Wp(C)/39692/2022 Of P.a. Logistics * (Corrected) v. The Additional/Joint/Deputy/Assistant Commissioner Of Income Tax/ Income-Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. WEDNESDAY, THE 14 DAY OF DECEMBER 2022 / 23RD AGRAHAYANA, 1944WP(C) NO. 39692 OF 2022 PETITIONER: P.A. LOGISTICS DOOR NO. VIII/368KATTAKATH PUTHENPURAKKAL P.O.,SANTHIPURAM, KODUNGALLURTHRISSUR DIST., PIN - 680 668 REPRESENTED BY ITS MANAGING PARTNER NILAS P.A., PIN – 680668 * NILA P.A.,EX-MANAGING PARTNER,P.A.LOGISTICS (DISSOLVED), DOOR NO.VIII/368,KATTAKATH PUTHENPURAKKAL P.O., SANTHIPURAM,KODUNGALLUR, THRISSUR DISTRICT, PIN-680 668.THE NAME AND ADDRESS OF THE PETITIONER IS CORRECTED AS PER ORDER DATED 14-12-2022 IN I.A.NO.1 OF 2022 IN W.P.(C)NO.39692 OF 2022. BY ADVS. MOHAN PULIKKAL NARAYANAN P POTTY MANJU RAJAN A.AMRUTHA VIDYADHARAN RESPONDENTS: 1THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE MAYUR BHAWAN, CONNAUGHT LANE, BARAKHAMBANEW DELHI - 110 001. 2THE COMMISSIONER OF INCOME TAX (APPEALS)NATIONAL FACELESS APPEAL CENTRENEW DELHI - 110 002. 3THE INCOME TAX OFFICERWARD 2(1), THRISSUR INCOME TAX OFFICE, AAYAKAR BHAVAN, SHAKTHANTHAMPURAN NAGAR, THRISSUR - 680 001. 4THE PRINCIPAL COMMISSIONER OF INCOME TAXINCOME TAX OFFICE, AAYAKAR BHAVANSHAKTHANTHAMPURAN NAGAR,THRISSUR - 680 001.INCOME TAX OFFICE, AAYAKAR BHAVANSHAKTHANTHAMPURAN NAGAR,THRISSUR - 680 001. BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALAKERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON14.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Petitioner has approached this Court challenging Ext.P3order of assessment issued by the National Faceless AssessmentCenter. The primary contention of the petitioner is that Ext.P3order has been issued without following the procedurecontemplated by law and in violation of principles of naturaljustice. 2.The petitioner is an assessee under the Income Tax Act,1961. For the assessment year 2017-2018, a notice was issued tothe petitioner under Section 148 of the Income Tax Act, followedby notices under Section 142(1) of the Income Tax Act. It appearsthat these initial notices were issued by the JurisdictionalAssessing Officer and some of these notices were responded to bythe petitioner. Following amendments to the Income Tax Act,1961, with effect from 01-04-2021, the assessment was shiftedfrom the Jurisdictional Assessing Officer to the National FacelessAssessment Center. The National Faceless Assessment Center hadissued pre-assessment notices to the petitioner which, accordingto the petitioner, never came to the notice of the petitioner. TheNational Faceless Assessment Center therefore completed the assessment on best judgment basis and concluding that thepetitioner had not responded to the pre-assessment notices issuedby the National Faceless Assessment Center. assessment on best judgment basis and concluding that thepetitioner had not responded to the pre-assessment notices issuedby the National Faceless Assessment Center. 3.Adv. Mohan Pulikkal, the learned counsel appearing forthe petitioner, would submit that the petitioner’s firm had beendissolved with effect from 31-03-2021, as is evident from Ext.P2.It is submitted that the petitioner’s firm had availed a loan ofRs.83,00,000/- (Rupees Eighty Three Lakh only) from HindujaLeyland Finance Ltd., for purchase of five commercial vehicles. Itis submitted that the re-assesssment proceedings in respect of theassessment year 2017-2018, have been taken on the premise thatthere is no proper explanation for the source of funds to purchasethese commercial vehicles. It is submitted that the notices issuedby the National Faceless Assessment Center, was to the E-mailaddress of the dissolved firm and therefore the petitioner was notin a position to respond to those notices. It is submitted that sincethe petitioner has a substantial case to be argued on merits,Ext.P3 assessment order may be set aside and the matter may beremanded for fresh consideration of the National FacelessAssessment Center. It is submitted that since Ext.P3 is issued inviolation of principles of natural justice, the availability of anyalternative remedy need not deter this Court from exercising jurisdiction under Article 226 of the Constitution of India. 4.Adv. Jose Joseph, the learned Standing Counselappearing for the respondent department, would vehementlyoppose the grant of any relief to the petitioner. Firstly, it issubmitted that there is no question of violation of principles ofnatural justice, in the facts and circumstances of this case. It issubmitted that notices were initially issued to the petitioner by theJurisdictional Assessing Officer and some of these notices hadbeen responded to by the petitioner. It is submitted thatsubsequently, after the file was transferred to the NationalFaceless Assessment Center, the National Faceless AssessmentCenter had issued notices to the E-mail address of the dissolvedfirm available on the portal. It is submitted that if there was anychange in the E-mail address and if the petitioner required noticesto be issued to any other E-mail address, it was the duty of thepetitioner to have updated the E-mail address on the portal . It issubmitted that the contentions of the petitioner can very well betaken up in an appeal against Ext.P3 order of assessment and thisCourt should not exercise its jurisdiction under Article 226 of theConstitution of India, to interfere with Ext.P3 order. 5.The learned counsel appearing for the petitioner, inreply, submits that though an appeal has been filed against Ext.P3 order, the petitioner is entitled to get relief from this Court in thefacts and circumstances of the case. 6.Having heard the learned counsel appearing for thepetitioner and the learned Standing Counsel appearing for therespondent department, I am of the view that the petitioner isentitled to succeed. The circumstances which compel me to takesuch a view are the following: 5.The learned counsel appearing for the petitioner, inreply, submits that though an appeal has been filed against Ext.P3 order, the petitioner is entitled to get relief from this Court in thefacts and circumstances of the case. 6.Having heard the learned counsel appearing for thepetitioner and the learned Standing Counsel appearing for therespondent department, I am of the view that the petitioner isentitled to succeed. The circumstances which compel me to takesuch a view are the following: i.The initial notices issued to the petitioner where by theJurisdictional Assessing Officer. It is not disputed that someamong these notices have been responded to by the petitioner.Thereafter, following amendment carried out to the IncomeTax Act, 1961 [with effect from 01-04-2022], the assessmentwas shifted from the Jurisdictional Assessing Officer to theNational Faceless Assessment Centre. The petitioner is notlegally entitled to any notice before the proceedings weretransferred to the National Faceless Assessment Centre. TheNational Faceless Assessment Centre has thereafter issuednotices to the petitioner in the E-mail address of the dissolvedfirm. The National Faceless Assessment Centre was clearlyaware that the firm had been dissolved and the business hadbeen discontinued on the basis of the replies filed earlier bythe petitioner before the Jurisdictional Assessing Officer. A reading of Ext.P3 assessment order suggests that thisinformation was available with the National FacelessAssessment Centre, when it proceeded to complete theassessment on the basis of best judgment and on the basisthat the petitioner had not responded to the pre-assessmentnotices. ii.In Calcutta Discount Co. Ltd. v. Income Tax Officer,Companies District I, Calcutta and Anr; AIR 1961 SC372, a Constitution Bench of the Supreme Court held asfollows:Companies District I, Calcutta and Anr; AIR 1961 SC372, a Constitution Bench of the Supreme Court held asfollows: “28.In the present case the company contends thatthe conditions precedent for the assumption ofjurisdiction under S.34 were not satisfied and cameto the court at the earliest opportunity. There isnothing in its conduct which would justify the refusalof proper relief under Art.226.When theConstitution confers on the High Courts the powerto give relief it becomes the duty of the courts togive such relief in fit cases and the courts would befailing to perform their duty if relief is refusedwithout adequate reasons. In the present case wecan find no reason for which relief should berefused”. The petitioner is therefore entitled to approach this Courtunder Article 226 of the Constitution of India, notwithstanding the fact that the petitioner has alreadyinvoked the Appellate remedy by filing Ext.P6 appeal. 7.Therefore this writ petition is allowed. Ext.P3 isquashed. The matter is remanded to the National FacelessAssessment Centre for completing fresh assessment in accordancewith law. The petitioner shall, within a period of two weeks fromtoday, update the E-mail address of the petitioner in the portal ofthe Income Tax Department. The petitioner will also intimate theJurisdictional Income Tax Officer, the E-mail address to which thenotices to the petitioner have to be sent. Sd/- GOPINATH P.JUDGE APPENDIX OF WP(C) 39692/2022 PETITIONER EXHIBITS Exhibit-P1A TRUE COPY OF THE CERTIFICATE ISSUED IN THIS REGARD BY HINDUJA LEYLAND FINANCE LTD.THIS REGARD BY HINDUJA LEYLAND FINANCE LTD. Exhibit-P2A TRUE COPY OF THE DEED OF DISSOLUTION OF THE PETITIONER FIRM WITH EFFECT FROM 31.03.2021 THE PETITIONER FIRM WITH EFFECT FROM 31.03.2021 Exhibit-P3A TRUE COPY OF THE ASSESSMENT ORDER DATED 07.03.2022 PASSED BY THE 1ST RESPONDENT07.03.2022 PASSED BY THE 1ST RESPONDENT Exhibit-P4(a)TRUE COPY OF THE PENALTY NOTICES DATED 04.08.202204.08.2022 Exhibit-P4(b)TRUE COPY OF THE PENALTY NOTICE DATED 05.08.202205.08.2022 Sd/- GOPINATH P.JUDGE APPENDIX OF WP(C) 39692/2022 PETITIONER EXHIBITS Exhibit-P1A TRUE COPY OF THE CERTIFICATE ISSUED IN THIS REGARD BY HINDUJA LEYLAND FINANCE LTD.THIS REGARD BY HINDUJA LEYLAND FINANCE LTD. Exhibit-P2A TRUE COPY OF THE DEED OF DISSOLUTION OF THE PETITIONER FIRM WITH EFFECT FROM 31.03.2021 THE PETITIONER FIRM WITH EFFECT FROM 31.03.2021 Exhibit-P3A TRUE COPY OF THE ASSESSMENT ORDER DATED 07.03.2022 PASSED BY THE 1ST RESPONDENT07.03.2022 PASSED BY THE 1ST RESPONDENT Exhibit-P4(a)TRUE COPY OF THE PENALTY NOTICES DATED 04.08.202204.08.2022 Exhibit-P4(b)TRUE COPY OF THE PENALTY NOTICE DATED 05.08.202205.08.2022 Exhibit-P4(c)TRUE COPY OF THE PENALTY NOTICE DATED 06.08.202206.08.2022 Exhibit-P5A TRUE COPY OF THE ORDER DATED 30.08.2022 OFTHE 3RD RESPONDENTTHE 3RD RESPONDENT Exhibit-P6A TRUE COPY OF THE APPEAL FILED BY THE PETITIONER IN FORM NO.35 BEFORE THE CIT (APPEALS)PETITIONER IN FORM NO.35 BEFORE THE CIT (APPEALS) Exhibit-P7A TRUE COPY OF THE NOTICE OF DEMAND DATED 18.10.2022 ISSUED BY THE 3RD RESPONDENT 18.10.2022 ISSUED BY THE 3RD RESPONDENT Exhibit-P8A TRUE COPY OF THE APPLICATION FOR STAY OF DEMAND OF TAXES SUBMITTED BY THE PETITIONER TO THE 3RD RESPONDENT ON 26.10.2022DEMAND OF TAXES SUBMITTED BY THE PETITIONER TO THE 3RD RESPONDENT ON 26.10.2022 Exhibit-P9A TRUE COPY OF THE SAID ORDER DATED 03.11.2022 ISSUED BY THE 3RD RESPONDENT 03.11.2022 ISSUED BY THE 3RD RESPONDENT Exhibit-P10 Exhibit-P11 A TRUE COPY OF THE SAID LETTER DATED 09.11.2022 SUBMITTED BY THE PETITIONER A TRUE COPY OF THE SAID ORDER DATED 22.11.2022 OF THE 3RD RESPONDENT