Madras High Court
M/S.Williams Lea India Private Limited vs Additional/Joint/Deputy/Assistant ... on 28 June, 2022
Author: Anita Sumanth
Bench: Anita Sumanth
W.P.Nos.12760 of 2021 etc. batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 28.06.2022
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.No.12760 of 2021 &
WMP Nos.13557 and 13558 of 2021
and WMP No.24063 of 2021
and
W.P.Nos.12809 of 2021 & 9818 of 2022
WMP Nos.13602, 13603, 19359 of 2021
9536 and 9537 of 2022
And
W.P.No.12875 of 2021 &
WMP.Nos.13682 and 13683 of 2021
And
W.P.No.12994 of 2021 &
WMP Nos.13799 and 13802 of 2021
And
W.P.No.13314 of 2021 &
WMP.No.17875, 14137 & 14138 of 2021
And
W.P.No.13025 of 2021 &
WMP.No.13535 & 13833 of 2021
And
W.P.No.13425 of 2021 &
WMP.No.14289 & 14291 of 2021
And
1
https://www.mhc.tn.gov.in/judis
W.P.Nos.12760 of 2021 etc. batch
W.P.No.13232 of 2021 &
WMP.No.14034 & 14033 of 2021
And
W.P.No.13069 of 2021 &
WMP.No.13873 & 13876 of 2021
W.P.No.12760 of 2021:
M/s.Williams Lea India Private Limited
represented by the authorized signatory,
blesson John Kaduvinal
... Petitioner
Vs
1. Additional/Joint/Deputy/Assistant Commissioner of Income Tax/
Income Tax Officer,
National e-Assessment Centre, Delhi.
2. Assistant Commissioner of Income-tax,
Corporate Circle 3(2),
Wanaparthy Block – Aayakar Bhawan,
Nungambakkam, Chennai.
3. Chief Commissioner of Income Tax
National e-Assessment Centre, Delhi.
... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, calling for the records on the files f the 1st
respondent in passing the impugned order No.ITBA/AST/S/143(3)/2021-
22/1032623502(1) for the assessment year 2017-18 under Section 143(3) read
with Section 144B of the Act dated 22.04.2021, quash the same as illegal,
2
https://www.mhc.tn.gov.in/judis
W.P.Nos.12760 of 2021 etc. batch
arbitrary, devoid of merit and passed in violation of the procedure mandated by
the Act.
WP.Nos. For Petitioner Respondents
W.P.No.12760 Mr.N.V.Balaji Mrs. Hema Murali Krishnan,
of 2021 Senior Standing Counsel.
W.P.Nos.12809 Mr.R.Venkatanarayanan Mrs. Hema Murali Krishnan,
of 2021 & 9818 for M/s.Subbaraya Aiyar Senior Standing Counsel.
of 2022 Padmanabhan
W.P.No.12875 of Mr.B.Kumar Mrs. Hema Murali Krishnan,
2021 Senior Counsel Senior Standing Counsel.
for Mr.S.Ramachandran
W.P.No.12994 of Mr.SP.Chidambaram Mr.ANR.Jayaprathap
2021 Junior Standing Counsel.
W.P.No.13314 of Mr.R.Sivaraman Mrs. Hema Murali Krishnan,
Senior Standing Counsel.
W.P.No.13025 of Mr.A.S.Sriraman Mrs. Hema Murali Krishnan,
2021 Senior Standing Counsel.
W.P.No.13425 of Mr.R.Swarnavel Mrs. Hema Murali Krishnan,
2021 Senior Standing Counsel.
W.P.No.13232 of Mr.R.Sivaraman Mrs. Hema Murali Krishnan,
2021 Senior Standing Counsel.
W.P.No.13069 of Mr.A.S.Sriraman Mrs. Hema Murali Krishnan,
3
https://www.mhc.tn.gov.in/judis
W.P.Nos.12760 of 2021 etc. batch
2021 Senior Standing Counsel.
COMMON ORDER
Assessments under the provisions of the Income Tax Act, 1961 transitioned to the faceless mode by issuance of Notification bearing No. 61 dated 12.09.2019, as amended by Notification No.60 dated 13.08.2020 (notifi- cation in question). The reason for transition is stated to be the necessity felt for uniformity in approach in assessments, dehors the attendant complications that came with personal interaction between assessees and officers of the De- partment. With this end in mind, a Scheme had been formulated under the No- tification in question, that provides for the setting up of Regional Assessment Units in various parts of the Country.
2. The procedure envisaged filing of returns by assessees and the pro- cessing of those returns on a centralized basis by the Central Unit. The Central Unit thereafter selected the returns on a random basis and thereafter, allocated the same to Regional Units. As this allocation took place on an annual basis, returns of the same assessee for different years could be allotted to different 4 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch Assessing Officers. Thereafter, issues that arose from the return of income were identified at the Regional level. The Notification provided for minute de- tails of procedure in regard to how the principles of natural justice were to be adhered to, the respective assesses heard and assessments finalized.
3. The system of assessment in vogue under the Notification was only for the period 2020-21, and the procedure contemplated and followed under the Notification became statutorily enshrined in Section 144B of the Act with effect from 01.04.2021, that is A Y 2021-22, onwards.
4. This order relates to a batch of 10 Writ Petitions where the common grievance of the petitioners concerned relates to the violation of the principles of natural justice, in the framing of the assessments. Since admittedly, there have been difficulties faced by both the assessees as well as the respondents in adhering to the timelines under the Notification for completion of the assess- ments, all learned counsels agree that they will, by concurrence, adhere to the timelines fixed under this order. In fact, the revised timelines fixed are only at the suggestion of all learned counsel. I now advert to specifics of the violations in procedure in each specific Writ Petition as under:
W.P.No.12760 of 2021:
5
https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
5. Heard Mr.N.V.Balaji, learned counsel for the petitioner and Mrs.Hema Muralikrishnan, learned Senior Standing Counsel for the respondent. The challenge is to order dated 22.04.2021 passed under the provisions of the Income Tax Act, 1961. A procedural irregularity that has been pointed out as far as the present assessment is concerned, is the lack of opportunity of personal hearing, prior to the framing of assessment.
6. That apart, learned counsel for the petitioner would submit that a show cause notice has been issued, for which the assessee was also permitted to upload its reply, that was duly uploaded. Though the petitioner had specifically sought an opportunity of personal hearing via the written submissions no opportunity was granted, which constitutes a violation.
7. According to the respondent, the website of the income tax department specifically provides for a link that has to be activated for availing of an opportunity of personal hearing. The petitioner has not activated the link, and thus, the question of personal hearing does not arise. In my considered view, this cannot constitute a fatal flaw that would stand in the way of an effective and efficacious opportunity of hearing. Admittedly the petitioner has 6 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch sought an opportunity of hearing in the written submissions filed and this constitutes a legitimate request that cannot be brushed aside by the authorities.
8. The contention of the respondents is rejected and the impugned order set aside. The assessment shall be framed after affording adequate opportunity to the petitioner in line with the following directions. Learned counsel for the petitioner would submit that there are additional written submissions to be made and seeks liberty to file additional written submissions, for which, learned Senior Standing Counsel does not express any objection.
9. Hence, the petitioner is permitted to upload its written submissions along with any other supporting materials, if any, within a period of four (4) weeks from date of receipt of a copy of this order. Upon receipt of the additional written submissions and materials, if any, a link for personal hearing shall be sent to the petitioner, the petitioner heard and orders passed within a period of four (4) weeks from date of conclusion of personal hearing. For the aforesaid purpose, the respondent shall open the portal forthwith for a period of four (4) weeks, so as to enable the petitioner to file its additional written submissions to the show cause notice.
7 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
10. Impugned order dated 22.04.2021 stands set aside and this Writ Petition allowed. No costs. Connected Miscellaneous Petitions are closed. W.P.Nos.12809 of 2021 & 9818 of 2022:
11. Heard Mr.R.Venkatanarayanan, learned counsel for the petitioner and Mrs.Hema Muralikrishnan, learned Senior Standing Counsel for the respondent.
12. The impugned assessments dated 24.04.2021 and 17.03.2022 framed in terms of the Income tax Act 1961, have been finalised in the present matter without taking note of the request of the petitioner for a short accommodation. The explanation set forth in the counter is that the request of the assessee, though admittedly uploaded, was in transit and had not yet been received by the Assessing Officer for necessary action.
13. In this connection, it is brought to my notice that all returns of income filed by assessee’s along with accompanying documents are received by the Centralized Assessment Unit and the same are forwarded to the respective regional units in line with the scheme of assessment now prevalent.
14. In the present case, though the request of the petitioner for an adjournment has been received by the Centralised Assessment Unit, the same 8 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch has not been transferred to the regional assessment unit and hence admittedly, no opportunity of personal hearing has been granted to the assessee prior to the framing of the assessee, which is in violation of principles of natural justice.
15. Learned counsel for the petitioner would submit that there are additional written submissions to be made and seeks liberty to file additional written submissions, for which, learned Standing Counsel does not express any objection. Hence, the petitioner is permitted to upload its written submissions along with any other materials, if any, within a period of four (4) weeks from date of receipt of a copy of this order.
16. Upon receipt of the additional written submissions and materials, if any, a link for personal hearing shall be sent to the petitioner, the petitioner heard and orders passed within a period of four (4) weeks from date of conclusion of personal hearing. For the aforesaid purpose, the respondent shall open the portal for a period of four (4) weeks from date of receipt of this order, so as to enable the petitioner to file its additional written submissions to the show cause notice.
17. Impugned order dated 24.04.2021 stands set aside and W.P.No.12809 of 2021 allowed. In light of the aforesaid order, order dated 9 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch 17.03.2022 levying penalty as a consequence of assessment dated 24.04.2021, and challenged in W.P.No.9818 of 2022, is also liable to be set aside and I do so. Accordingly, W.P.No.9818 of 2022 is also allowed. Needless to say that proceedings for initiation/levy of penalty are left at large, to be addressed by the officer at the relevant point in time, in accordance with law. No costs. Connected Miscellaneous Petitions are closed.
W.P.No.12875 of 2021:
18. Heard Mr.B.Kumar, learned Senior Counsel appearing for Mr.S.Ramachandran, learned counsel on record for the petitioner and Mrs.Hema Muralikrishnan, learned Senior Standing Counsel for the respondent.
19. The challenge is to order dated 20.04.2021 passed under the provisions of the Income Tax Act, 1961. The main ground agitated is one of violation of principles of natural justice. A show cause notice dated 17.04.2021 has been issued granting the petitioner only a days' time to file its reply.
20. Since the notice was received on a Saturday, it was not noticed by the petitioner till the office resumed on Monday, i.e., 19.04.2021. Immediately thereafter, a request was made seeking a short accommodation. However, the 10 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch impugned assessment order has come to be passed on 20.04.2021, pending such request. These facts are not in dispute and hence impugned order of assessment dated 20.04.2021, passed in such haste without affording any opportunity whatsoever to the assessee, is set aside.
21. Hence, the petitioner is permitted to upload its written submissions along with any other materials, if any, within a period of four (4) weeks from date of receipt of a copy of this order. Upon receipt of the additional written submissions and materials, if any, a link for personal hearing shall be sent to the petitioner, the petitioner heard and orders passed within a period of four (4) weeks from date of conclusion of personal hearing.
22. For the aforesaid purpose, the respondent shall open the portal forthwith upon receipt of this order, for a period of four (4) weeks, so as to enable the petitioner to upload its reply to the show cause notice along with accompanying materials, if any.
23. With the above directions, this Writ Petition is allowed. No costs. Connected Miscellaneous Petitions are closed.
W.P.No.12994 of 2021:
11
https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
24. Heard Mr.SP.Chidambaram, learned counsel for the petitioner and Mr.ANR.Jayaprathap, learned Junior Standing Counsel for the respondents. The challenge is to order dated 25.05.2021 passed under the provisions of the Income Tax Act, 1961. The procedural irregularity that has been pointed out as far as the present assessment is concerned, is lack of opportunity of personal hearing prior to the framing of assessment, despite a specific request having been made in the written submissions filed by the petitioner in response to the show cause notice issued.
25. Mr.Jayaprathap objects, primarily on the ground that the link provided in the website for personal hearing through video conference, has not been activated by the petitioner. As already held in several matters, if the petitioner has expressly made a request for personal hearing, it would have to be honoured by the Department irrespective of whether the petitioner has activated the dedicated link or otherwise. That apart, the respondent does not dispute the position that the petitioner has, indeed, sought an opportunity of personal hearing. Hence the objection raised is rejected as being hyper- technical and contrary to law and the impugned assessment set aside for the violation of principles of natural justice.
12 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
26. Learned counsel for the petitioner would submit that there are additional written submissions to be made and seeks liberty to file additional written submissions, for which, learned Standing Counsel does not express any objection. Hence, the petitioner is permitted to upload its written submissions along with any other materials, if any, within a period of four (4) weeks from date of receipt of a copy of this order.
27. Upon receipt of the additional written submissions and materials, if any, a link for personal hearing shall be sent to the petitioner, the petitioner heard and orders passed within a period of four (4) weeks from date of conclusion of personal hearing. For the aforesaid purpose, the respondent shall open the portal forthwith, upon receipt of a copy of this order, for a period of four (4) weeks, so as to enable the petitioner to file its additional written submissions to the show cause notice.
28. Impugned order dated 25.05.2021 stands set aside and this Writ Petition allowed. No costs. Connected Miscellaneous Petitions are closed. W.P.No.13314 of 2021:
29. The challenge is to order of assessment dated 15.04.2021 for assess- ment year 2021-22 passed in terms of the Income Tax Act, 1961 (in short 13 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch Act'). The Assessing Authority has issued a notice to show cause on 10.04.2021, and, admittedly, the petitioner had sought an accommodation for filing of his response to the show cause notice, citing the difficulty of interven- ing holidays.
30. This accommodation has neither been granted nor expressly rejected. So there is some merit in the challenge to the order on the ground of violation of principles of natural justice. Learned Standing counsel would point out that has been no response to the communications/notices sent earlier. However, this may, by itself, not justify the non-response of the respondent to the request of the petitioner for an adjournment.
31. Proper procedure demands that whatsoever may the conduct of an assessee on the prior occasions, the request of the assessee for an adjournment ought to have been either expressly rejected, or acceded to, and the assessee duly informed of either decision taken by the authority.
32. This having not been done in the matter, the impugned order of as- sessment has to go and is set aside. The website will be enabled for a period of four weeks from date of receipt of this order by the respondents to provide an opportunity to the petitioner to upload its detailed reply to the notice. Upon re- ceipt of the reply, a link of personal hearing shall be sent to the petitioner, the 14 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch petitioner heard and orders of assessment passed within four weeks from date of personal hearing.
33. This writ petition is allowed in the above terms. Connected miscella- neous petitions are closed. No costs.
W.P.No.13025 of 2021
34. The petitioner assails order of assessment dated 17.05.2021 passed in terms of the E-Assessment Scheme, 2019. The procedural flaw that is al- leged in this case is that the time afforded for compliance with the show cause notice was insufficient. In fact, the petitioner has raised this issue even in its re- ply to the notice dated 24.04.2021.
35. The notice is dated 23.04.2021 and contains a detailed analysis of the return filed by the petitioner, calling for various particulars in regard to the demand arising therefrom. The petitioner has been granted only one day i.e. till 23:59 of 24.04.2021 to file a response, which is clearly inadequate.
36. Thus, the request of the petitioner ought to have been considered and proper opportunity afforded to the petitioner instead of which the officer has simply proceeded to pass the impugned assessment order completely ignoring the same.
15 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
37. Learned Senior Standing Counsel points out that the affidavit filed in support of the writ petition indicates that the petitioner might also have ex- plored statutory appellate remedy. Learned counsel for the petitioner is unable to immediately confirm this position. It is thus made clear that if at all appellate remedy has been availed, the directions to follow would be deemed never to have been issued and this writ petition would be deemed to have been dis- missed in limine. Subject to the aforesaid, the following directions are issued:
(i) The impugned order of assessment is set aside in violation of the principles of natural justice.
(ii) The website will be enabled for a period of six weeks from date of receipt of this order, to enable the petitioner to upload its detailed reply to the notices and the proposals contained in the draft assessment.
(iii) Upon receipt of the reply, a link of personal hearing shall be issued to the petitioner, the petitioner heard and orders of assessment passed within four weeks from date of personal hearing.
38. This writ petition is allowed. Connected miscellaneous petitions are closed. No costs.
W.P.No.13425 of 2021 16 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
39.Heard Mr.R.Swarnavel, learned counsel for the petitioner and Mrs. Hema Muralikrishnan, learned Senior Standing Counsel for the respondents.
40. The only ground on procedural violation relates to whether the peti- tioner has been heard in person or not and admitted answer in this regard is that the petitioner has not been so heard.
41. The defence of the respondents is that the link available in the web- site for personal hearing has not been activated by the petitioner. However, seeing as the petitioner has made a specific request for personal hearing in its submission dated 07.05.2021, it is incumbent upon the respondents to have heard the petitioner. That apart, the petitioner would also argue that there was no link available in the website as projected by the respondents. Be that as it may, the officers must, particularly when a request is made in this regard, hear the assessees prior to framing of the assessments.
42. Let a link be sent to the petitioner within four (4) of issuance of this order, and orders of assessment passed, after hearing the petitioner and taking into consideration reply dated 10.03.2021, within four weeks from date of per- sonal hearing.
17 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
43. This writ petition is allowed. Connected miscellaneous petitions are closed. No costs.
W.P.No.13232 of 2021 :
44.The challenge is to an order of assessment dated 20.05.2021 for as- sessment year 2018-19 passed in terms of the Income Tax Act, 1961 (in short Act').
45. Admittedly, the petitioner had sought an accommodation for filing of his response to the show cause notice dated 13.06.2021 citing the difficulty on account of lockdown as well as bereavement of father of one of the directors on account of Covid-19.
46. This request for accommodation has neither been granted nor ex- pressly rejected. So there is some merit in the challenge to the order on the ground of violation of principles of natural justice.
47. Learned Senior Standing Counsel only points out that though there may be an inherent flaw by virtue of non-adherence to the principles of natural justice, it is not as though the petitioner has been left high and dry as sufficient opportunity had been granted to the petitioner to respond on several earlier oc- casions but the petitioner has not availed of such opportunity. 18 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
48. This may be so. However, since the Assessing Authority has issued show cause on 13.06.2021, and had also admittedly received an adjournment letter, procedure demands that whatsoever may the conduct of an assessee on the prior occasions, the request of the assessee for an adjournment ought to have been either expressly rejected or acceded to, and the assessee duly in- formed of the decision of the authority in this regard.
49. This having not been done in the matter, the impugned order of as- sessment has to go and is set aside. The website will be enabled for a period of four weeks from date of receipt of this order to enable the petitioner to upload its detailed reply to the notices. Upon receipt of the reply, a link of personal hearing shall be issued to the petitioner, the petitioner heard and orders of as- sessment passed within four weeks from date of personal hearing.
50. This writ petition is allowed. Connected miscellaneous petitions are closed. No costs.
W.P.No.13069 of 2021:
51.Heard Mr.A.S.Sriraman, learned counsel for the petitioner and Mrs. Hema Muralikrishnan, learned Senior Standing Counsel for the respondents. 19 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
52. The procedure followed in this matter is also found to be wholly in- adequate, incorrect and in violation of the e-assessment scheme. The flaw com- mences from the stage of seeking personal hearing. Though the petitioner was sent a link of personal hearing under communication dated 21.04.2021 fixing the hearing on 26.04.2021, the hearing stood adjourned at the instance of the revenue to 28.04.2021. On 28.04.2021, the petitioner submits that though it had duly logged in, it was made to wait inordinately, as no officer attended the hearing.
53. An e-mail has been sent by the petitioner to the respondents on 27.04.2021 expressing complete confusion in the conduct of the e-proceedings. The e-mail was sent by the Auditor who stated that he had travelled from Chennai to Vellore to join the video conference and even the officers of the Department in Vellore could not shed any light on the issue. Thereafter a no- tice has been issued on 06.05.2021 that makes no reference whatsoever to the aborted personal hearing and only calls for certain particulars. Relevance of this communication is entirely unknown. The impugned assessment order fol- lows on the heels of the aforesaid proceedings.
20 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch
54. To my mind, there has been a gross violation of the principles of nat- ural justice insofar as a personal hearing has not been conducted as promised and as required. The impugned order is thus set aside.
55. Let the website be enabled for a period of six weeks from date of re- ceipt of this order to provide an opportunity to the petitioner to upload its re- sponse and supporting documents. Thereafter a link of personal hearing shall be issued to the petitioner, the petitioner heard and orders of assessment passed within four weeks from date of personal hearing.
56. This writ petition is allowed. Connected miscellaneous petitions are closed. No costs.
28.06.2022 Index : Yes Speaking Order Sl/ska To
1. Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income Tax Officer, National e-Assessment Centre, Delhi.
2. Assistant Commissioner of Income-tax, Corporate Circle 3(2), Wanaparthy Block – Aayakar Bhawan, Nungambakkam, Chennai.
3. Chief Commissioner of Income Tax,National e-Assessment Centre, Delhi. 21 https://www.mhc.tn.gov.in/judis W.P.Nos.12760 of 2021 etc. batch Dr.ANITA SUMANTH,J.
Sl/ska W.P.No.12760 of 2021 & WMP Nos.13557 and 13558 of 2021 and WMP No.24063 of 2021 andW.P.Nos.12809 of 2021 & 9818 of 2022 WMP Nos.13602, 13603, 19359 of 2021 9536 and 9537 of 2022 AndW.P.No.12875 of 2021 & WMP.Nos.13682 and 13683 of 2021 AndW.P.No.12994 of 2021 & WMP Nos.13799 and 13802 of 2021 AndW.P.No.13314 of 2021 & WMP.No.17875, 14137 & 14138 of 2021 AndW.P.No.13025 of 2021 & WMP.No.13535 & 13833 of 2021 AndW.P.No.13425 of 2021 & WMP.No.14289 & 14291 of 2021 And W.P.No.13232 of 2021 & WMP.No.14034 & 14033 of 2021 AndW.P.No.13069 of 2021 & WMP.No.13873 & 13876 of 2021 28.06.2022 22 https://www.mhc.tn.gov.in/judis