Wp(Md)/1972/2020 Of Jaffaorulla Syeaadunnishaa v. The Assistant Commissioner Of Income Tax

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT CORAM : THE HONOURABLE MRS.JUSTICE J.NISHA BANU Jaffaorulla Syeaadunnishaa ... Petitioner The Assistant Commissioner of Income Tax,Income Tax Circle 2(1) Trichy,3[rd] Floor, Trichy Main Building,Williams Road, Cantonment, Tiruchirappalli-620 001. Petition filed under Article 226 of the Constitution of India,for issuance of Writ of Certiorari, to call for the records of therespondent in PAN vide Order No.ITBA/AST/S/144/2019-20/1022967569(1) dated 24.12.2019 and raised a demand under Section156 of the Income Tax Act in No.ITBA/AST/S/156/2019-20/1022967579(1)dated 24.12.2019 and quash the same as ex-facie illegal, arbitrary,without jurisdiction and against the principles of natural justice. ORDER This writ petition has been filed for issuance of a Writ ofCertiorari, to call for the records of the respondent in PANBCCPS3685N vide Order No.ITBA/AST/S/144/2019-20/1022967569(1) dated24.12.2019 and raised a demand under Section 156 of the Income TaxAct in No.ITBA/AST/S/156/2019-20/1022967579(1) dated 24.12.2019 andquash the same as ex-facie illegal, arbitrary, without jurisdictionand against the principles of natural justice. 2.The petitioner is an authorised dealer for Royal EnfieldMotorcycles and for the assessment year 2017-18, the petitionerfiled return and the assessment has been completed. Subsequently, anotice was issued by the Income Tax Officer, Cuddalore, on10.08.2018 under Section 143(2) of the Act and thereafter a noticeunder Section 142(1) of the Act was issued on 21.10.2019 by therespondent. The petitioner filed reply in part on 05.11.2019 andsought time for filing further details. Again on 27.11.2019,https://hcservices.ecourts.gov.in/hcservices/ further details were filed. Again on 30.11.2019, entire detailswere filed. The respondent issued a show cause notice on 05.12.2019seeking for the first time fresh details including the details forthe assessment year 2016-2017 even though the assessment year is2017-18 and observed that the petitioner filed reply on 05.11.2019only and granted time upto 08.12.2019. According to the petitioner,even though the Directorate of Income Tax(Systems) has directed theAssessing Officers to grant time upto 29.12.2019 to the assessee forsubmission of response in the barred scrutiny cases, the respondentarbitrarily made the assessment on 24.12.2019 under Section 144 ofthe Act and therefore, the petitioner has filed the present writpetition stating that the impugned order has been passed against theprinciples of natural justice and also against the circular issuedby the Directorate of Income Tax on 26.12.2019 in which it wasinformed that the facility for electronic submission of documentsshall be automatically closed on 29.12.2019. 3.The learned counsel for the petitioner would state that therespondent has no jurisdiction to assess under e-proceedings whenadmittedly Section 143(3A) of the Income Tax Act was amended witheffect from 01.04.2020 giving the right to make e-assessmentproceedings under Section 144 and therefore, the e-assessment orderpassed by the respondent is bad in law. The learned counsel for thepetitioner would further state that the respondent has assessed theincome under the amended Section 115BBE of the Act when admittedlythe amendment came into effect on 01.04.2017 i.e., from the previousyear 2017-2018 i.e., from the assessment year 2018-2019 and not forthe assessment year 2017-2018. According to the petitioner, becauseof the wrong application of the amended provision, huge liabilitywas raised by the respondent and the petitioner is put to greathardship and mental agony and therefore, the petitioner is beforethis Court. 4.He would further state that even on similar occasion inW.P.No.1178 and 1182 of 2020 dated 27.01.2020, the assessmentorders made without granting further time as requested by theassessee, were set aside and the matter was remitted to therespondent for making de nova assessment. Subsequently, therespondent in his proceedings dated 26.03.2021, has passed an orderaccepting the claim of the assessee and therefore, the learnedcounsel for the petitioner would state that the assessment orderspassed by the respondent herein without giving opportunity to thepetitioner herein in spite of his request for adjournment, is aclear violation of the principles of natural justice and therefore,the impugned orders are liable to be set aside on the said ground. 5.The learned Senior Standing Counsel for the respondent wouldstate that when there is an effective statutory appeal available tothe petitioner, he cannot bypass the same. He would further statethat the petitioner's case was selected for scrutiny throughhttps://hcservices.ecourts.gov.in/hcservices/Computer Aided Scrutiny Selection(CASS) in Income Tax Business Application Module and a notice under Section 143(2) of the Act wasissued on 10.08.2018 by the Income Tax Officer Ward-2, Cuddalore.On perusal of the return of income filed by the petitioner, it isseen that the total income is more than Rs.10 lakhs and hence thecase was transferred to the Jurisdictional Circle, AssistantCommissioner of Income Tax, Circle-2(1), Trichy, Trichy Circle, whoissued notice dated 21.10.2019 under Section 142(1) through onlinecalling for details in connection with the scrutiny proceedings andthe details about the cash deposits made during the assessment year2017-18 to be submitted on or before 05.11.2019 electronically.According to the respondent, the petitioner has conveniently omittedto state whether she has filed the details on or before 12.09.2019.The petitioner submitted some details on 05.11.2019, 27.11.2019 and30.11.2019. Further, a notice was issued on 05.12.2019 calling forsome details and explanations on or before 08.12.2019. He wouldfurther state that the petitioner had not submitted the details ascalled for in the notice dated 05.12.2019 and failed to dischargeher onus for the cash deposit of SBN noted to the tune ofRs.35,55,500/- and unexplained investment under Section 69 ofRs.17,88,228/- totally Rs.53,43,728/-. Hence, the above said amountof Rs.53,43,728/- under Section 69A was assessed as per Section115BBE and completed on 24.12.2019 under Section 144 of the Acti.e., best judgment assessment and the impugned orders came to bepassed. 6.Heard the learned counsel for the petitioner as well as thelearned Senior Standing Counsel for the respondent. 6.Heard the learned counsel for the petitioner as well as thelearned Senior Standing Counsel for the respondent. 7.Perusal of record shows that the assessment order has beenpassed on 24.12.2019 without granting time to the petitioner to filereply as per the direction of the Directorate of Income Tax bygranting time upto 29.12.2019. The main contention raised in thecounter is that the petitioner had been given the longestopportunity from 09.08.2018 till 16.12.2019 and despite the same,she only attempted to protract the proceedings. The petitioner hadnot co-operated with the department and failed to respond to thenotices under Sections 143(2) and 142(1) and also not filed replynor furnished evidence in response to the show cause notice dated05.12.2019. Since the petitioner has failed to discharge her onusfor the cash deposit of SBN noted to the tune of Rs.35,55,500/- andunexplained investment under Section 69 of Rs.17,88,228/- totallyRs.53,43,728/-, the above said amount of Rs.53,43,728/- underSection 69A was assessed as per Section 115BBE and completed on24.12.2019 under Section 144 of the Act i.e., best judgmentassessment and the impugned orders came to be passed. The saidcontention cannot be accepted for the simple reason that as per thedirection of the Directorate of Income Tax, the petitioner was notgranted time upto 29.12.2019. 8.This Court in similar matters cited by the petitioner wherehttps://hcservices.ecourts.gov.in/hcservices/assessment orders passed without granting further time, set aside the assessment orders therein and remitted the matter to theauthority concerned for fresh consideration. Admittedly, here also,the petitioner was not granted time and therefore, it is a case ofviolation of principles of natural justice. No personal hearing wasalso granted. If atleast personal hearing is granted to thepetitioner, the petitioner would have explained his case. Thoughthe respondent has raised many other contentions, since the impugnedorders have been passed without granting further time to thepetitioner to file reply, without adverting to the other merits ofthe case, only on the ground of violation of principles of naturaljustice, I am inclined to set aside the impugned orders. 9.Accordingly, the impugned orders of the respondent in PANBCCPS3685N vide Order No.ITBA/AST/S/144/2019-20/1022967569(1) dated24.12.2019 and raised a demand under Section 156 of the Income TaxAct in No.ITBA/AST/S/156/2019-20/1022967579(1) dated 24.12.2019 areset aside and the matter is remitted back to the respondent to passfresh order after giving opportunity to the petitioner for makinghis detailed reply and after affording opportunity of personalhearing, within a period of three months from the date of receipt ofa copy of this order. 10.With the above direction, this Writ Petition is allowed. Nocosts. Consequently, connected miscellaneous petitions are closed. // True Copy // Sd/-Assistant Registrar(CS-) bala / /2021Sub Assistant Registrar(CS) To The Assistant Commissioner of Income Tax,Income Tax Circle 2(1) Trichy,3[rd] Floor, Trichy Main Building,Williams Road, Cantonment, Tiruchirappalli-620 001. ORDER MADE INW.P(MD)No.1972 of 2020DATED : 23.07.2021 https://hcservices.ecourts.gov.in/hcservices/