Calcutta High Court
Srijan Nirman Pvt. Ltd vs Commissioner Of Income Tax on 3 March, 2015
Author: I. P. Mukerji
Bench: I. P. Mukerji
WP No. 214 of 2015
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Srijan Nirman Pvt. Ltd.
Versus
Commissioner of Income Tax, Kolkata - 3 & Ors.
Before:
The Hon'ble Justice I. P. MUKERJI
Date: 3rd March 2015
Appearance:
Mr. R. N. Bajoria, Sr. Advocate
Mr. Akilesh Gupta, Advocate
Mr. Asim Choudhury, Advocate
for the petitioner
Mrs. Asha Ghutghutia, Advocate
for the respondents
The Court: On 13th March 2010 the registered office of the writ petitioner was shifted from 164, M.G. Road, Kolkata - 700007 to 3, Queens Park, Kolkata - 700019. According to Mr. R. N. Bajoria, learned senior advocate appearing for the writ petitioner, the income tax department had knowledge of this change of address and served notices, processes etc. at this new address, the petitioner having notifying them of such change.
I was shown a request by the writ petitioner for a new PAN Card form dated 10th January 2011 and the response of the Department by their communication dated 31st January 2011 that the change in details mentioned in the form had been processed.
I was also taken through the income tax return of the writ petitioner for the assessment year 2011-2012 disclosing its address at Queens Park and the intimation under section 143(1) of the Income Tax Act dated 13th February 2012 containing the self-same changed address.
Similar documents were shown to me with regard to the assessment year 2012-2013 at pages 106 and 107 of the petition.
2
Now it appears that on 9th April 2010 an assessment order was passed under sections 147/143(3) of the Income Tax Act in respect of the writ petitioner for the assessment year 2008-2009. Thereafter, section 263 proceedings were started by the Department. It was commenced by a show-cause notice dated 1st February 2013. According to the Department, the postal department did not find the existence of the writ petitioner at the address mentioned in the show-cause notice. Neither could the Inspector. Mr. Bajoria submits that this show-cause notice was not received by his client. It was followed by an ex parte order made on 22nd March 2013 setting aside the assessment made on 9th April 2010 and directing the assessing officer to make a fresh inquiry and assessment. This order mentioned the address of the writ petitioner as 164, M.G. Road, Kolkata. It was sought to be served thereat. The above facts regarding service were recorded in this order. There is every reason to believe that the show-cause notice was also sought to be served at 164, M.G. Road. According to the writ petitioner, they did not receive the section 263 order.
This was followed by an assessment order dated 31st March 2014 which assessed the total income of the writ petitioner at Rs.2,05,28,201/-.
This was also supplemented by a penalty order under section 271(1)(c) of the said Act made on 12th September 2014.
Aggrieved by these orders the writ petitioner has preferred an appeal before the Commissioner (Appeals).
The writ petitioner also preferred a stay petition before the assessing officer under section 220(6) of the Income Tax Act, 1961.
At this stage, Mrs. Asha Ghutghutia, learned advocate for the respondents handed over some papers of the Department to me wherefrom it appears that this stay application was disposed of without any order of stay. Learned counsel submitted that this order was made on 10th February 2015 and handed over to the representative of the writ petitioner.
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She cited Golam Momen v. Assistant Commissioner of Income Tax And Others reported in 263 ITR 69, a judgment of our Court to the effect that pendency of an appeal does not bar recovery proceedings under section 226(3) of the Income Tax Act, 1961. She submitted that this decision refers to a host of decisions pronounced by different High Courts of our country and the Supreme Court, entertaining a similar view.
It is also submitted by Mrs. Ghutghutia that the section 263 order was duly received by the writ petitioner on 22nd March 2013, as would appear from a photocopy acknowledgement slip produced in Court. This receipt is disputed by Mr. Bajoria.
In my opinion, in this case the facts are substantially different. The income tax authority by a letter of 7th September 2011 which is at page 115 of the writ petition lauded the writ petitioner for making payment of tax in advance for the financial year 2010-2011. Therefore, it is difficult to form an opinion that the writ petitioner is a type of assessee who tries to evade the process of law, so as to delay its result as long as possible. There is substantial prima facie evidence to suggest that the assessee did change its address to Queens Park from M.G. Road and that the notices of the section 263 proceedings and subsequent assessment proceedings were attempted to be served at the old address which were not received by them. This justification of the writ petitioner for the ex parte proceedings is prima facie accepted.
Therefore, what follows is that the section 263 proceedings, followed by sections 147/143 proceedings were all ex parte against the writ petitioner without having an opportunity of representing their case before the Department.
The section 263 order was passed on 22nd March 2013. According to the above acknowledgement slip, notice under section 263 of the Income Tax Act, 1961 was sought to have been received on 22nd March 2013. Mrs. Ghughutia clarifies this by saying that notice should be read as order. This service is disputed but even if it is true, it does not change the picture. 4
I am also of the view that the officer considering the question of stay of recovery was not posted with these correct facts and did not apply the correct facts and tests to adjudge whether there should be stay of recovery or not. Nevertheless, an appeal is pending before the Commissioner (Appeals). I am firmly of the opinion that in this appeal the writ petitioner should be heard and an appropriate order passed in the presence of its representative.
Furthermore, I give an opportunity to the writ petitioner to make a formal application for a stay before the Commissioner (Appeals), if not already made and apply afresh for stay of the assessment order. The Commissioner (Appeals) will have the option of disposing of the appeal with the stay application or dispose of the stay application independently. If the stay application has not been filed it has to be filed within two weeks from date. The appeal and the stay application or the stay application should be disposed of by the Commissioner (Appeals) within six weeks from date. No unnecessary adjournments should be granted by the Commissioner (Appeals). For a period of eight weeks from date there will be stay of any kind of recovery under the notice dated 13th February 2015 or any other kind of recovery that might be contemplated under section 226(3) of the said Act or any other provision thereof.
Affidavits were not invited. Allegations contained in the writ application are not deemed to be admitted.
This writ application is accordingly disposed of.
Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(I. P. MUKERJI, J.) R. Bose AR(CR)