Remanded

Swapna Manuel v. The Assistant Commissioner of Income Tax

Madras HC27 Oct 2021WP/23071/2021

Case brief

AI extract

What is this about?

The High Court quashed an income-tax assessment order passed under Sections 144 and 147 of the IT Act. The court held that the preceding show cause notice failed to grant the petitioner adequate time to respond, violating the principle of natural justice. The order was remanded for redoing the assessment afresh.

What did the court decide?

Impugned assessment order set aside; matter remanded for redoing assessment afresh with adequate time granted to the petitioner.

Swapna Manuel Vs The Assistant Commissioner of Income Tax — Income Tax | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 27.10.2021

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CORAM

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THE HON'BLE MR.JUSTICE M.SUNDAR

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W.P.NO.23071 OF 2021
AND
W.M.P.NO.24285 OF 2021

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Swapna Manuel

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20/26, Perumal Kovil Street
Taramani, Chennai-600 113.

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...Petitioner

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-Vs.-

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The Assistant Commissioner of Income tax
Central Circle 2(3), Room No.B-5, 'B' Wing
Investigation Building, No.46, Mahatma Gandhi Road,
Nungambakkam, Chennai-600 034.

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 ... Respondent

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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 of the respondent in the assessment order
bearing Identification No.ITBA/AST/M/147/2021-22/1036026053(1)
dated 29.09.2021 in pan No.BNNPS8194L passed in my case for AY
2016-2017, quashing the same.

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For Petitioner : Mr.M.V.Swaroop

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For Respondent : Mr.A.P.Srinivas

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 Senior standing counsel
 for Income Tax

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

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O R D E R

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Captioned main writ petition has been filed assailing an
assessment order dated 29.09.2021 made under Section 144 read
with Section 147 of 'The Income-tax Act, 1961 (43 of 1961)'
[hereinafter 'IT Act' for the sake of brevity] pertaining to
'Assessment year 2016-2017' [hereinafter 'said AY' for the sake
of convenience and clarity] qua writ petitioner. This
assessment order shall hereinafter be referred to as 'impugned
order' for the sake of convenience and clarity.

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2. Notwithstanding very many averments and several
grounds raised in writ affidavit filed in support of captioned
main writ petition, Mr.M.V.Swaroop, learned counsel for writ
petitioner submitted that the impugned order was preceded by a
'show cause notice dated 24.09.2021 bearing reference DIN &
Notice No.ITBA/AST/F/142(1)/2021-22/1035876104(1)' [hereinafter
'said SCN' for the sake of convenience and clarity]. To be
noted, said SCN has been issued under Section 142(1) of IT Act.
Learned counsel submits that said SCN is dated 24.09.2021, it
has been digitally signed at 8 minutes past 08.00 p.m. on
24.09.2021 and it calls upon the writ petitioner/Assessee to
furnish information on the points or matters specified therein
on or before 3 minutes past 11.00 a.m. on 27.09.2021. Learned
counsel points out that 24.09.2021 was Friday and 27.09.2021 was
obviously, Monday. Effectively in terms of working days, even
if 9.00 a.m. on 27.09.2021 Monday morning is taken as reckoning
date and time, writ petitioner had barely 2 hours and 3 minutes
to respond to said SCN. In the light of the importance of this
point that is urged, this Court deems it appropriate to extract
and reproduce the said SCN and the same 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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3. Be that as it may, the writ petitioner managed to send
a reply i.e., partial reply and sought for two weeks time to
submit balance documents. This was on 27.09.2021 under a cover
of letter which reads as follows:

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

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4. To be noted, writ petitioner has also sought for
reasons for reopening which means the writ petitioner is taking
GKN Driveshafts principle route/mechanism [GKN Driveshafts
(India) Ltd., Vs. Income-Tax Officer and others reported in
(2003) 259 ITR 19] but it may not be necessary to go into that
aspect of the matter. Suffice to say that notwithstanding the
aforementioned trajectory qua said SCN and partial response of
writ petitioner/Assessee and writ petitioner/assessee seeking
two weeks time, the impugned order was passed one working day
later i.e., on 29.09.2021. This has caused infraction of NJP
(Nature Justice Principle) qua impugned order, is learned
counsel's say.

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

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5. Mr.A.P.Srinivas, learned Senior standing counsel for
Income tax accepted notice on behalf of lone respondent and with
the consent of learned counsel on both sides, main writ petition
was taken up owing to possibility of disposing of the matter on
the aforementioned short point.

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6. Learned Revenue counsel submitted that there is no
infirmity qua said SCN as the same has been duly issued under
Section 142(1) of IT Act. This Court carefully considered the
submissions of both sides. It is not a case of infirmity qua
said SCN, but it is a case of adequacy of time granted qua said
SCN and as to whether that tantamounts to infraction of NJP
principle in the case on hand. In the light of the narrative
thus far, it is clear that reasonable time has not been given to
the writ petitioner/Assessee to respond to said SCN much less
ample or adequate time. Another facet of the matter is, the
writ petitioner managed to respond (partially though) and sought
for two weeks time to send the other documents, considering the
nature of variation, this Court is of the considered view that
it is only appropriate that the respondent should have waited
for a fortnight for the writ petitioner to send in other
documents which has been described as 'balance documents' under
cover of letter of writ petitioner dated 27.09.2021. To be
noted, this Court has not expressed any opinion or view at this
juncture on the request for reason for reopening made by writ
petitioner which is GKN Driveshafts principle/route. This is
left to the wisdom and discretion of the respondent at this
juncture.

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7. In the light of the narrative, discussion and
dispositive reasoning thus far, this Court is of the considered
view that this is a appropriate and a fit case for sending the
matter back to respondent for redoing/doing de
novo assessment from said SCN stage. Therefore, the following
order is passed:

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(a) Impugned order being assessment order dated
29.09.2021 made under Section 144 read with Section 147 of 'The
Income-tax Act, 1961 (43 of 1961)' [hereinafter 'IT Act' for the
sake of brevity] qua writ petitioner is set aside solely on the
ground that reasonable time has not been granted to writ
petitioner qua preceding SCN i.e., SCN preceding the impugned
order being SCN dated 24.09.2021;

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

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(b) As sequitur to the previous limb (though obvious) it
is made clear that this Court has not expressed any view (in
this order) on the merits of the matter;

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(c) The writ petitioner/Assessee shall now file the
'balance documents' and complete the reply within a fortnight
from today i.e., on or before 10.11.2021;

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(d) Thereafter, the respondent shall redo the assessment
and pass assessment order within six weeks therefrom i.e., on or
before 22.12.2021. To be noted, request of writ
petitioner/Assessee for reasons for reopening (GKN Driveshafts
principle) vide 27.09.2021 response is left open and therefore,
the same shall also be dealt with within aforementioned six
weeks time frame;

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8. Captioned main Writ Petition is disposed of with the
above 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-VI)

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// True Copy //

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Sub Assistant Registrar

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mk

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To

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The Assistant Commissioner of Income tax
Central Circle 2(3), Room No.B-5, 'B' Wing
Investigation Building, No.46, Mahatma Gandhi Road,
Nungambakkam, Chennai-600 034.

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+1cc to Mr.A.P.Srinivas, Advocate, S.R.No.55809

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W.P.No.23071 of 2021
and
W.M.P.No.24285 of 2021

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VG-II(CO)
RLP(22/11/2021)

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

Swapna Manuel v. The Assistant Commissioner of Income Tax

Case brief

What is this about?

What did the court decide?

Swapna Manuel v. The Assistant Commissioner of Income Tax

Case brief

What is this about?

What did the court decide?

What the court decided

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