THE INCOME TAX OFFICER WARD-2 ,ALUVA , PIN- 683101. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON17.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dated this the 17[th] day of October, 2023 The present writ petition has been filed by thepetitioner questioning Ext.P5 order and Ext.P6 notice. 2.The petitioner is a Co-operative society whoprovides credit facilities to its members and receivedeposits from them. According to the petitioner, for theassessment year 2019-20, they did not have any taxableincome under the Income Tax Act and they did not filereturn for the said assessment year. The Income TaxOfficer has issued a notice under Section 148A(a) ofthe Act dated 27.01.2023 to the petitioner stating thatthe details of the information of the enquiry conductedon which reliance has beenplaced along with thedocuments enclosed in the notice suggest that theincome of the petitioner had escaped assessment andtherefore, the petitioner was required to so far as videimpugned notice in Ext.P5 notice under Section148A(a) Income Tax Act should not be issued. The The petitioner is a Co-operative society who petitioner was asked to submit his reply to the noticealong with the supporting documents, if any. Thepetitioner submitted the reply to the said show causenotice on 01.02.2023. Thereafter, notice under Section148(A)(b) was issued to the petitioner calling upon thepetitioner to show cause why a notice under Section148 should not be issued. The petitioner was requiredto file reply to the said notice on or before 10.03.2023.The petitioner submitted reply to the said notice issuedunder Section 148(A)(b) in Ext.P4. The grievance of thepetitioner is that without affording an opportunity ofbeing heard mandated under Section 148A(d), an orderdated 28.03.2023 produced as Ext.P5 has been passed,and after obtaining sanction from the competentauthority, the assessing authority issued Ext.P6 noticeunder Section 148 to the petitioner. 3.Learned counsel for the petitioner submitsthat when Section 148A(b) mandates that a personalhearing and without an opportunity of being heard, theorder in Ext.P5 is in violation of Section 148A(b) therefore, ExtP5 order and Ext.P6 notice under Section148 are against the law and liable to be set aside. 4.Sri.Christopher Abraham, learned StandingCounsel for the Income Tax Department submitted that‘being heard’ does not mean that personal hearing is tobe afforded to an assessee under Section 148A(b). Themanner in which the petitioner is to be heard isprescribed under Section 148 A(b). The petitioner wasgiven an opportunity as provided under Section148A(b) except for hearing which is not mandatory.Therefore, he submitted that this Court need notinterfere with Ext.P5 impugned order and Ext.P6impugned notice and the writ petition may bedismissed. 5.Having considered the submissions of thelearned counsel for the petitioner as well as therespondent and perused the documents. 6. Heading of Section 148A itself providesconducting of enquiry, providing opportunity beforeissuance of notice under Section 148. Section148A(b)reads as under: 5.Having considered the submissions of thelearned counsel for the petitioner as well as therespondent and perused the documents. 6. Heading of Section 148A itself providesconducting of enquiry, providing opportunity beforeissuance of notice under Section 148. Section148A(b)reads as under: “Provide an opportunity of being heard to the assessee,with the prior approval of specified authority, by serving uponhim a notice to show cause within such time, as may be specifiedin the notice, being not less than 7 days and but not exceeding30 days from the date on which such notice is issued, or suchtime, as may be extended by him on the basis of an applicationin this behalf, as to why a notice u/s 148 should not be issued onthe basis of information which suggests that incomedischargeable to tax has escaped assessment in his case for therelevant assessment year and results of enquiry conducted, ifany as per clause (a)” 7.Section 148A(b) begins with “provide an opportunity of being heard to the assessee”. Hearingdoes not mean filing reply to the show cause notice. Ifthe provision of this Section contemplates opportunityof being heard that has to be construed as personalhearing. Therefore, I do not find substance in thesubmission of learned Standing Counsel that anopportunity of being heard to the assesseecontemplated under Section 148A(b) does notnecessarily mean personal hearing. In my view,opportunity of being heard means an opportunity ofpersonal hearing to the assessee. 8.Admittedly, no such opportunity of beingheard was given to the petitioner before passing Ext.P5 AP order and issuing Ext.P6 notice. I find Ext.P5 order andExt.P6 notice are unsustainable. Therefore, the sameare set aside. The petitioner is directed to appearbefore the respondent on or before 27.10.2023 with allthe relevant document in his possession of being heard.After considering the submission of the assessee, theassessing officer is required to pass a fresh order, andthereafter, proceed with the matter. It is made clearthat if the petitioner does not appear on 27.10.2023, nofurther opportunity shall be granted to the petitionerfor hearing. With the aforesaid direction, the present writpetition stands finally disposed of. Sd/- DINESH KUMAR SINGH JUDGE APPENDIX OF WP(C) 12595/2023 PETITIONER EXHIBITS Exhibit P-1NOTICE NO. ITBA/COM/F/17/2022- 23/1049148617(1) DATED 27.01.2023 ISSUED BYTHE RESPONDENT.THE RESPONDENT. Exhibit P-2A TRUE COPY OF THE REPLY OF THE PETITIONER DATED 01.02.2023DATED 01.02.2023 Exhibit P-3 A TRUE COPY OF NOTICE NO. ITBA/AST/F/148A(SCN)/ 2022-23/1050325679 (1) DATED 02.03.2023 ISSUED BY THE RESPONDENT(1) DATED 02.03.2023 ISSUED BY THE RESPONDENT Exhibit P-4 A TRUE COPY OF THE REPLY OF THE PETITIONER DATED 08.03.2023DATED 08.03.2023 Exhibit P-5 A TRUE COPY OF THE ORDER UNDER SECTION 148A(D)NO. ITBA/AST/F/148A/2022-23/1051469323 (1) DATED 28.03.2023 ISSUED BY THE RESPONDENT148A(D)NO. ITBA/AST/F/148A/2022-23/1051469323 (1) DATED 28.03.2023 ISSUED BY THE RESPONDENT Exhibit P-6 A TRUE COPY OF THE NOTICE UNDER SECTION 148NO. ITBA/AST/S/148/2022-23/1051490565 (1) DATED 28.03.2023 ISSUED BY THE RESPONDENTNO. ITBA/AST/S/148/2022-23/1051490565 (1) DATED 28.03.2023 ISSUED BY THE RESPONDENT RESPONDENT EXHIBITS EXHIBIT R1(A)COPY OF THE JUDGMENT OF THE SUPRIME COURT IN THE CASE OF ANSHUL JAIN V. THE PRINCIPALCOMMISSIONER OF INCOME TAX AND ANOTHER 449 ITR 256 (SC)IN THE CASE OF ANSHUL JAIN V. THE PRINCIPALCOMMISSIONER OF INCOME TAX AND ANOTHER 449 ITR 256 (SC) EXHIBIT R1(B)COPY OF THE JUDGMENT OF THE PUNJAB AND HARIYANA HIGH COURT IN THE CASE OF ANSHUL HARIYANA HIGH COURT IN THE CASE OF ANSHUL JAIN V. THE PRINCIPAL COMMISSIONER OF INCOME TAX AND ANOTHER 449 ITR 251 (P AND H)INCOME TAX AND ANOTHER 449 ITR 251 (P AND H) EXHIBIT R1(C) Exhibit P-6 A TRUE COPY OF THE NOTICE UNDER SECTION 148NO. ITBA/AST/S/148/2022-23/1051490565 (1) DATED 28.03.2023 ISSUED BY THE RESPONDENTNO. ITBA/AST/S/148/2022-23/1051490565 (1) DATED 28.03.2023 ISSUED BY THE RESPONDENT RESPONDENT EXHIBITS EXHIBIT R1(A)COPY OF THE JUDGMENT OF THE SUPRIME COURT IN THE CASE OF ANSHUL JAIN V. THE PRINCIPALCOMMISSIONER OF INCOME TAX AND ANOTHER 449 ITR 256 (SC)IN THE CASE OF ANSHUL JAIN V. THE PRINCIPALCOMMISSIONER OF INCOME TAX AND ANOTHER 449 ITR 256 (SC) EXHIBIT R1(B)COPY OF THE JUDGMENT OF THE PUNJAB AND HARIYANA HIGH COURT IN THE CASE OF ANSHUL HARIYANA HIGH COURT IN THE CASE OF ANSHUL JAIN V. THE PRINCIPAL COMMISSIONER OF INCOME TAX AND ANOTHER 449 ITR 251 (P AND H)INCOME TAX AND ANOTHER 449 ITR 251 (P AND H) EXHIBIT R1(C) COPY OF THE JUDGMENT OF THE HIGH COURT OF KERALA IN WP(C) NO. 37527/2022 IN THE CASE OF M/S VISWABHARATHI MEDICALS V INCOME TAX OFFICER DATED 07/12/2022.KERALA IN WP(C) NO. 37527/2022 IN THE CASE OF M/S VISWABHARATHI MEDICALS V INCOME TAX OFFICER DATED 07/12/2022.