MANISH DHAWAN vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(2), IT, KOLKATA AND ORS

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WPA/27499/2022HC CalcuttaWBCHCA055382202215 December 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the reassessment proceedings and the order of assessment dated May 23, 2022, were passed in violation of the principles of natural justice. The Court, considering the exceptional circumstances of inadvertent human error by the Chartered Accountant leading to non-receipt of notices, entertained the writ petition despite the order being appealable. The Tribunal directed that the impugned reassessment order dated May 23, 2022, be treated as a draft assessment order. The petitioner was granted two weeks to file a reply or objections to this draft order. Upon receipt, the Assessing Officer was directed to pass a final assessment order within eight weeks, ensuring an opportunity of hearing was provided to the petitioner or his authorized representative before passing the fresh final assessment order. This order was made conditional upon the petitioner depositing 20% of the tax arising from the draft assessment order within one week.

What were the facts?

The petitioner, Manish Dhawan, a non-resident Indian residing in Singapore, challenged an order of assessment dated May 23, 2022, passed under Section 147/144 read with Section 144C of the Income Tax Act, 1961. The petitioner contended that the reassessment proceedings and the order were passed in violation of the principles of natural justice, as he was deprived of any opportunity of hearing. This was attributed to his Chartered Accountant's inadvertent failure to check the official email address recorded with the Income Tax authority for communication. An affidavit from the Chartered Accountant and pleadings in the writ petition explained this oversight. Despite the assessment order being appealable, the Court entertained the writ petition due to these exceptional circumstances.

What were the issues?

1. Whether the reassessment proceedings and the order of assessment dated May 23, 2022, were passed in violation of the principles of natural justice by depriving the petitioner of an opportunity of hearing? (Question of law and fact, concerning Section 147/144 read with Section 144C of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that due to a genuine human error by his Chartered Accountant, who failed to check the official email address, he did not receive any notice or opportunity to be heard during the reassessment proceedings. He relied on the judgment in Biki Overseas (P) Ltd. vs. Union of India (2022) 141 Taxmann.com 20 (Calcutta). Revenue's Contention: The judgment records no specific argument from the respondent Income Tax authority.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
WPA 27499 OF 2022 15.12.2022 Sl no. 23 Manish Dhawan Ct no. 2 - Vs - P.M. Assistant Commissioner of Income Tax, Circle 1(2) & Ors. Mr. J. P. Khaitan, Sr. Adv. Mr. Pratyush Jhunjhunwala, Mr. Indranil Banerjee, Mr. Mrigank Kejriwal … for the petitioner Ms. Smita Das De … for the respondent. Heard Mr. Khaitan, learned senior Counsel representing the petitioner and Ms. Smita Das De, learned advocate representing the respondent Income Tax authority. By this writ petition petitioner has challenged the impugned order of assessment dated 23rd May, 2022, under Section 147/144 read with Section 144C of the Income Tax Act, 1961, on the ground of violation of principle of natural justice being deprived of any opportunity of hearing in course of the impugned re-assessment proceeding and passing of

the aforesaid impugned reassessment order.

Petitioner submits that he is a non-resident Indian and resides in Singapore and he engaged the Chartered Accountant named Sandip Kumar Goyel who due to inadvertence and genuine human error failed to check his e-mail account which was the

2 official address recorded in the office of the Income Tax authority concerned for the purpose of communication and notices to the petitioner.

The said Chartered Accountant has affirmed an affidavit in this regard being annexure P/7 to the petitioner shall give reply/objection to the same within two weeks from date and on receipt of such reply/objection the Assessing Officer concerned shall

3 pass a final assessment order within eight weeks thereof.

Needless to mention that before passing the fresh final assessment order opportunity of hearing shall be given to the petitioner or his authorized representatives.

This order is subject to condition of making deposit of 20% of the tax arising out of the aforesaid impugned assessment order (draft assessment order) within a week from date.

In case of non-compliance of any of the conditions of this order by the petitioner this order will not have any force. With this observation and direction this writ petition being WPA 27499 of 2022 stands disposed of.

(Md. Nizamuddin, J.)

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