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Basf Catalysts India Pvt. Ltd. v. The Additional / Joint / Deputy / Assistant Commissioner

Madras HC26 Oct 2021WP/23028/2021

Case brief

AI extract

What is this about?

Writ petition assailing a draft order under Section 144C of the Income-tax Act for not considering objections submitted by the assessee. The Court set aside the order, directed the Revenue to proceed from the show cause notice stage, and mandated completion of assessment within six weeks.

What did the court decide?

Impugned date 28.09.2021 order set aside; Directions to Revenue to proceed from SCN stage and complete assessment within six weeks.

Basf Catalysts India Pvt. Ltd. Vs The Additional / Joint / Deputy… — Income Tax | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 26.10.2021

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CORAM

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THE HON'BLE MR.JUSTICE M.SUNDAR

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W.P.No.23028 of 2021 and W.M.P.No.24223 of 2021

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M/s.BASF Catalysts India Private Limited, Represented by its Managing Director Mr.Anil Kumar Choudhary P.No.8/1, Veerapuram Village, Mahindra World City, Chengelpet Taluk, Kancheepuram-603 002, Tamil Nadu, India. ...Petitioner

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-Vs.-

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The Additional / Joint / Deputy / Assistant Commissione of Income Tax / Income-tax Officer [“AO”] National e-Assessment Centre, Delhi.

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Deputy Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Chennai. ...Respondents

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Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records on the file of the first respondent and quash the impugned order in No.ITBA/AST/F/144C/2021-22/1035979832(1) dated 28.09.2021 passed by the first respondent under Section 144C of the Income Tax Act 1961, as illegal.

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For Petitioner : Ms.N.V.Lakshmi

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For Respondents : Ms.Hema Muralikrishnan Senior standing counsel for Income Tax O R D E R

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Captioned main writ petition has been filed assailing a draft order under Section 144C of 'The Income-tax Act, 1961 (43

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https://hcservices.ecourts.gov.in/hcservices/

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of 1961)' [hereinafter 'IT Act' for the sake of brevity] being 'draft order dated 28.09.2021 bearing reference DIN & Order No: ITBA/AST/F/144C/2021-22/1035979832(1)' [hereinafter 'impugned order' for the sake of convenience and clarity].

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Ms.N.V.Lakshmi, learned counsel on record for writ petitioner-assessee, submits that the impugned order was preceded by a 'show cause notice dated 25.09.2021 bearing reference DIN: ITBA/AST/F/143(3)(SCN)/2021-22/1035883541(1)' [hereinafter 'said SCN' for the sake of convenience and clarity]. To be noted, though said SCN is a notice to show cause, it also contains draft assessment order wherein variations proposed have been set out.

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Be that as it may, said SCN has been digitally signed on 25.09.2021 at 12:38:01 IST. Assuming, it was uploaded immediately after being digitally signed, it was obviously uploaded well past noon of 25.09.2021. Paragraph No.3 of said SCN reads as follows:

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'3. Kindly submit your response through your registered e-filing account at www.incometax.gov.in by 23:59 hours of 27.09.2021, whereby you may either:-'

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Learned counsel submits that 25.09.2021 was Saturday, obviously, 26.09.2021 was Sunday which was a holiday and writ petitioner-assessee was left with only one day namely, Monday 27.09.2021 and writ petitioner-assessee noticed the said SCN only on Monday. However, the writ petitioner-assessee sent their objections qua draft assessment order on 28.09.2021. This is at page Nos.67 to 69 of the typed set of papers. A scanned reproduction of objections of writ petitioner-assessee dated 28.09.2021 is as follows:

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https://hcservices.ecourts.gov.in/hcservices/

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https://hcservices.ecourts.gov.in/hcservices/

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https://hcservices.ecourts.gov.in/hcservices/

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Therefore, the short point that has been raised by learned counsel for writ petitioner-assessee is, inadequate time for responding to said SCN and impugned order being made post objections by saying that writ petitioner-assessee has not filed any reply.

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Ms.Hema Muralikrishnan, learned senior standing counsel for Income-tax accepts notice on behalf of both the respondents. Learned Revenue counsel pointed out that the writ petitionerassessee was able to send a reply on 28.09.2021, it could have as well sent a communication on 27.09.2021 requesting for some more time. It was also submitted by learned Revenue counsel that the impugned order is a draft order under Section 144C of IT Act and therefore, objections can even be construed as objections to the draft.

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Owing to the short point on which the captioned writ petition turns, with consent of learned counsel on both sides, main writ petition was taken up.

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With regard to the submission that communication could have been sent on 27.09.2021 requesting for time, it may not be necessary to go into that aspect of the matter in this case, as the impugned order has been made on the basis that the writ petitioner-assessee has not responded. This means that the response of the writ petitioner-assessee sent on 28.09.2021 has

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not been taken into account in making the impugned order. As far as the objections of writ petitioner-assessee dated 28.09.2021 being considered as objections to draft order is concerned, if the objections to said SCN are considered as it inter alia pertains to proposed additions, there is every possibility of draft order being different. It is made clear that this Court has not expressed any opinion or view on this aspect of the matter and this Court is only setting out the position that when an assessee's objections to SCN are considered, owing to the objections, there can be a change in the draft order, more so when it pertains to proposed additions. Therefore, in the facts and circumstances of the case on hand, it cannot be gainsaid that the objections of writ petitioner-assessee qua said SCN can be considered as objections to draft order.

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This Court carefully considered the rival contentions and also took into account requirements to balance rights and contentions of assessee as well as Revenue. In this view of matter, this Court deems it appropriate to set aside the impugned order without expressing any opinion on merits and directing the Revenue to proceed from the said SCN stage and complete the assessment as expeditiously as possible. To articulate little more on this, this will protect the interest of Revenue and it will also douse the anxiety of the assessee qua uncertainty. It is in this context that this Court has made observations supra regarding balancing rights of Revenue and writ petitioner-assessee being preserved. Therefore, captioned writ petition is disposed of by making the following order:

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(a) Impugned order being order dated 28.09.2021 bearing reference DIN & Order No: ITBA/AST/F/144C/202122/1035979832(1) is set aside solely on the ground that writ petitioner-assessee's objections to 25.09.2021 SCN (given on 28.09.2021) has not been considered;

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(b) The twin limb qua previous direction is, this Court has not expressed any view or opinion on the merits of the matter;

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(c) The respondent shall now proceed from the said SCN stage i.e., SCN dated 25.09.2021 bearing reference DIN: ITBA/AST/F/143(3)(SCN)/2021-22/1035883541(1) qua assessment year 2018-19, considering the response of writ petitioner-assessee (at page Nos.67 to 69 of the typed set of papers) and complete the legal drill of assessment as expeditiously as the business of the respondent would permit and in any event within six weeks from today i.e., on or before 07.12.2021;

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Captioned main Writ Petition is disposed of with the

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aforementioned directives. Consequently, captioned writ miscellaneous petition is also disposed of as closed. There shall be no order as to costs.

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Sd/-

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Assistant Registrar(CS-IX)

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//True Copy//

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Sub Assistant Registrar

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nsa/mk

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The Additional / Joint / Deputy / Assistant Commissioner of Income Tax / Income-tax Officer [“AO”] National e-Assessment Centre, Delhi.

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Deputy Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Chennai.

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+1cc to Ms.Hema Muralikrishnan, Advocate, S.R.No.54994

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+1cc to Mr.N.V.Balaji, Advocate, S.R.No.55470

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W.P.No.23028 of 2021 and W.M.P.No.24223 of 2021

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AK-II(CO) RGA(29/11/2021)

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https://hcservices.ecourts.gov.in/hcservices/

Basf Catalysts India Pvt. Ltd. v. The Additional / Joint / Deputy / Assistant Commissioner

Case brief

What is this about?

What did the court decide?

Basf Catalysts India Pvt. Ltd. v. The Additional / Joint / Deputy / Assistant Commissioner

Case brief

What is this about?

What did the court decide?

What the court decided

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