Wp(C)/14803/2022 Of Shanavas M v. The Additional/Joint/Deputy/Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS THURSDAY, THE 19 DAY OF MAY 2022 / 29TH VAISAKHA, 1944 WP(C) NO. 14803 OF 2022 PETITIONER: SHANAVAS M.AGED 46 YEARSS/O. HAMSA, BROTHERS AUTOS, CITY CENTRE, CHANTHAKUNNU, NILAMBUR, MALAPPURAM DISTRICT, PIN 679 329 BY ADV O.D.SIVADAS RESPONDENTS: 1THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX THE NATIONAL FACELESS ASSESSMENT CENTRE, DELHI PIN 110 054 2THE INCOME TAX OFFICERTIRUR, MALAPPURAM DISTRICT, PIN 676 101 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON19.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No. 14803 of 2022---------------------------------------- Dated this the 19[th] day of May, 2022 JUDGMENT Petitioner is challenging Ext.P9 order of assessment issuedunder Section 147 of the Income Tax Act, 1961(for short the Act). 2. The grievance of the petitioner is that, sufficient opportunity was not granted to him to object to the proposedassessment, thereby violating the principles of natural justice.Petitioner contends that infringement of the aforesaid principles isglaring in the order of assessment and hence he has invoked thejurisdiction under Article 226 of the Constitution of India. 3. Sri.O.D.Sivadas, the learned counsel for the petitionerinvited my attention to the date of the showcause notice issued asExt.P7, and argued that, the said notice was uploaded only on26/3/2022- a Saturday, granting time only till 28/3/2022- Monday,to file the objection. The learned counsel also asserted that 27[th]March 2022, being a Sunday, petitioner did not have sufficientopportunity to effectively controvert the contentions in the showcause notice and therefore, Ext.P9 order is vitiated on accountof violation of the principles of natural justice. 4. Sri.Christopher Abraham, the learned Standing Counsel forthe Income Tax, on the other hand contended that sufficientopportunity was granted to the petitioner and that he had evenfiled his objections as evident from Ext.P8 reply notice, that toowithin the time granted. The learned counsel further contendedthat the objections raised by the petitioner were considered in theassessment order and hence this was not a fit case warrantinginterference under Article 226 of the Constitution of India,especially since petitioner has an effective remedy before theAppellate Authority. 5. I have considered the rival contentions raised on behalf ofthe petitioner as well as the respondents. 6. As rightly contended by the learned Standing Counsel,petitioner utilised the opportunity granted to him and filed anobjection to the showcause notice on 28/3/2022. Petitioner evenuploaded the necessary documents along with the objection. Thus,the opportunity granted to the petitioner to showcause waseffectively utilised by him. Of course, I observe from the replynotice that petitioner had mentioned about the very short time line provided for submitting his reply and also, his reference to therequest for more time to elaborate on the genuineness of thetransactions with supporting documents. However, the contentionsraised by the petitioner were dealt with by the assessing officer onmerits, as is evident from Ext.P9 order and the same wererejected. 6. As rightly contended by the learned Standing Counsel,petitioner utilised the opportunity granted to him and filed anobjection to the showcause notice on 28/3/2022. Petitioner evenuploaded the necessary documents along with the objection. Thus,the opportunity granted to the petitioner to showcause waseffectively utilised by him. Of course, I observe from the replynotice that petitioner had mentioned about the very short time line provided for submitting his reply and also, his reference to therequest for more time to elaborate on the genuineness of thetransactions with supporting documents. However, the contentionsraised by the petitioner were dealt with by the assessing officer onmerits, as is evident from Ext.P9 order and the same wererejected. 7. The jurisdiction of this Court under Article 226 of theConstitution of India does not warrant an appreciation of the meritsof an order of assessment, for which an effective remedy isavailable before the Appellate Authority. Though the time limitprovided to the petitioner was very short and bordered on theverge of denying an opportunity to effectively explain, still, sincepetitioner utilised the opportunity granted and even filed hisobjection with supporting documents, I do not find anyinfringement of the principles of natural justice, requiring this Courtto interfere under Article 226 of the Constitution of India. 8. I must observe at this juncture that, this Court has beennoticing a disturbing pattern on the part of the Income Taxdepartment by granting minimal time to assessees to explain oranswer showcause notices. The principles of natural justicemandate reasonable time to be given to the assessees to reply to showcause or other notices issued under the statute. The purposeof a showcause notice is to provide an opportunity to explain theallegations in the notice. Several steps precede the reply notice-collection of materials, verification of documents, appreciation ofthe allegations raised in the showcause notice, consultation withprofessionals etc. The aforesaid attributes that precede thepreparation of response alone make an effective reply. When evenminimal time to initiate the above mentioned steps is denied toassessees, this Court will be justified in exercising its extraordinaryjurisdiction under Article 226 of the Constitution of India tointerfere with such orders violating principles of natural justice. 9. However, adequacy of notice has to be determined on thebasis of facts in each case. In the instant case, petitioner cannotcomplain of violation of the principles of natural justice because,though short, petitioner utilised the limited opportunity granted tohim and filed an effective reply. In such circumstances, I am ofthe considered view that, the remedy of the petitioner, if any, is tomove the Appellate Authority challenging Ext.P9. 10. Since this writ petition had been pending on the files ofthis Court from 26/4/2022, the period spent by the petitionerpursuing this litigation from 26/4/2022, till the date of receipt of a 6 copy of this judgment shall stand excluded, while calculating the limitation period for preferring the statutory appeal. Reserving the aforementioned liberty this writ petition is dismissed. AJM Sd/-BECHU KURIAN THOMASJUDGE APPENDIX OF WP(C) 14803/2022 PETITIONER’S EXHIBITS : 10. Since this writ petition had been pending on the files ofthis Court from 26/4/2022, the period spent by the petitionerpursuing this litigation from 26/4/2022, till the date of receipt of a 6 copy of this judgment shall stand excluded, while calculating the limitation period for preferring the statutory appeal. Reserving the aforementioned liberty this writ petition is dismissed. AJM Sd/-BECHU KURIAN THOMASJUDGE APPENDIX OF WP(C) 14803/2022 PETITIONER’S EXHIBITS : Exhibit P1TRUE COPY OF THE NOTICE DATED 2.12.2021 ISSUED UNDER SECTION 142 (1) OF THE INCOME TAX ACT, BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2015-16.Exhibit P2TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER ON 4.1.2022 TO EXT.P1 NOTICE. Exhibit P3TRUE COPY OF THE CONSOLIDATED TRADING ANDPROFIT AND LOSS ACCOUNTS FOR THE YEAR 2015-16 ATTACHED ALONG WITH EXT.P2 Exhibit P4TRUE COPY OF THE NOTICE DATED 9.2.2022 ISSUED BY THE 1ST RESPONDENT UNDER SECTION 142(1) OF THE INCOME TAX ACT, TO THE PETITIONER, Exhibit P5TRUE COPY OF THE REPLY DATED 15.2.2022 SUBMITTED BY THE PETITIONER TO EXT.P4 NOTICE. Exhibit P6TRUE COPY OF THE CASH FLOW STATEMENT FOR THE ASSESSMENT YEAR THEN ENDED ON 31.3.2015, ENCLOSED ALONG WITH EXT.P5.Exhibit P7TRUE COPY OF THE SHOW CAUSE NOTICE DATED 26.3.2022 ISSUED BY THE 1ST RESPONDENT TOTHE PETITIONER. Exhibit P8TRUE COPY OF THE OBJECTIONS DATED 28.3.2022 SUBMITTED BY THE PETITIONER TO EXT.P7 SHOW CAUSE NOTICE. Exhibit P9TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.2022 ALONG WITH COMMUTATION STATEMENT ISSUED BY THE 1ST RESPONDENT TOTHE PETITIONER FOR THE ASSESSMENT YEAR 2015-16 Exhibit P10TRUE COPY OF THE NOTICE OF DEMAND ISSUED IN PURSUANCE TO EXT.P9, UNDER SECTION 156OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2015-16 DATED 29/03/22 //TRUE COPY// PA TO JUDGE