Wp(C)/19947/2022 Of Kailas Ayyappan v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 27 DAY OF JUNE 2022 / 6TH ASHADHA, 1944WP(C) NO. 19947 OF 2022 PETITIONER: KAILAS AYYAPPAN KAILAS, KANDIYOOR, MAVELIKARA, ALAPPUZHA, PIN – 690130. BY ADVS.R.JAIKRISHNANARAYANI HARIKRISHNANC.S.ARUN SHANKARANISH P. RESPONDENTS: 1INCOME TAX OFFICER WARD - 2, OFFICE OF THE INCOME TAX OFFICER,AAYAKAR BHAVAN, INCOME TAX OFFICE, BEACH ROAD P.O, ALAPPUZHA., PIN - 688001 2PRINCIPAL CHIEF COMMISSIONER OF INCOME TAXOFFICE OF PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, C.R. BUILDING, I.S. PRESS ROAD, ERNAKULAM NORTH P.O, KOCHI , PIN – 682018. OTHER PRESENT: ADV.JOSE JOSEPH,SC INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON27.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J U D G M E N T Petitioner has approached this Court challengingExt.P9 order through which it has been decided that re-assessment proceedings under Section 148 of the IncomeTax Act should be initiated against the petitioner and theconsequent notice under Section 148 (Ext.P10). 2.The learned counsel appearing of the petitionerpoints out that a reading of Ext.P9 order itself will show thatthe procedure contemplated by sub-Section (b) of Section148A has not been complied with, while issuing Ext.P9order. It is submitted that sub-Section (b) of Section 148 Aspecifically requires that an opportunity of hearing should begranted to the assessee before deciding to initiateproceedings under Section 148 of the Income Tax Act. It isalso submitted that only one among the replies submitted bythe petitioner have been considered and Ext.P7 reply dated12-05-2022, has not been considered while passing Ext.P9order. 3.The learned Standing Counsel appearing for thedepartment states that the petitioner is not at all prejudicedby Ext.P9 order. It is submitted that Ext.P9 is in the natureof preliminary order were the authority has taken a decisionthat proceedings under Section 148 of the Income Tax Actshould be initiated against the petitioner. It is submittedthat the petitioner will get a full opportunity before the re-assessment proceedings are completed to substantiate thatthere has been no escapement of income and therefore evenif Ext.P9 order suffers from any defect as pointed out by thelearned counsel for the petitioner the same need not be setaside in exercise of jurisdiction of this Court under article226 of the Constitution of India. 4.Having heard the learned counsel for thepetitioner and the learned Standing Counsel for thedepartment and taking note of the fact that Section 148 A(b)of the Income Act specifically requires that an opportunity ofhearing be given to the assessee before deciding to initiateproceedings under Section 148 of that Act, I am of theopinion that Ext.P9 order is liable to be set aside. It is also to be noted that Ext.P7 reply of the petitioner, which wassubmitted before Ext.P9 order was issued and also not beenconsidered by the authority. In the result this writ petitionis allowed and Ext.P9 order is quashed. ConsequentlyExt.P10 notice will also stand quashed. The matter isremanded to the 1[st] respondent to pass fresh orders afterconsidering the reply submitted by the petitioner and afteraffording an opportunity of hearing to the petitioner. Imake it clear that I have not expressed any opinion on themerits of the matter and is open to the 1[st] respondent to passsuch orders as it deem necessary after following theprocedure contemplated by sub-Section (b) of Section 148 A. Sd/-GOPINATH P. JUDGE ats APPENDIX OF WP(C) 19947/2022 PETITIONER EXHIBITS EXHIBIT P1TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT UNDER SECTION 148A(B) OF THE INCOME TAX ACT DATED 16.3.2022RESPONDENT UNDER SECTION 148A(B) OF THE INCOME TAX ACT DATED 16.3.2022 Sd/-GOPINATH P. JUDGE ats APPENDIX OF WP(C) 19947/2022 PETITIONER EXHIBITS EXHIBIT P1TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT UNDER SECTION 148A(B) OF THE INCOME TAX ACT DATED 16.3.2022RESPONDENT UNDER SECTION 148A(B) OF THE INCOME TAX ACT DATED 16.3.2022 EXHIBIT P2TRUE COPY OF THE ADJOURNMENT REQUEST FILED BY THE PETITIONER DATED 30.3.2022.BY THE PETITIONER DATED 30.3.2022. EXHIBIT P3TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED ONONLINE PORTAL DATED NIL.ONLINE PORTAL DATED NIL. EXHIBIT P4TRUE COPY OF REPLY TOGETHER WITH SIX ANNEXURES SUBMITTED BY THE PETITIONER TO THE1ST RESPONDENT DATED 9.4.2022.ANNEXURES SUBMITTED BY THE PETITIONER TO THE1ST RESPONDENT DATED 9.4.2022. EXHIBIT P5TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED ONONLINE PORTAL DATED NIL.ONLINE PORTAL DATED NIL. EXHIBIT P6TRUE COPY OF THE ORDER OF GRANTING TIME ISSUED BY THE 1ST RESPONDENT DATED 3.5.2022.ISSUED BY THE 1ST RESPONDENT DATED 3.5.2022. EXHIBIT P7TRUE COPY OF REPLY TOGETHER WITH THREE ANNEXURES SUBMITTED BY THE PETITIONER TO THE1ST RESPONDENT DATED 12.5.2022.ANNEXURES SUBMITTED BY THE PETITIONER TO THE1ST RESPONDENT DATED 12.5.2022. EXHIBIT P8TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED ONONLINE PORTAL DATED NIL.ONLINE PORTAL DATED NIL. EXHIBIT P9TRUE COPY OF THE ORDER ISSUED BY THE 1ST RESPONDENT DATED 30.5.2022.RESPONDENT DATED 30.5.2022. EXHIBIT P10TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 30.5.2022.RESPONDENT DATED 30.5.2022. EXHIBIT P11TRUE OF THE INTERIM ORDER ISSUED BY THIS HON'BLE COURT IN W.P(C) 15561/2022 DATED 10.5.2022.HON'BLE COURT IN W.P(C) 15561/2022 DATED 10.5.2022.