Wp(C)/23738/2021 Of Four Star Naturals Private Limited v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMANTUESDAY, THE 29 DAY OF MARCH 2022 / 8TH CHAITHRA, 1944WP(C) NO. 23738 OF 2021 PETITIONER: M/S.FOUR STAR NATURALS PRIVATE LIMITED, NO. 2, CHOICE GARDENS, CHEROOR, THRISSUR -680 008, REPRESENTED BY ITS MANAGING DIRECTOR ANIYAN MATHEW. BY ADVS. ANIL D. NAIRTELMA RAJUSANGEETH JOSEPH JACOBCHRISTINA ANNA PAULEDATHARA VINEETA KRISHNANARAVIND SREEKUMAR RESPONDENT: 1INCOME TAX OFFICER,WARD 1(1), THRISSUR, PIN 680 001. 2THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, THRISSUR, PIN 680 001.CENTRAL CIRCLE, THRISSUR, PIN 680 001. THE ASSISTANT COMMISSIONER OF INCOME TAX, P.K.RAVINDRANATHA MENON (SR.),SCJOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON29.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The petitioner-Company, which is engaged in the business ofproduction of spice extracts/essence/oil etc; is an assessee underthe Income Tax Act, 1961 (hereinafter referred to as 'Act', forshort). A survey u/s. 133A of the Act was conducted by theIncome Tax Department at the business premises of thepetitioner and certain materials suspecting suppression ofincome were impounded. The petitioner contends that, Ext. P3notice under section 148 dated 24.03.2020 issued by the 1[st]respondent, the Income Tax Officer, Ward I(1), Thrissur, was notreceived by the petitioner. The previous auditors of the petitionerreceived Ext. P4 notice u/s 142 (1) dated 21.09.2021 of the 2[nd]respondent, the Assistant Commissioner of Income Tax, CentralCircle, and forwarded the same to the petitioner. On receipt ofExts. P3 and P4 notices, the petitioner met and apprised the 2[nd]respondent that the notices were served on the previous auditorsand not at the e-mail id mentioned in the Income Tax web portal.However, the 2[nd] respondent issued Ext. P6 assessment order dated 30.09.2021 confirming the proposal and served the samephysically. 2.The petitioner contends that notices under sections 148, 142 (1) and 143 (3) r/w 147 were served on wrong e-mail id/e-mail id of the previous auditors of the petitioner and not in the e-mail id of the petitioner available in the Income Tax Portal. Thepetitioner has produced Ext.P1 Jurisdiction Details and Ext.P2Personal Details in the Income Tax Portal and Ext. P2 showsprimary and secondary e-mail ids of the petitioner wherecommunications are to be addressed. However, thecommunications were addressed to a different e-mail id, which isthe e-mail id of the erstwhile auditors. The petitioner contendsthat, the 2[nd] respondent did not note the changes in the personaldetails of the petitioner in the web portal, which was intimated tothe Department and issued notices in wrong e-mail id which is inviolation of principles of natural justice and seeks to quash Ext.P6. 3. An interlocutory application viz., I.A. No. 1 of 2021 has 3. An interlocutory application viz., I.A. No. 1 of 2021 has been filed on behalf of the respondents producing instructionsreceived on behalf of the 2[nd] respondent wherein it is stated thatnotices have been served in the address available in the portaland that they are system generated and the petitioner hasneither informed the assessing authority during the assessmentproceedings nor updated the profile regarding change in e-mailaddress. The petitioner has filed a reply affidavit to the statementfiled by the respondents stating that the notices were not servedon the primary e-mail id available in the portal. It is alsocontended that there is no service of notice as contemplatedunder Rule 127 of the Income Tax Rules, 1962 ('Rules', for short).4. A statement dated 06.12.2021 was also filed on behalf ofthe 2[nd] respondent producing the copy of the notices underSections 142 (1) and 143 (2). A reply affidavit is filed by thepetitioner to the said statement stating that those notices areserved manually and that the address in the portal iscontemplated for service of notice electronically and notmanually. 5. Heard Sri. Anil D. Nair, the learned counsel for the petitioner and Sri. Jose Joseph, the learned standing counsel forthe respondents. 6. Sri. Anil D. Nair refers to section 282 of the Act and Rule 127 of the Rules. Rule 127 enables service of notice, summons, requisition, order and other communication (referred to as'communication' in section 282) under the Act by electronicmeans (e-mail) and sub rule (2) (b) thereof provides that suchcommunication shall be delivered or transmitted at the: “(i) e-mail address available in the income-tax returnfurnished by the addressee to which the communicationrelates; or (ii) the e-mail address available in the last income-taxreturn furnished by the addressee; or (iii) in the case of addressee being a company, e-mail address of the company as available on the website ofMinistry of Corporate Affairs; or (iv) any e-mail address made available by the addresseeto the income-tax authority or any person authorised bysuch income-tax authority.” The learned counsel contends that the communications were not delivered or transmitted in terms of Rule 127. It is contendedthat, in Ext. P2, which is a copy of the personal details of thepetitioner available in the Income Tax Portal, the primary e-mailid of the petitioner is not the one to which Exts. P3, P4, and P7were sent and the service of communication is not as mandatedunder the Rules. Sri. Anil D. Nair also relies on the decision ofthis Court reported inBhima Jewels v. PrincipalCommissioner of Income Tax, Ekm, and another [2022 (1)KHC 217] to contend that in similar circumstances, this Court hasinterfered with the order of assessment. 7. Per contra, Sri. Jose Joseph would contend that the petitioner had not intimated the assessing officer with regard tochange in e-mail id. Sri. Jose Joseph also relies on the decision ofthe Hon'ble Supreme Court in Principal Commissioner of Income Tax v. I-ven Interactive Limited [(2019) 418 ITR 662(SC), wherein the Court has held that in the absence of anyintimation to the assessing officer with respect to change inaddress, the assessing officer was justified in issuing notice at the address available as per the PAN database. 7. Per contra, Sri. Jose Joseph would contend that the petitioner had not intimated the assessing officer with regard tochange in e-mail id. Sri. Jose Joseph also relies on the decision ofthe Hon'ble Supreme Court in Principal Commissioner of Income Tax v. I-ven Interactive Limited [(2019) 418 ITR 662(SC), wherein the Court has held that in the absence of anyintimation to the assessing officer with respect to change inaddress, the assessing officer was justified in issuing notice at the address available as per the PAN database. 8.According to the petitioner, Ext. P2 is the copy of thepersonal details of the petitioner available in the Income TaxPortal. It contains primary and secondary e-mail ids. However,the communications are delivered by the 2[nd] respondent atanother e-mail id, which is the e-mail id of the erstwhile auditors.Therefore, the petitioner was not in receipt of the notices andassessment order. Since the petitioner did not receive thenotices, the petitioner could not reply to the same. Since thenotices were issued in wrong e-mail id, the petitioner contendsthat there was no proper service of notice and therefore, Ext.P6assessment order is bad being passed in violation of theprinciples of natural justice. 9. Updated jurisdictional details as well personal details inthe Income Tax Web Portal are vital for the communication ofnotice, summons, requisition, order and other communication bythe Department, particularly in case of system generatedcommunications. While the respondents contend that the petitioner did not update the profile and thereby communicationswere sent through the e-mail id mentioned as default, Ext. P2personal details in the Income Tax Portal shows primary andsecondary e-mail ids and fact remains that the notices andassessment order were not served on these e-mail ids. It is notevident as to when the changes in the personal details weremade in the web portal. Since the petitioner did not receivenotices, the petitioner did not get opportunity to put forth itsresponse to the same. Thus, there is violation of principles ofnatural justice while issuing Ext.P6 assessment order. This Court,in Bhima Jewels (supra), in somewhat similar circumstances,observed as under: “18. Viewed in the entire conspectus of the circumstancesthat surround the order of assessment, this Court is of theopinion that, though the assessing officer cannot be faulted,petitioner did not get an effective opportunity to put forth hisresponse for the year 2017-18. Since the assessment order isthe platform from which the rights and obligations of not onlythe assessee but also of the department arise, it is essentialthat such a platform is built upon strong foundations,especially when the amount involved is large. The burden ofan assessment order issued without hearing the assessee willfall, not only upon the petitioner alone but even upon thesystem itself and may create further waste of resources.” Without venturing into the question as to who is to befaulted for the non-service of communications, in the facts andcircumstances, particularly, the fact that the petitioner did notget opportunity to put forth its responses to the notices leadingto the issuance of Ext.P6 assessment order, to meet the ends ofjustice, I set aside Ext.P6 order of assessment and direct thepetitioner to submit its response to Ext.P3 and subsequentnotices within two weeks from the date of receipt of a copy ofthis judgment and the assessing officer shall consider theresponse of the petitioner to the notices and pass freshassessment order within one month thereafter, after hearing thepetitioner. The writ petition is allowed as above. There will be no orderas to costs. Sd/- MURALI PURUSHOTHAMAN JUDGE APPENDIX OF WP(C) 23738/2021 PETITIONER’S EXHIBITS: Exhibit P1TRUE COPY OF JURISDICTION DETAILS AVAILABLEIN THE PORTAL.IN THE PORTAL. The writ petition is allowed as above. There will be no orderas to costs. Sd/- MURALI PURUSHOTHAMAN JUDGE APPENDIX OF WP(C) 23738/2021 PETITIONER’S EXHIBITS: Exhibit P1TRUE COPY OF JURISDICTION DETAILS AVAILABLEIN THE PORTAL.IN THE PORTAL. Exhibit P2TRUE COPY OF PERSONAL DETAILS AVAILABLE INTHE INCOME TAX PORTAL.THE INCOME TAX PORTAL. Exhibit P3TRUE COPY OF NOTICE DATED 24.03.2020 ISSUEDBY THE 1ST RESPONDENT.BY THE 1ST RESPONDENT. Exhibit P4TRUE COPY OF THE NOTICE U/S. 142 DATED21.09.2021 ISSUED BY THE OFFICE OF THE 2NDRESPONDENT.21.09.2021 ISSUED BY THE OFFICE OF THE 2NDRESPONDENT. Exhibit P5TRUECOPYOFTHEACKNOWLEDGMENTDEMONSTRATING THAT NOTICE DATED 21.09.2021WAS SERVED AT THE WRONG ADDRESS.DEMONSTRATING THAT NOTICE DATED 21.09.2021WAS SERVED AT THE WRONG ADDRESS. Exhibit P6TRUE COPY OF THE ORDER DATED 30.09.2021ISSUED BY THE 2ND RESPONDENT.ISSUED BY THE 2ND RESPONDENT. Exhibit P7TRUE COPY OF NOTICE DATED 28.09.2021 ISSUEDBY THE 2ND RESPONDENT.BY THE 2ND RESPONDENT. Exhibit P8TRUECOPYOFTHEACKNOWLEDGMENTDEMONSTRATING THAT NOTICE DATED 28.09.2021WAS SERVED AT THE WRONG ADDRESS.DEMONSTRATING THAT NOTICE DATED 28.09.2021WAS SERVED AT THE WRONG ADDRESS. RESPONDENTS’ EXHIBITS: R2(A)INSTRUCTION RECEIVED FROM THE OFFICE OF THEASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE, THRISSUR WITH REFERENCE TOTHE WRIT PETITION.ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE, THRISSUR WITH REFERENCE TOTHE WRIT PETITION. R2(B)COPY OF THE NOTICE U/S 142(1) DATED22.01.2021.22.01.2021. R2(C)COPY OF THE NOTICE U/S 143(2) DATED22.01.2021.22.01.2021. R2(D)COPY OF THE ORDER SHEET DULY SIGNED BY THEAUTHORIZEDREPRESENTATIVESHRI.C.A.VARGHESE, C.A ATTENDED FOR HEARINGON 8.2.2021 AND AGAIN ON 19.02.2021.AUTHORIZEDREPRESENTATIVESHRI.C.A.VARGHESE, C.A ATTENDED FOR HEARINGON 8.2.2021 AND AGAIN ON 19.02.2021. spc/