Wp(C)/20314/2020 Of Iy Tee Cee Trading Company v. The Asst. Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE 08TH DAY OF OCTOBER 2020 / 16TH ASWINA, 1942 WP(C).No.20314 OF 2020(L) PETITIONER/S: IY TEE CEE TRADING COMPANYPP V736E, 1PULPALLY, WYNAD, KERALA, PIN-673579. (REPRESENTED BY ITS MANAGING PARTNER MR.ABDUL NAZER VANIYADUTH). BY ADVS.SRI.M.P.SHAMEEM AHAMEDSRI.CYRIAC TOM RESPONDENT/S: THE ASST. COMMISSIONER OF INCOME TAXCIRCLE 2(1), AYAKAR BHAVAN, KOZHIKKODE-673001. OTHER PRESENT: SRI. CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON08.10.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The petitioner, which is stated to be a partnership firm, had applied for, andwas issued a PAN, which reflected its status as a company. The petitioner being afirm could not have been issued with the PAN showing its status as a company. Butthe petitioner firm did not notice this discrepancy till much later, in the year 2005.Immediately thereafter, it applied for and was issued a fresh PAN showing itsstatus as a firm. 2.During the financial year 2016-17 and during the demonetizationperiod, the petitioner firm had made certain deposits in its bank account, a portionof which comprised demonetized notes. Owing to the incorrect PAN that wasavailable in the bank account, the cash deposit made in the account of thepetitioner firm was reported by the bank to the Income Tax Department under thewrong PAN that showed the petitioner as a company. It is apparently based on this,that the respondent initiated the assessment proceedings under Section 142(1)against the petitioner, by asking it to file returns in response to the said notice.Although the said returns were filed under the current PAN applicable to the firm,the respondent appears to have issued a fresh notice to the petitioner reiteratingits earlier demand. It is the case of the petitioner that while it had explained thediscrepancy in the PAN, and had reiterated the said submission in the reply to thepre-assessment notice, the respondent proceeded to finalise the assessmentignoring the objections and explanations given by the petitioner. In the writpetition, the petitioner while impugning Ext.P6 assessment order, also points outthe difficulty faced by the petitioner in attempting to file an appeal against Ext.P6assessment order, inasmuch as the appeal can now be filed only online, and theweb portal of the Income Tax Department refuses to accept an appeal which isfiled in the PAN of the petitioner which shows its status as a firm, whereas the PAN recorded in the system of the Department, based on the orders of the assessingauthority, shows the petitioner as a company. 2. I have heard the learned counsel for the petitioner and the learnedStanding Counsel for the respondent. recorded in the system of the Department, based on the orders of the assessingauthority, shows the petitioner as a company. 2. I have heard the learned counsel for the petitioner and the learnedStanding Counsel for the respondent. 3. On a consideration of the facts and circumstances of the case and thesubmissions made across the Bar and, in particular, on a perusal of Ext.P6assessment order that is impugned in this writ petition, I find that this is a casewhere the basic issue that comes up for consideration is as to whether thepetitioner firm had correctly accounted for the deposits made in its account. Theassessing officer in Ext.P6 order states that the claims made by the petitionercould not be accepted in view of the same not being substantiated with properevidence and due to paucity of time. While it may be a fact that the assessingauthority was limited by time constraints, in view of the statutory provisionsmandating the completion of assessments within a particular time, the samecannot be cited as a reason for abdicating his role as an adjudicating authority intax assessment. In other words, the assessee cannot be prejudiced on account ofthe delay occasioned by the department in passing assessment orders, and thehasty manner in which an assessment order is passed without considering thematerial produced by an assessee, cannot be justified on the ground that the timelimit for finalising assessment was nearing expiry. Inasmuch as I do not find aproper consideration of the materials produced by the petitioner assessee inExt.P6 order, I quash Ext.P6 order and direct the respondent to redo theassessment in relation to the petitioner by considering the materials produced bythe petitioner to justify his contentions on merit, and referring to the said materialwhile passing final orders of assessment for the assessment year in question. Therespondent shall finalise the assessment of the petitioner for the assessment year in question within four months from the date of receipt of a copy of this judgment,after hearing the petitioner and considering the materials produced by thepetitioner as aforementioned. The writ petition is disposed accordingly. Sd/-A.K.JAYASANKARAN NAMBIARJUDGE APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1COPY OF THE NOTICE DATED 23.12.2017 ISSUED BY THE 1ST RESPONDENT U/S 142(1).