Allowed

Puthukai Vayaningad Vairajathan Easwarante Kshethra Committee, v. the Income Tax Officer

Kerala HC5 Dec 2023WP(C)/15844/2022

Case brief

AI extract

What is this about?

The High Court allowed two writ petitions impugning assessment and penalty orders passed under the Income Tax Act, 1961. The Court held that the principles of natural justice were violated as the petitioner's representative was unavailable in judicial custody. The orders were set aside and the matter remanded for re-adjudication.

What did the court decide?

Impugned assessment and penalty orders set aside; matter remanded to the Assessing Authority for re-adjudication after granting petitioner three weeks time to file reply, with directions for only one

Puthukai Vayaningad Vairajathan Easwarante… — Civil Procedure and Limitation | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH

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TUESDAY, THE 5TH DAY OF DECEMBER 2023 / 14TH AGRAHAYANA, 1945

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WP(C) NO. 37467 OF 2022

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PETITIONER:

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PUTHUKAI VAYANINGAD VAIRAJATHAN EASWARANTE
KSHETHRA COMMITTEE, BANGALAM, PUTHUKAI, NILEWAR,
KASARAGOD 671 314, REPRESENTED BY ITS FORMER
TREASURER SRI.C.V.KRISHNAN., AGED 73 YEARS.

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BY ADVS.
 SRI. V. P. NARAYANAN
 SRI. ALAN PRIYADARSHI DEV

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RESPONDENTS:

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1 THE INCOME TAX OFFICER, WARD 1 & TPS, AAYAKARA BHAVAN, VIDYANAGAR, KASARAGOD KERALA, PIN – 671123.

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2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, MANANCHIRA, KOZHIKODE, PIN – 673001.

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3 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAWAN, MAMANCHIRA, KOZHIKODE, PIN – 673001.

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BY ADVS.

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 SRI. P. G. JAYASHANKAR PGJ
 SMT. KEERTHIVAS GIRI
 SRI. CHRISTOPHER ABRAHAM – SC – INCOME TAX

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
05.12.2023, ALONG WITH WP(C).15844/2022, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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WP(C) NO. 37467 & 15844 OF 2022

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY,THE 5^TH DAY OF DECEMBER 2023 / 14TH AGRAHAYANA, 1945

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WP(C) NO. 15844 OF 2022

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PETITIONER:

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PUTHUKAI VAYANINGAD VAIRAJATHAN EASWARANTE KSHETHRA
COMMITTEE, BANGALAM,
PUTHUKAI P. O., NILESWAR, KASARAGOD-671314,
REPRESENTED BY ITS FORMER TREASURER,
SRI. C. V. KRISHNAN.

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BY ADVS.
 SRI. T. M. SREEDHARAN (SR.)
 SRI. V. P. NARAYANAN
 SRI. ALAN PRIYADARSHI DEV

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RESPONDENTS:

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1 THE INCOME TAX OFFICER, WARD -1 & TPS, AAYAKAR BHAVAN, VIDYANAGAR, KASARAGOD-671 123.

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2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001.

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3 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001.

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4 INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, 1ST FLOOR, (BLOCK C-1 & C-II), KENDRIYA BHAVAN, OPP .CSEZ, KAKKANAD, COCHIN-682 037, REP BY ITS ASSISTANT REGISTRAR.

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BY ADVS.
 SRI. P. G. JAYASHANKAR PGJ
 SMT. KEERTHIVAS GIRI
 SRI. CHRISTOPHER ABRAHAM – SC - INCOME TAX

¶31

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 05.12.2023, ALONG WITH WP(C).37467/2022, THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:

¶32

WP(C) NO. 37467 & 15844 OF 2022

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DINESH KUMAR SINGH, J.

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W.P.(C) Nos.37467 & 15844 of 2022

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Dated this the 5^th day of December, 2023

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JUDGMENT

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Heard Ms. Divya Raveendran, learned Counsel for the petitioner and Mr. Christopher Abraham, learned Senior Standing Counsel for the the Income Tax Department.

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These writ petitions has been filed impugning Exhibit P-3 assessment order dated 31.03.2022 and the penalty orders under Sections 271 (1) (c) and 271 (1) (b) of the Income Tax Act, 1961 dated 22.09.2022 and 20.09.2022 respectively. These orders have been passed after the matter was remanded back by the Income Tax Appellate Tribunal, Cochin Bench, Cochin vide Exhibit P-2 Order dated 07.10.2020. The Tribunal in paragraph 5 of the said Order dated 07.10.2022 noticed the fact that the Treasurer of the petitioner Sri. C. V. Krishnan was in judicial custody and therefore, no effective representation could be made which required assistance of Chattered Accountant. It was also noticed that the Books of Accounts were available only with Sri. C. V. Krishnan who was in judicial custody. Noticing the violation of the principles of

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WP(C) NO. 37467 & 15844 OF 2022

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natural justice, the case was restored to the file of the Assessing Officer for re-adjudication after granting the assessee an adequate and effective opportunity of hearing. On remand also, the notice was served when Sri. C. V. Krishnan was in judicial custody and was in Jail. He sought for time for filing the reply to the notice under Section 142 (1) of the Income Tax Act. But since the last date for finalising the assessment proceedings was expiring on 31.03.2021, without granting extension of time, the assessment order came to be passed under Section 144 read with Section 254 of the Income Tax Act, 1961 and the tax was assessed at Rs. 3,20,665/- with direction to initiate the penalty proceedings under Section 271B, 271 (1) (b) and 271 (1) (c) of the Act.

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The factors and grounds which were taken note of by the Income Tax Appellate Tribunal in its Order dated 07.10.2020 were present when the present impugned assessment order and penalty orders came to be passed. I am of the considered view that the petitioner was not afforded with adequate and effective opportunity of being heard as directed by the Tribunal and there has been a violation of the principles of natural justice in finalising the assessment and penalty orders impugned in these writ petitions.

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WP(C) NO. 37467 & 15844 OF 2022

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¶46

Considering the aforesaid facts, these writ petitions are allowed and the impugned assessment and penalty orders are set aside and the matter is remanded back to the Assessing Authority to pass fresh order after considering the reply to be filed by the assessee and documents produced. The petitioner is granted three weeks time from today to file reply to the notices under Section 142 (1) and produce all the evidence and records for examination before the Assessing Authority. The petitioner should be afforded an opportunity of hearing by the Assessing Authority before finalising the assessment order. It is made clear that no further opportunity shall be granted to the petitioner for filing the reply to the notice under Section 142 (1) or producing the evidence and documents. It is also made clear that only one opportunity of being heard shall be granted by the Assessing Officer to the petitioner before finalising the assessment order.

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With the aforesaid directions, these writ petitions are hereby allowed.

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Sd/DINESH KUMAR SINGH JUDGE

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Svn

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WP(C) NO. 37467 & 15844 OF 2022

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APPENDIX OF WP(C) 37467/2022

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PETITIONER’S EXHIBITS

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`EXHIBIT P1`	`TRUE COPY OF ASSESSMENT ORDER DATED` `16.01.2008`
`EXHIBIT P2`	`TRUE COPY OF THE ORDER DATED 7.10.2020 IN` `ITA NO 459/C/2019`
`EXHIBIT P3`	`TRUE COPY OF THE ASSESMENT ORDER DATED` `31.03.2022 FOR AY 2006-07`
`EXHIBIT P4`	`TRUE COPY OF THE INTERIM ORDER IN WPC NO` `15844 OF 2022 DATED 13.5.2022`
`EXHIBIT P5`	`TRUE COPY OF THE PENALTY ORDER PASSED BY THE` `FIRST RESPONDENT DATED 22.9.2022 UNDER` `SECTION 271(1)©`
`EXHIBIT P6`	`TRUE COPY OF THE PENALTY ORDER PASSED BY THE` `FIRST RESPONDENT DATED 20.9.2022 UNDER` `SECTION 271(1)(B)`

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WP(C) NO. 37467 & 15844 OF 2022

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¶57

APPENDIX OF WP(C) 15844/2022

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PETITIONER’S EXHIBITS

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`EXHIBIT P1`	`TRUE COPY`	`OF THE ASSESSMENT ORDER DATED`
	`16.01.2008` `RESPONDENT`	`U/S 144 PASSED BY THE 1ST`
`EXHIBIT P2`	`TRUE COPY` `BY THE 4TH`	`OF THE ORDER DATED 7.10.2020 PASSED` `RESPONDENT IN ITA NO.459/COCH/2019`
`EXHIBIT P3`	`TRUE COPY` `31.03.2022` `U/S. 144 R.`	`OF THE ASSESSMENT ORDER DATED` `FOR THE ASSESSMENT YEAR 2006-07` `W.S. 254 BY THE 1ST RESPONDENT`
`EXHIBIT P4`	`TRUE COPY` `INCOME TAX` `0148`	`OF THE JUDGMENT IN T.C.N MENON VS` `OFFICER, REPORTED IN (1974) 96 ITR`
`EXHIBIT P5`	`TRUE COPY` `SALES TAX` `REPORTED IN`	`OF THE JUDGMENT IN COMMISSIONER OF` `. VS. H.M.ESUFALI H.M.ABDUALALI` `(1973) AIR 2266`
`EXHIBIT P6`	`TRUE COPY` `COTTON MIL` `TAX REPORTE`	`OF THE JUDGMENT IN DHAKESWARI` `LS LTD. VS. COMMISSIONER OF INCOME` `D IN (1954) 26 ITR 0775`
`EXHIBIT P7`	`TRUE COPY` `LAL PARDU` `INCOME TAX,`	`OF THE JUDGMENT IN BRIJI BHUSHAN` `MAN KUMAR.V.S. COMMISSIONER OF` `REPORTED IN (1978) 115 ITR 0524`

Puthukai Vayaningad Vairajathan Easwarante Kshethra Committee, v. the Income Tax Officer

Case brief

What is this about?

What did the court decide?

Puthukai Vayaningad Vairajathan Easwarante Kshethra Committee, v. the Income Tax Officer

Case brief

What is this about?

What did the court decide?

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