Wp(C)/1660/2023 Of Radhakrishnan K v. Assessment Unit, Income Tax Department

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS TUESDAY, THE 23 DAY OF MAY 2023 / 2ND JYAISHTA, 1945WP(C) NO. 1660 OF 2023 PETITIONER: RADHAKRISHNAN K.,PROPRIETOR, R.K. TRADERS, KOTTAPPURAM, SREE KRISHNA PURAM, PALAKKAD DISTRICT, PIN - 679513 BY ADV ANIL D. NAIR RESPONDENT: ASSESSMENT UNIT, INCOME TAX DEPARTMENT,NATIONAL FACELESS ASSESSMENT CENTRE (NFAC), NEW DELHI, PIN – 110001 SRI. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON23.05.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Dated this the 23[rd] day of May, 2023JUDGMENT The writ petition is filed to set aside Exts.P9 assessment order, P9 (a) computation sheet and P9 (b)notice for penalty issued by the respondent. 2. The relevant facts leading to the above orders, in brief, are: the petitioner is a trader in Rubber. Thepetitioner filed his return of income for the assessmentyear 2021-2022, which was subject to scrutiny. Thepetitioner was served with Ext.P1 notice under Section143(2) of the Income Tax Act,1961 (in short ‘Act’). Thepetitioner submitted Ext.P2 reply stating that he wasready to furnish all the supporting materials. Thepetitioner was thereafter served with Ext.P3 notice, towhich the petitioner again submitted Ext.P4 reply. Then,the petitioner was served with Ext.P5 show cause notice WP(C) NO. 1660 OF 2023 3 dated 15.12.2022, calling upon him to show cause whyassessment shall not be finalised taking into account thevariation. The petitioner was directed to submit hisresponse through registered e-filing account of therespondent on or before 18:25 hours of 20.12.2022.Immediately, the petitioner submitted Ext.P6 request on20.12.2022 stating that his accountant was sick and heneeded time till 26.12.2022. The respondent by Ext.P7reply dated 20.12.2022, granted enlargement of time bypermitting the petitioner to submit his response on orbefore 24.12.2022. But, the respondent’s portal wasclosed, which precluded the petitioner from submittinghis response and supporting materials. To the uttersurprise of the petitioner, the respondent proceeded withthe assessment and has passed Exts.P9 to P9(b). Exts.P9to P9(b) are arbitrary, unjustifiable and unsustainable inlaw. Hence, the writ petition. 3. The respondent has through its Standing Counsel WP(C) NO. 1660 OF 2023 4 filed a statement, inter alia, contending that since thepetitioner did not discharge his fundamentalresponsibility of proving that the purchases weregenuine, the show cause notice dated 15.12.2022 wasissued asking him to file his objections on or before20.12.2022. As the petitioner attempted for the videoconference facility only on 23.12.2022, and the timeperiod was over. It cannot be said that there is violationof principles of natural justice. The petitioner had waivedhis right of having a hearing by video conference. Thesystem of Faceless Assessment can work in a robustmanner, only if the assessee co-operates and dischargeshis responsibilities within the time period fixed by therespondent. The petitioner has an alternative statutoryremedy by filing an appeal. The writ petition is devoid ofany merits and is liable to be dismissed. 4. The petitioner has filed a reply affidavitreiterating his contentions in the writ petition and WP(C) NO. 1660 OF 2023 5 4. The petitioner has filed a reply affidavitreiterating his contentions in the writ petition and WP(C) NO. 1660 OF 2023 5 denying the assertions in the counter affidavit. Thepetitioner has contended that, as there are severalnumbers of purchase bills, it was impossible to upload thedocuments in the portal, within the prescribed timeperiod. It was in the above circumstances, the petitionersought for enlargement of time, which was allowed till24.12.2022. However, the portal was closed. Thus, thepetitioner was prevented from submitting his reply anduploading the documents to substantiate his defence.The stand of the respondent is unreasonable andunjustifiable. Therefore, the writ petition may be allowed.5. Heard; Sri.Anil D. Nair, the learned counselappearing for the petitioner and Sri.Jose Joseph, thelearned Standing Counsel appearing for the respondent.6. It may be true that the petitioner was initiallyserved with a notice under Section 143(2) of the Act on26.6.2022. In response to the said notice, the petitionerhad submitted Ext.P2 reply. Again, Ext.P3 notice was WP(C) NO. 1660 OF 2023 6 served on the petitioner on 6.10.2022, which was againreplied to by Ext.P4. Finally, the respondent issuedExt.P5 show cause notice dated 15.12.2022, directing thepetitioner to submit his reply on or before 20.12.2022.Immediately, the petitioner submitted Ext.P6 replyseeking enlargement of time upto 26.12.2022, on theground that his accountant was sick. In response toExt.P6 request, the respondent granted time to thepetitioner till 24.12.2022 to submit his reply. 7. Having granted the petitioner time till 24.12.2022,it is unreasonable and too hyper-technical on the part ofthe respondent to now contend that, since the petitionerhad not availed the opportunity to upload the documentsat the first instance, he cannot be permitted to have ahearing through the video conferencing facility and toupload the documents. If that be the case, then there isno meaning in the respondent granting the petitioner theenlargement of time and the petitioner filing his WP(C) NO. 1660 OF 2023 7 response. The action of an instrumentality has to be notonly fair but also reasonable. Faceless Assessment maybe an efficient, novel and transparent scheme developedby the respondent, but cannot be a tool to defeat theindefeasible and substantial right of a party, that too, toestablish his defence. 8. In the above conspectus, I hold that the action ofthe respondent in foreclosing the right of the petitioner insubmitting his reply, with the supporting documents andhaving a video conference hearing is unjustifiable andagainst the principles of reasonableness. Notwithstandingthe contention of the alternative remedy raised by therespondent, as there is clear infraction of the principles ofnatural justice, I am inclined to allow the writ petition bysetting aside Exts.P9 to P9(b) orders and permit thepetitioner to submit his reply with the supportingdocuments to Ext.P5 and earlier show cause notice. Resultantly, I allow the writ petition as follows:- WP(C) NO. 1660 OF 2023 8 (i) Exts.P9 to P9(b) orders are set aside. (ii) The respondent is directed to open its portal and permit the petitioner to submit his reply along withsupporting documents and afford him an opportunity ofbeing heard through the video conferencing facility. (iii) All coercive proceedings shall be kept inabeyance, pursuant to the impugned orders, until thefinalisation of the above proceedings. Sd/- C.S.DIAS, JUDGE WP(C) NO. 1660 OF 2023 9 APPENDIX OF WP(C) 1660/2023 PETITIONER EXHIBITS Exhibit P1TRUE COPY OF THE NOTICE UNDER SECTION 143(2), DATED 28.06.2022 ISSUED BY THE RESPONDENT.143(2), DATED 28.06.2022 ISSUED BY THE RESPONDENT. Resultantly, I allow the writ petition as follows:- WP(C) NO. 1660 OF 2023 8 (i) Exts.P9 to P9(b) orders are set aside. (ii) The respondent is directed to open its portal and permit the petitioner to submit his reply along withsupporting documents and afford him an opportunity ofbeing heard through the video conferencing facility. (iii) All coercive proceedings shall be kept inabeyance, pursuant to the impugned orders, until thefinalisation of the above proceedings. Sd/- C.S.DIAS, JUDGE WP(C) NO. 1660 OF 2023 9 APPENDIX OF WP(C) 1660/2023 PETITIONER EXHIBITS Exhibit P1TRUE COPY OF THE NOTICE UNDER SECTION 143(2), DATED 28.06.2022 ISSUED BY THE RESPONDENT.143(2), DATED 28.06.2022 ISSUED BY THE RESPONDENT. Exhibit P2TRUE COPY OF THE ACKNOWLEDGMENT DATED 13.07.2022 OF THE REPLY FILED BY THE PETITIONER13.07.2022 OF THE REPLY FILED BY THE PETITIONER Exhibit P3TRUE COPY OF THE NOTICE DATED 06.10.2022 UNDER SECTION 142(1) ALONG WITH ANNEXURE ISSUED BY THE RESPONDENT.UNDER SECTION 142(1) ALONG WITH ANNEXURE ISSUED BY THE RESPONDENT. Exhibit P4TRUE COPY OF THE RESPONSE TO EXT.P3 AND THE ACKNOWLEDGMENTTHE ACKNOWLEDGMENT Exhibit P5TRUE COPY OF THE SHOW CAUSE NOTICE DATED 15.12.2022 ISSUED BY THE RESPONDENT15.12.2022 ISSUED BY THE RESPONDENT Exhibit P6TRUE COPY OF THE REQUEST FOR ADJOURNMENT ALONG WITH THE ACKNOWLEDGMENT.ALONG WITH THE ACKNOWLEDGMENT. Exhibit P7TRUE COPY OF THE SCREENSHOT SEEKING PERMISSION FOR VIDEO CONFERENCING AND THEREMARKPERMISSION FOR VIDEO CONFERENCING AND THEREMARK Exhibit P8TRUE COPY OF THE SCREENSHOT OF THE ATTEMPT TO FILE REPLY TO SHOW CAUSE NOTICEATTEMPT TO FILE REPLY TO SHOW CAUSE NOTICE Exhibit P9TRUE COPY OF THE ASSESSMENT ORDER DATED 26.12.2022 PASSED BY THE RESPONDENT26.12.2022 PASSED BY THE RESPONDENT Exhibit P9(a)TRUE COPY OF THE COMPUTATION SHEET PREPARED BY THE RESPONDENT ALONG WITH THE NOTICE OF DEMAND.BY THE RESPONDENT ALONG WITH THE NOTICE OF DEMAND. Exhibit P9(b)TRUE COPY OF THE NOTICE OF PENALTY DATED 26.12.2022 ISSUED BY THE RESPONDENT26.12.2022 ISSUED BY THE RESPONDENT