Wp(Md)/1974/2020 Of M.thirugnanam v. The Assistant Commissioner Of Income Tax

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 23.07.2021 CORAM : THE HONOURABLE MRS.JUSTICE J.NISHA BANU W.P(MD)No.1974 of 2020 M.Thirugnanam... Petitioner The Assistant Commissioner of Income Tax,Circle 2(1) Trichy,O/o. the Assistant Commissioner of Income Tax,3[rd] Floor, 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/144/2019-20/1022911126(1) dated 23.12.2019 and raised a demand under Section156 of the Income Tax Act in No.ITBA/AST/S/156/2019-20/1022911177(1)dated 23.12.2019 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 PANACLPT8747Q vide Order No.ITBA/AST/S/144/2019-20/1022911126(1) dated23.12.2019 and raised a demand under Section 156 of the Income TaxAct in No.ITBA/AST/S/156/2019-20/1022911177(1) dated 23.12.2019 andquash the same as ex-facie illegal, arbitrary, without jurisdictionand against the principles of natural justice. 2.The petitioner is doing the business of hiring of vehiclesand supplying red gravel and for the assessment year 2017-18, thepetitioner filed return and the assessment has been completed.Subsequently, a notice was issued by the Assistant Commissioner,Thanjavur, on 22.09.2018 under Section 143(2) of the Act andthereafter a notice under Section 142(1) of the Act was issued on21.10.2019 by the respondent. The petitioner filed reply in part on18.11.2019 and agreed to furnish the other details at the time ofhttps://hcservices.ecourts.gov.in/hcservices/ personal hearing. Again on 22.11.2019, further details were filedand the petitioner requested for personal hearing. The respondentissued a notice under Section 142(1) of the Act on 07.12.2019seeking for the first time fresh details including the details forthe assessment year 2016-2017 even though the assessment year is2017-18 and granted time upto 10.12.2019. The petitioner filedreply on 10.12.2019 seeking 15 days time for giving fresh detailsrequested. According to the petitioner, the respondent did notconsider the letter dated 10.12.2019 and passed the assessment orderon 23.12.2019 without granting the time and therefore, thepetitioner has filed the present writ petition stating that theimpugned order has been passed against the principles of naturaljustice and also against the circular issued by the Directorate ofIncome Tax on 26.12.2019 in which it was informed that the facilityfor electronic submission of documents shall be automatically closedon 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 22.09.2018 by the Assistant Commissioner, Thanjavur,through electronic mode. Further notice under Section 142(1) wasissued on 21.10.2019 calling for details in connection with cashdeposits made during demonitization period to be submitted on orbefore 05.11.2019 electronically. According to the respondent, thepetitioner had submitted details on 18.11.2019 and 22.11.2019partially and thereafter further notice under Section 142(1) wasissued on 07.12.2019 to furnish accounts and documents to besubmitted on or before 10.12.2019. He would further state that thatpetitioner has filed adjournment petition dated 10.12.2019 seekingfurther extension time of 15 days and the Assessing Officer did notentertain the adjournment petition because the time limit tocomplete the assessment expired on 31.12.2019 and therefore, theassessment order was concluded under Section 144 of the Act i.e.,best judgment assessment and the impugned orders came to be passed. 6.Heard the learned counsel for the petitioner as well as thelearned Senior Standing Counsel for the respondent. 7.Admittedly, the assessment order has been concluded in spiteof the petitioner's request seeking further time for making hisreply. Admittedly, the petitioner was not given opportunity by therespondent by not considering his petition dated 10.12.2019 and hasclosed the Portal on 17.12.2019. The main contention raised in thecounter is that the Assessing Officer did not entertain theadjournment petition of the petitioner, because the time limit tocomplete the assessment expired on 31.12.2019. The petitioner hasnot submitted the details as called for through the notice underSection 142(1) of the Act. Since the petitioner has failed todischarge the burden of proof for the cash deposit of SBN note tothe tune of Rs.31,08,000/- and agricultural income of Rs.7,43,800/-totalling Rs.38,51,800/-, the respondent had no other option exceptto conclude the assessment under Section 144 of the Act i.e., bestjudgment assessment. The said contention cannot be accepted for thesimple reason that the petitioner has filed adjournment petitiondated 10.12.2019 seeking 15 days further time. Admittedly, theAssessing Officer did not entertain the said adjournment petition. 8.This Court in similar matters cited by the petitioner whereassessment orders passed without granting further time, set asidethe assessment orders therein and remitted the matter to theauthority concerned for fresh consideration. Admittedly, here also,the petitioner's petition for adjournment has not been consideredand therefore, it is a case of violation of principles of naturaljustice. No personal hearing was also granted. If atleast personalhearing is granted to the petitioner, the petitioner would haveexplained his case. Though the respondent has raised many othercontentions, since the impugned orders have been passed withoutconsidering the petitioner's adjournment petition, without advertinghttps://hcservices.ecourts.gov.in/hcservices/to the other merits of the case, only on the ground of violation of principles of natural justice, I am inclined to set aside theimpugned orders. 9.Accordingly, the impugned orders of the respondent in PANACLPT8747Q vide Order No.ITBA/AST/S/144/2019-20/1022911126(1) dated23.12.2019 and raised a demand under Section 156 of the Income TaxAct in No.ITBA/AST/S/156/2019-20/1022911177(1) dated 23.12.2019, 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-) / /2021Sub Assistant Registrar(CS) bala ToThe Assistant Commissioner of Income Tax,Circle 2(1) Trichy,O/o. the Assistant Commissioner of Income Tax,3[rd] Floor, Main Building,Williams Road, Cantonment, Tiruchirappalli-620 001. cm(CO)TR(06.08.2021) 4P 2C ORDER MADE INW.P(MD)No.1974 of 2020DATED : 23.07.2021 https://hcservices.ecourts.gov.in/hcservices/