HOME STONE, vs. THE INCOME TAX OFFICER,

WP(C)/14374/2023HC KeralaKLHC01031219202306 June 2023Author: HONOURABLE MR.JUSTICE C.S.DIAS5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that Exts.P5 and P6 are liable to be set aside. The Court noted the submission of the learned Standing Counsel for the respondent, who conceded that the respondent had not considered the reply and documents filed by the petitioner. The Court found merit in the petitioner's contention that the principles of natural justice were violated. Therefore, the Court set aside Exts.P5 and P6. The respondent was directed to consider and finalize the notice issued under Section 148(1) (referring to Ext.P1 notice, though the section cited in the facts was 148(b)) after considering the objections raised by the petitioner along with the documents, in accordance with law, and to do so expeditiously, at any rate, within three months from the date of receipt of a certified copy of the judgment. No issue was expressly left undecided.

What were the facts?

The petitioner, Home Stone, represented by its Managing Partner, filed a writ petition challenging an order (Ext.P5) and a notice (Ext.P6) passed by the respondent, the Income Tax Officer, Ward No 2, Tirur. The petitioner had received a show cause notice under Section 148(b) of the Income Tax Act. The petitioner requested an extension of time to file a detailed reply, which was granted until April 5, 2023. Subsequently, the petitioner submitted its reply along with ten documents. However, the petitioner alleges that the respondent passed the impugned order and issued the notice without considering the submitted reply and documents, thereby violating principles of natural justice.

What were the issues?

1. Whether Ext.P5 order and Ext.P6 notice are liable to be quashed for being passed in violation of the principles of natural justice and being arbitrary and capricious, as contended by the petitioner? Assessee's contentions: The petitioner argued that the respondent passed Ext.P5 order and issued Ext.P6 notice without considering the reply and documents submitted by the petitioner in response to the show cause notice issued under Section 148(b) of the Income Tax Act. This failure to consider the petitioner's submissions, it was argued, amounted to a violation of the principles of natural justice and rendered the impugned actions arbitrary and capricious. Revenue's contentions: The learned Standing Counsel for the respondent conceded that the respondent had not considered the reply and documents filed by the petitioner. Therefore, the respondent submitted that Exts.P5 and P6 could be set aside, with a direction to the respondent to reconsider the matter afresh.

Which sections of the Income-tax Act were involved?

Section 148(b)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS TUESDAY, THE 6TH DAY OF JUNE 2023 / 16TH JYAISHTA, 1945 WP(C) NO. 14374 OF 2023 PETITIONER: HOME STONE, 22/684 OF MOONIYUR GRAMA PANCHAYAT, THAZHE CHELARI, VELIMUKKU POST, MALAPPURAM DISTRICT, KERALA, INDIA -676317 REPRESENTED BY ITS MANAGING PARTNER MUHAMMED INSAMUL HAQUE T.K, S/O. HASSANKUTTY, AGED 31 YEARS 'THEERAM', PAINGOTTUR, CALICUT UNIVERSITY POST, MALAPPURAM DISTRICT-, PIN - 673635 BY ADV K.M.FIROZ RESPONDENT: THE INCOME TAX OFFICER, OFFICE OF THE INCOME TAX OFFICER, WARD NO 2, TIRUR, INCOME TAX OFFICE, NO 20/1240. TARIFF BAZAR, TOWN HALL ROAD, TIRUR, KERALA, PIN - 676101 BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.14374 of 2023 2 JUDGMENT Dated this the 6th day of June, 2023 The writ petition is filed to quash Exts.P5 order and P6 notice passed by the respondent. 2. The petitioner's case is that pursuant to Ext.P1 show cause notice issued under Section 148(b) of the Income Tax Act, the petitioner has submitted a reply seeking enlargement of time to submit a detailed reply. The respondent issued Ext.P2 communication granting time to the petitioner till 05.04.2023, which is evident by Ext.P3. The petitioner submitted its reply along with ten documents as can be seen from Ext.P4 proceedings. However, the respondent, without adverting to the reply and the documents submitted by the petitioner, has passed Ext.P5 order and thereafter issued Ext.P6 consequential notice. Exts.P5 and P6 are passed in violation of the principles of natural justice and is arbitrary and WPC No.14374 of 2023 3 capricious. Hence, the writ petition. 3. Heard; Sri.K.M Firoz, the learned Counsel appearing for the petitioner and Sri.Christopher Abraham, the learned Standing Counsel appearing for the respondent. 4. Sri.K.M Firoz, reiterated the contentions in the writ petition. 5. Learned Standing Counsel appearing for the respondent submitted that as the respondent has not considered the reply as well as the documents filed by the petitioner, Exts.P5 and P6 can be set aside, directing the respondent to reconsider the matter a fresh. 6. Having considered the pleadings and materials on record and taking note of the fact that the respondent has not considered the reply as well as the documents produced by the petitioner, I deem it appropriate to dispose of the writ petition in the following manner: (i) Exts.P5 and P6 are set aside. WPC No.14374 of 2023 4 (ii) The respondent is directed to consider and finalize Ext.P1 notice after adverting to the objections raised by the petitioner along with the documents, in accordance with law, as expeditiously as possible at any rate within a period of three months from the date of

receipt of a certified copy of this judgment. C. S. DIAS JUDGE AP/06-06

WPC No.14374 of 2023 5 APPENDIX OF WP(C) 14374/2023 PETITIONER EXHIBITS Exhibit P1 AOF SHOW CAUSE NOTICE DATED 18- 3-2023 ISSUED BY THE RESPONDENT TO THE PETITIONER UNDER SECTION 148A(B) OF THE INCOME TAX ACT Exhibit P2 AOF THE COMMUNICATION DATED 29- 3-2023 ISSUED BY THE RESPONDENT GRANTING EXTENSION OF TIME TO THE PETITIONER TILL 5- 4-2023 Exhibit P3 AOF THE REPLY / RESPONSE DATED 5-4-2023 SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT Exhibit P4 AOF THE ONLINE GENERATED E- PROCEEDINGS RESPONSE ACKNOWLEDGEMENT ACKNOWLEDGING THE RECEIPT OF THE RESPONSE SUBMITTED ON 5-4-2023 (ALONG WITH VIEW RESPONSE TO NOTICE) Exhibit P5 AOF THE ORDER DATED 10-4-2023 ISSUED UNDER SECTION 148A(D) OF THE INCOME TAX ACT BY THE RESPONDENT Exhibit P6 AOF THE NOTICE UNDER SECTION 148 OF INCOME TAX ACT, 1961 DATED 10-4-2023 ISSUED BY THE RESPONDENTP.A.TO JUDGE

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