Dismissed¶17

Patna Smart City Limited v. Assessment Unit, Income Tax Department

Patna HC3 Sept 2024CWJC/12174/2024

Case brief

AI extract

What is this about?

CWJC No.12174 of 2024, Patna High Court, decided 03-09-2024 (uploaded 05.09.2024); coram: K. Vinod Chandran, CJ (author) and Partha Sarthy, J. Patna Smart City Limited v. Assessment Unit, Income Tax Department. Petitioner challenged Annexure-P/7 assessment orders arguing it fell outside CBDT compulsory-scrutiny categories (Annexure-P/9, 10.06.2021) and that denial of personal hearing breached natural justice; both contentions rejected; writ dismissed with liberty to appeal subject to just exceptions including limitation. Keywords: compulsory selection for scrutiny; random selection; personal hearing column; natural justice; Article 226; Income Tax Act, 1961.

What did the court decide?

Liberty to file an appeal, if so desired, subject to just exceptions including limitation. ¶17

Patna Smart City Limited Vs Assessment Unit, Income Tax Department — Income Tax | Patna HC (2024)

What the court decided

AI extract

Outcome

Liberty to file an appeal, if so desired, subject to just exceptions including limitation.

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Issue for consideration

Whether the Annexure-P/7 assessment orders are invalid because the petitioner does not fall within any category prescribed in the CBDT guidelines (Annexure-P/9 dated 10.06.2021) for compulsory selection of returns for scrutiny. +1 more

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Court's answer

The CBDT guidelines for compulsory selection of returns for scrutiny do not preclude random selection for scrutiny by the Assessing Officers.

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Ratio / Principle

The categories under the guidelines are those to be taken up mandatorily for scrutiny; their inclusion creates no restriction on any other category being taken up for scrutiny.

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Key takeaways

With system-generated notices and on-line replies in specified forms, a personal hearing is required only where sought through the designated column; the petitioner did not tick 'Yes', so no hearing was required.ratio¶16
The petitioner's reply was duly considered in the order; there is no violation of principles of natural justice and no reason to interfere with the assessment order on that ground.ratio¶16
Given the statutory appellate remedy, there is no reason to invoke the extraordinary remedy under Article 226; the writ petition is dismissed with liberty to file an appeal subject to just exceptions including limitation.

Detailed headnote1 paragraphs

Government company (Patna Smart City Limited) challenged Annexure-P/7 income-tax assessment orders through a writ invoking Article 226. The High Court held: (i) the CBDT guidelines (Annexure-P/9, dated 10.06.2021) for compulsory selection of returns for complete scrutiny during FY 2021-22 only list categories for mandatory scrutiny and do not preclude random selection for scrutiny by Assessing Officers, so selection outside those categories is permissible; (ii) where assessment proceeds via system-generated notices and on-line replies in specified forms, a personal hearing is required only if sought through the dedicated column — the petitioner did not tick 'Yes' and its reply was duly considered, hence no violation of natural justice. Writ petition dismissed; petitioner left free to pursue the statutory appeal under the Income Tax Act, 1961, subject to just exceptions including limitation.

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.12174 of 2024

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Patna Smart City Limited a company incorporated under the Companies Act, 2013 having its Head Office at C/o Patna Municipal Corporation, Floor 2, Block - C, Maurya Lok Complex, Dakbunglow Road, Patna - 800001 through its Chief Finance Officer Shri Pravind Kumar Singh (Male) (aged about 49 years) Son of Shri Ram Pravesh Singh resident of Leela Kunj, Budh Vihar Colony, Bhoothnath Road, Bahadurpur Housing Colony, Patna, Bihar800026.

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... ... Petitioner/s

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Versus

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Assessment Unit, Income Tax Department Cannaught Circus, Mayur Bhawan, Cannaught Lane, Barakhamba, New Delhi, Delhi - 110001.

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... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. D.V.Pathy, Advocate For the Respondent/s : Mrs. Archana Sinha, Sr. SC, Income Tax ======================================================

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CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

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Date : 03-09-2024

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The petitioner, a government company is before this Court, challenging Annexure-P/7 series of assessment orders; when there is statutory appellate remedy provided under the Income Tax Act, 1961. The contention raised by the petitioner is that no scrutiny could have been carried out, as per the guidelines issued by the Central Board of Direct Taxes, as produced at Annexure-P/9 dated 10.06.2021. It is also submitted

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Patna High Court CWJC No.12174 of 2024 dt.03-09-2024 2/3

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that the petitioner is a completely owned government company depending only on the government funds to carry out the development activities with its seat at Patna; totally funded by the Government.

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2 . The guidelines, as placed at Annexure-P/9 is one for compulsory selection for returns of complete scrutiny during the financial year 2021-22 and the conduct of the assessment proceedings in such cases. The learned Counsel for the petitioner asserted that the petitioner does not come under any of the categories prescribed. However, we are of the opinion that the guidelines are only for compulsory selection of returns for scrutiny and it does not preclude random selection for scrutiny by the Assessing Officers. The categories coming under the guidelines are those which are to be taken up mandatorily for scrutiny and this does not create any restriction of any other category being taken up for scrutiny.

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3 . The next contention is one of violation of principles of natural justice, insofar as no hearing having been granted to the assessee. Admittedly, the petitioner while uploading the application did not seek for an opportunity for personal hearing. The petitioner’s contention is that the reply filed specifically sought for such personal hearing. As per the

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Patna High Court CWJC No.12174 of 2024 dt.03-09-2024 3/3

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system generated notices and uploading of on-line replies in specified forms; there is a specific column provided for requesting personal hearing. Unless the personal hearing is sought for, there would be no requirement to issue such personal hearing. Admittedly, in the present case, the column for personal hearing was not ticked as ‘Yes’. The reply was filed and it was duly considered in the order passed. We find absolutely no reason to interfere with the order also on the ground of violation of principles of natural justice.

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4 . On the above reasoning, we find absolutely no reason to invoke the extra ordinary remedy under Article 226. We dismiss the writ petition, however, leaving the petitioner to file an appeal, if so desired, subject to just exceptions; including that of limitation.

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(K. Vinod Chandran, CJ)

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( Partha Sarthy, J)

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sharun/-

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AFR/NAFR
CAV DATE
Uploading Date	05.09.2024
Transmission Date

Patna Smart City Limited v. Assessment Unit, Income Tax Department

Case brief

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Patna Smart City Limited v. Assessment Unit, Income Tax Department

Case brief

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