Wp(C)/15590/2023 Of St. Francis De Sales Educational Trust v. The Income Tax Officer (Exemption)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS THURSDAY, THE 8 DAY OF JUNE 2023 / 18TH JYAISHTA, 1945WP(C) NO. 15590 OF 2023 PETITIONER: ST. FRANCIS DE SALES EDUCATIONAL TRUSTXIX/559, SFS SEMINARY ETTUMANOOR P.O. KOTTAYAM DISTRICT REPRESENTED BY ITS MANAGING TRUSTEE FR.JOSE PARAPPILLIL, PIN – 686631 BY ADVS.ABRAHAM JOSEPH MARKOS V.ABRAHAM MARKOS ISAAC THOMAS ALEXANDER JOSEPH MARKOS P.G.CHANDAPILLAI ABRAHAM JOHN VITHAYATHIL AIBEL MATHEW SIBYJOSEPH MARKOSE (SR.) RESPONDENTS: 1THE INCOME TAX OFFICER (EXEMPTION) EXEMPTION WARD , INCOME TAX OFFICE, PUBLIC LIBRARY BUILDING SHASTRI ROAD, KOTTAYAM, PIN – 686001BUILDING SHASTRI ROAD, KOTTAYAM, PIN – 686001 2THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OFINCOME TAXINCOME TAX INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEWDELHI, PIN – 110001DELHI, PIN – 110001 3THE COMMISSIONER OF INCOME TAX (APPEALS)NATIONAL FACELESS APPEAL SCHEME, NEW DELHI, PIN – 110001NATIONAL FACELESS APPEAL SCHEME, NEW DELHI, PIN – 110001 4THE COMMISSIONER OF INCOME TAX (APPEALS)PUBLIC LIBRARY BUILDING SHASTRI ROAD, KOTTAYAM, PIN – 686001 PUBLIC LIBRARY BUILDING SHASTRI ROAD, KOTTAYAM, BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON08.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Dated this the 8[th] day of June,2023 J U D G M E N T The writ petition is filed challenging Ext P6assessment order passed by the first respondent. 2.The relevant facts for the determination ofthe writ petition are: the petitioner is a charitableinstitution. The petitioner’s assessment for the year2015-16 was re-opened on the ground that there was acash deposit in its bank accounts. The petitioner dulyfiled all responses to the various notices issued by thesecond respondent. Subsequently, Ext P1 show causenotice was issued to the petitioner on 17.03.2023,under Section 144B of the Income Tax Act, 1961,directing the petitioner to file its reply within threedays. In fact, the notice was not served on thepetitioner. When the petitioner saw Ext P1 on the webportal, they immediately filed Ext P2 request, on21.03.2023, seeking enlargement of time by a week, to enable the petitioner to file its reply with thesupporting documents. However, as the web portal ofthe respondents was closed, the petitioner wasprecluded from uploading its reply with the documents.Consequently, the petitioner filed Ext P4 grievancepetition on 24.03.2023, which was perfunctorilyrejected by the respondents vide Ext P6 response,stating that the assessment was completed on22.03.2023. Nonetheless, when the petitioner receivedExt P5 assessment order, it was revealed that Ext P6assessment order was passed only on 27.03.2023 andnot on 22.03.2023, that too with an usurious demandfor Rs.79,00,000/-. The petitioner has not beengranted a fair and reasonable opportunity to submit itsreply to Ext P1 show cause notice, which is in totaldisregard to the rudimentary principles of naturaljustice, fair play and reasonableness. The action of therespondents is arbitrary and unjustifiable. Hence, the -:4:- writ petition. 3. Heard; Sri. Joseph Markos, the learned Senior Counsel appearing for the petitioner and Sri.Christopher Abraham, the learned Standing Counselappearing for the respondents. 4. Ext P1 show cause notice was issued by therespondents on 17.03.2023, directing the petitioner tosubmit its reply within three days. The petitionerdiligently submitted Ext P2 application, seekingenlargement of time by one week, to enable them tosubmit the reply, which was turned down. Ext P4grievance petition submitted by the petitioner was alsorejected, by Ext P5 reply on the ground that Ext P6assessment order was passed on 22.03.2023.Indisputably, Ext P6 was passed only on 27.03.2023. -:4:- writ petition. 3. Heard; Sri. Joseph Markos, the learned Senior Counsel appearing for the petitioner and Sri.Christopher Abraham, the learned Standing Counselappearing for the respondents. 4. Ext P1 show cause notice was issued by therespondents on 17.03.2023, directing the petitioner tosubmit its reply within three days. The petitionerdiligently submitted Ext P2 application, seekingenlargement of time by one week, to enable them tosubmit the reply, which was turned down. Ext P4grievance petition submitted by the petitioner was alsorejected, by Ext P5 reply on the ground that Ext P6assessment order was passed on 22.03.2023.Indisputably, Ext P6 was passed only on 27.03.2023. 5.Having considered the pleadings andmaterials on record, and after hearing the learnedcounsel for the parties, I have no hesitation to hold that the petitioner was not granted a reasonable and fairopportunity for submitting their reply and being heard.The respondents have acted in undue haste and inviolation of the basis tenets of fair play, reasonablenessand natural justice, as expected of an instrumentality.The action of the respondents warrants interference bythis Court by exercising the plenary powers of thisCourt under Article 226 of the Constitution of India,notwithstanding the alternative statutory remedyavailable to the petitioner. Resultantly, I allow the writ petition as follows: (i)Ext P6 assessment order is set aside.(ii) Ext P1 show cause notice is re-opened, toenable the petitioner to submit its reply. (ii) Ext P1 show cause notice is re-opened, toenable the petitioner to submit its reply. (iii) The petitioner is granted 10 days’ time from thedate of receipt of a certified copy of thisjudgment, to submit its reply to Ext P1 showcause notice with all the supporting materials.date of receipt of a certified copy of thisjudgment, to submit its reply to Ext P1 showcause notice with all the supporting materials. W.P.(C)No.15590/2023 -:6:- (iv) The respondents are directed to open their webportal to facilitate the petitioner to submit itsreply along with the documents.portal to facilitate the petitioner to submit itsreply along with the documents. (v) The respondents shall consider and dispose ofExt P1 show cause notice, after adverting to thereply submitted by the petitioner, in accordancewith law and as expeditiously as possible, atany rate, within a period of three months fromthe date of receipt of a certified copy of thisjudgment, after affording the petitioner anopportunity of being heard.Ext P1 show cause notice, after adverting to thereply submitted by the petitioner, in accordancewith law and as expeditiously as possible, atany rate, within a period of three months fromthe date of receipt of a certified copy of thisjudgment, after affording the petitioner anopportunity of being heard. (vi) Until such time orders are passed as statedabove, all further coercive proceedings asagainst the petitioner shall stand deferred.above, all further coercive proceedings asagainst the petitioner shall stand deferred. DSd/- C.S.DIAS,JUDGE DST/08.06.23 //True copy// P.A.To Judge APPENDIX PETITIONER EXHIBITS EXHIBIT P1TRUE COPY OF THE SHOW CAUSE NOTICE ISSUEDON 17.03.2023ON 17.03.2023 EXHIBIT P2TRUE COPY OF THE PETITIONER'S APPLICATIONDATED 21.03.2023 FILED FOR ENLARGMENT OFTIME TOGETHER WITH ACKNOWLEDGMENTDATED 21.03.2023 FILED FOR ENLARGMENT OFTIME TOGETHER WITH ACKNOWLEDGMENT EXHIBIT P3TRUE COPY OF THE REPLY TO SHOW CAUSE NOTICEDATED 23.03.2023DATED 23.03.2023 EXHIBIT P4TRUE COPY 0F THE GRIEVANCE PETITION DATED24.03.2023 FILED BY THE PETITIONER.24.03.2023 FILED BY THE PETITIONER. EXHIBIT P5TRUE COPY OF THE RESPONSE DATED 24.03.2023FROM THE INCOME TAX DEPARTMENT.FROM THE INCOME TAX DEPARTMENT. EXHIBIT P6TRUE COPY OF THE ASSESSMENT ORDER DATED27.03.2023 TOGETHER WITH COMPUTATION SHEETAND NOTICE OF DEMAND.27.03.2023 TOGETHER WITH COMPUTATION SHEETAND NOTICE OF DEMAND. PETITIONER EXHIBITS EXHIBIT P1TRUE COPY OF THE SHOW CAUSE NOTICE ISSUEDON 17.03.2023ON 17.03.2023 EXHIBIT P2TRUE COPY OF THE PETITIONER'S APPLICATIONDATED 21.03.2023 FILED FOR ENLARGMENT OFTIME TOGETHER WITH ACKNOWLEDGMENTDATED 21.03.2023 FILED FOR ENLARGMENT OFTIME TOGETHER WITH ACKNOWLEDGMENT EXHIBIT P3TRUE COPY OF THE REPLY TO SHOW CAUSE NOTICEDATED 23.03.2023DATED 23.03.2023 EXHIBIT P4TRUE COPY 0F THE GRIEVANCE PETITION DATED24.03.2023 FILED BY THE PETITIONER.24.03.2023 FILED BY THE PETITIONER. EXHIBIT P5TRUE COPY OF THE RESPONSE DATED 24.03.2023FROM THE INCOME TAX DEPARTMENT.FROM THE INCOME TAX DEPARTMENT. EXHIBIT P6TRUE COPY OF THE ASSESSMENT ORDER DATED27.03.2023 TOGETHER WITH COMPUTATION SHEETAND NOTICE OF DEMAND.27.03.2023 TOGETHER WITH COMPUTATION SHEETAND NOTICE OF DEMAND. EXHIBIT P7TRUE COPY 0F THE ACKNOWLEDGMENT FOR FILINGTHE APPEAL TOGETHER WITH THE APPEAL DATED20.04.2023 FILED BY THE PETITIONER BEFORETHE COMMISSIONER OF INCOME TAX (APPEALS).THE APPEAL TOGETHER WITH THE APPEAL DATED20.04.2023 FILED BY THE PETITIONER BEFORETHE COMMISSIONER OF INCOME TAX (APPEALS). EXHIBIT P8TRUE COPY OF THE STAY PETITION DATED `NIL'FILED BY THE PETITIONER BEFORE THECOMMISSIONER OF INCOME TAN (APPEALSFILED BY THE PETITIONER BEFORE THECOMMISSIONER OF INCOME TAN (APPEALS EXHIBIT P9TRUE COPY OF THE JUDGMENT DATED 15.03.20220F THIS HONOURABLE COURT IN W.P.(C)NO.11540 0F 2021.0F THIS HONOURABLE COURT IN W.P.(C)NO.11540 0F 2021. EXHIBIT P10TRUE COPY OF THE JUDGMENT DATED 19.01.20230F THIS HONOURABLE COURT IN W.P.(C)NO.23767 0F 20220F THIS HONOURABLE COURT IN W.P.(C)NO.23767 0F 2022 RESPONDENT’S EXHIBITS: NIL