Infor (India) Private Limited vs. Additional / Joint / Deputy / Assistant Commissioner of Income Tax / Income-tax Officer

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WP/27596/2021HC TelanganaHBHC01044041202117 June 2022Author: SUREPALLI NANDA,UJJAL BHUYAN7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that there was a consensus between the parties that the impugned assessment order dated October 7, 2021, and the consequential demand notice dated October 7, 2021, should be set aside and the matter remanded back to the assessing officer. This consensus was based on the non-compliance of the procedure laid down under Sections 144B and 144C of the Income Tax Act, 1961. Consequently, the Court set aside the assessment order and the demand notice. The matter was remanded back to the first respondent (National Faceless Assessment Centre) for passing a fresh assessment order in accordance with the law, after affording the petitioner due opportunity of hearing. The Court also directed that the Dispute Resolution Panel may issue necessary directions within six months from the date of receipt of the order. The writ petition was disposed of without costs.

What were the facts?

The petitioner, Infor (India) Private Limited, filed a writ petition challenging an assessment order dated October 7, 2021, passed by the National Faceless Assessment Centre, Delhi, under Section 143(3) read with Sections 144C(3) and 144B of the Income Tax Act, 1961, for Assessment Year 2018-19. The assessment order enhanced the returned income from Rs. 49,36,15,990.00 to Rs. 103,55,94,435.00. The petitioner's grievance was that the faceless assessment was made in contravention of Section 144B of the Act, specifically alleging that the draft assessment order was not served, and the final order was passed despite objections filed before the Dispute Resolution Panel. The petition also challenged the consequential demand notice and a notice for penalty under Section 270A.

What were the issues?

1. Whether the assessment order dated October 7, 2021, passed by the National Faceless Assessment Centre, Delhi, under Section 143(3) read with Sections 144C(3) and 144B of the Income Tax Act, 1961, is illegal and invalid due to non-compliance with the procedural requirements of Section 144B of the Act, specifically the non-service of the draft assessment order and the passing of the final order despite objections filed before the Dispute Resolution Panel. Assessee's Contention: The assessment order is non-est due to the violation of mandatory procedures prescribed under Section 144B(1)(xvi)(b), (xxv)(a)(A), (xxx), and (x-xxi) of the Act, as the draft assessment order was not served, and the final order was passed despite pending objections before the Dispute Resolution Panel. The procedure under Section 144B must be strictly complied with. Revenue's Contention: The revenue, through its counsel, stated that it was not discernible from the impugned order whether the procedures were complied with and sought time to file an affidavit. Subsequently, it was submitted that the assessing officer could not consider the objections raised by the petitioner before the Dispute Resolution Panel as they were not placed before the assessing officer.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 144C,Section 156,Section 270A,Section 274

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT FOR THE STATE OF TELANGANA AT HYOERABAD (SPecial Original Jurisdiction) FRIDAY, THE SEVENTEENTH DAY OF JUNE TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITIONNO;27596 oF 2021 Between: lnfor (lndia) Private Limlted, Tower 10' The.Sky View' 7th Floor' Sy No'83/1 ' Madhapur, Raidurg virrag6l'sliiriigamp'riv rt4gngqL Ringa Reddv' Hvderabad' i;;il;;; s'oooarh"pr"iJntJov i6oii:ecior' Mr' Mohan Rao Banala' ...PETITIONER AND 1. Additional / Joint / Deputy / Assistant Commissioner of lncome Tax / lncome- ' i; o'ili";;, r.riiionur -ia.6t".Jnt"essment centre' Delhi/' 2. Deputy Commissioner of lncome Tax' Circle 2(1)' Signature Towers' Opposite Botanical Gardens, ib"O'p'i, Hyderabad' Telbngana 500084' 3. Principal Commissioner of lncome-tax.- 2' Signature Towers' Opposite - a;ia-nlc;r Gardens, xonoipur., Hyderabad' Telangana 500084' ...RESPONDENTS PetitionUnderArticle226oftheConstitutionoflndiaprayingthatinthe circumstancesStatedintne_attioavitfiledtherewith,theHighCourtmaybe pleased to issue a writ oi'JrOei Lipeciaf fV in. the nature of writ of certiorari (i) lu"Jsning'-the oroer oatea o]llolzozt bearing no. ITBA/ASTlsl143(3\12o21- 2211036220359(t) (nnnexur"-i+) patseO Oy-the- tst Respondent unde.r^Section 143(3) read with Sections llqC(Zl and 14iB of the lncome-tax Act' 1961 (the Act) (ii)quashing the Jemand' 'notice bearing no' ITBA/AST/S/1 5612021- 22t1036220413(1) oateJ oi.lozozt (Annexure-P5) issued by tl" '1 st n""p"ra""t unier Section 156 of the Act (iii) quashing the, notice bearing no' tTBA/pNL/S/2 7 oAtzo2l -;21 liiaizo'rct() biteo oz.l o'2021 (Annexure- P6) issued by the 1st nu"ponO"ni under Seciion 274 read with section 270A of the Act. Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to (i) stay the operation of the order dated 07.10.2021 bearing No. ITBA/AST/S/143 (3)12021- 2211036220359(1), (AnnexureP4) issued by the 1st Respondent under section 143(3) read .with sections 144C(3) and 1448 of the lncome Tax Act till the disposal of this petition (ii) stay the operation of demand notice bearing No. ITBA/AST/S/1 5612021- 2211036220413(1), dated 07 .10.2021 (Annexure P5) issued by the 1st Respondent under Section '1 56 of the Act till the disposal of this petition (iii) stay the operation of notice bearing No. ITBA/PNLlSl27AAl2021- 2211036220461(1), dated 07.10.2021 (Annexure P6) issued by the l"tRespondent under section 274 rcad with section 270A ol the Act till the d isposal of this petition. Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay of the proceedings pending before the Dispute Resolution Panel, Pending disposal of the above writ petition, in the interests of justice and equity. Counsel for the Petitioner : SRI.T.SURYANARAYANA, ADV FOR SRI.K.RAGHAVENDRA RAO Counsel for the Respondents : Ms.K.MAMATA CHOUDARY The Court made the following OROER l.A.NO:1 OF 2021 |.A.NO:2 OF 2022 THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA

ORDER: (Per Hon'ble Sri Justice Ujjal Bhuyan) Heard Mr. T.Suryanarayana, learned Senior Counsel appearing on behalf of Mr. K.Raghavendra Rao, learned counsel for the petitioner and Ms. K'Mamata Choudary, learned Standing Counsel for Income Tax Department for the respondents.

2.

On 05.1I.2021, we had passed the following order: "This petition under Article 226 of the Constitutiorl of India challenges legality and validity of the Assessment Order dated 07.10.2021 passed by National Faceless Assessment Center, Delhi i.e., respondent No.1 under Section 143(3) of the Income Tax Act, 1961 (briefly'the Act' hereunder) read with Section 144C(3) and Section 1448 of the said Act for the Assessment Year 2018-19, enhancing the returned income of the petitioner from Rs.49,36,15,990.00 to Rs. 103,55,94,435.00 by making several additions. Grievance of the petitioner is that the said Faceless Assessment was made by respondent No.l in ) WRIT PETITION No.27596 of 2O21

LBJ&S,V,J W.P.No.27596 of 202 1 contravenlion of the provisions contained in Section laaB(l)(xvi)(b), (xxv)(a)(A), (xxx) alrd (x-xxi) of the Act, inasmuch as the initial dra-ft assessment order was not served upon the petitioner and the final assessment order was passed, despite tl.e petitioner frling objection before the Dispute Resolution Panel. Referring to Sub-section (9) of Section 144B of the Act, learned counsel submits that the procedure prescribed under Section 1448 of the Act, providing for Faceless Assessment, have to be strictly complied with, failing which an assessment order shall be nonest. Ms.Mamatha, learned Senior Standing Counsel for Income Tax Department, submits that from the impugned order of assessment, it is not discernible whether the above procedures were complied with or not. She prays for time to obtain instructions and to file affidavit. Issue notice. Learned Senior Standing Counsel waives notice for all the respondents. Respondents sha,ll file their counter-afhdavit by the next date. In the mearwhile, respondents are dirccted not to take any coercive steps foliowing the Assessment Order dated 07.10.2021, for the assessment year 2018- 19."

3.

Though counter affidavit has not been filed by the respondents, nonetheless Ms. K'Mamata Choudary, learned counsel submits on the basis of written instructions. 2 \

UB,J&SN'J W.P.No.27596 of 2021 Ms. K.Mamata Choudary has explained in her submission that assessing officer could not consider the objections raised by the petitioner before the Dispute Resolution Panel as those \\rere not placed before the assessing officer'

4.

There is a consensus at the Bar that in view of non-compliance of the procedure laid down under Sections 1448 and l44C of the Income Tax Act' 1961 (briefly referred to hereinafter as the Act'), the impugned assessment order dated 07.10.202 1 passed by the l"t respondent and the consequential demand notice dated 07 'lO '2021 should be set aside and the matter remanded back to the assessing officer i.e., 1"t respondent after the Dispute Resolution Panel issues the directions under the aforesaid provision'

5.

Consequently order dated 07'10'2021 and the consequential notice of demand dated 07'10'2021 are hereby set aside. Matter is remanded back to the l"t respondent for passing fresh order of assessment in accordance with 1aw after affordigg due opportunity of hearing to the petitioner' 3

UB, J c\ SN, J W.P.No.27596 of 2 021

6.

Be it stated that the Dispute Resolution panel may issue the necessary directions in accordan ce with law within a period of six (O6) months from the date of receipt of a copy of this order.

7.

This disposes of the Writ petition. Ho."vever, there shail be no order as to costs.

8.

As a sequel, miscellaneous applications pending, if any, in this Writ petition, shall stand closed. 4 \' ,// SD/.B.SATYAVATHI DEPUTY REGISTRAR SECTION OFFICER 'o ,1. ,n" Additional / Joint / Deputy / Assistant Commissioner of lncome Tax / ' iffiffi:i;; officlt, m,tLtiar Faceless Assessment Centre' Delhi'

2.

The Deputv commissloie'*;i 1"6;; Tax' Circle 2(1) Siqnature Towers oooosite Botanical G';;ffi;' K;;ti;;"' tivaerabad telingana 500084 " ;d$;;;;l C";.i;i";;;' ;i I ; ;;;;-i'f - 2' s i g n atu re^ r^owers' o p po site " ;'JIr;iJ;i'Hd;;,' i;;; ;p'i, Hvderabad'.reIansa na 500084' 4. 6;;'ic i;s nr. r<. nnE inriE r't o ne RA.o' Advocate J-oIW ;. 6;; d6 i; M.'.k.MAvrAin cHouoARY, Advocate [oPUc]

6.

Two CD CoPies

7.

One spare coPY S.A BS

, HIGH COURT DATED:1710612022 ORDER WP.No.27596 ot 2021 DISPOSING OF THE W.P WITHOUT COSTS. 1Y\E STA I r.- ,Y i r-) a-' 2 3 Jl]L 202? .* :-.: ./.L0, 4

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