DR. THOMAS ANTONY vs. THE ASSESSING OFFICER

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL TUESDAY, THE 09TH DAY OF JUNE 2020 / 19TH JYAISHTA, 1942 WP(C).No.11252 OF 2020(F) PETITIONER/S: DR. THOMAS ANTONY 35/5226, KANCHAI HOUSE, SKYLINE IRIS GARDEN, HOUSE NO. 2, AVENUE ROAD, MISSION QUARTERS, MUNDUPALAM, THRISSUR 680 006. BY ADVS. SRI.ANIL D. NAIR SRI.R.SREEJITH SHRI.GOKULRAJ L. SMT.SRI HARINI S.P. RESPONDENT/S: THE ASSESSING OFFICER OFFICE OF THE INCOME TAX OFFICER,WARD -2(1) THRISSUR 680 001. OTHER PRESENT: SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.11252 OF 2020(F) 2 JUDGMENT Dated this the 9th day of June 2020 Through the instant writ petition the petitioner, a doctor by profession, sought indulgence of this Court by quashing order Ext.P5 dated 11.05.2020 of Income Tax Officer, Ward-2(1), Thrissur. In support of the aforementioned prayer, it has been pleaded that the petitioner, for the assessment year 2017-18, filed an income tax return under Section 139(1) of the Income Tax Act, 1961 (in short, 'the Act'). However, the aforementioned income tax return was replied with a notice under Section 148(1) of the Act vide communication dated 30.12.2019 Ext.P1. The aforementioned order was challenged in this Court vide W.P.(C) No.1900 of 2020, disposed of vide judgment dated 05.02.2020 Ext.P3, whereby certain directions were issued. 2. Sri.Anil D.Nair, learned counsel appearing on behalf of the petitioner submits that the question involved in this writ petition revolves around the following legal points: i) Provisions of Section 151 (1) and (2) enjoined an obligation upon the assessing officer before initiating the

WP(C).No.11252 OF 2020(F) 3 procedure expired under Section 148 to obtain from the Joint Commissioner a sanction with satisfaction on the reasons recorded for issuance of such notice. ii) Respondent authority reopened the assessment under Section 148 of the Act without recording any reasons or satisfactions or putting any date much less there was no adherence to the directions contained in the order dated 05.02.2020 as no opportunity of hearing. As regards the reductions, no indulgence has been given by the assessing officer by dealing with the objections while initiation of the proceedings under Section 148 of the Act. 3. There is no date when the Joint Commissioner gave sanction, which is a requirement of law, as per the judgment of Delhi High Court in Sabh Infrastructure Ltd., V. Assistant Commissioner of Income Tax (2017) 398 ITR 198. While disposing of the objections there is inadvertence of affording opportunity of hearing. Even the counter do not reflect any affording of opportunity but the entire stress has been laid post the passing of the order Ext.P5 which was not the issue involved in the previous writ petition and the directions contained in the order dated 05.02.2020. 4. Mr. Jose Joseph relies upon the contents of paragraph

WP(C).No.11252 OF 2020(F) 4 Nos.2 to 6 of the counter affidavit and alleges that in compliance of the order of the High Court reasons for reopening the assessment was communicated to the assessee on 30.12.2019 and there were no fresh grounds or reasons proposed by the assessing officer to reopen the assessment, thus nothing new was required to be communicated to the assessee other than what was already communicated. Assessee, on 19th March 2020, submitted objections. The adjudicating authority before passing a speaking order has dealt with the entire objections. Therefore, the order under challenge cannot be said to be illegal or there is any perversity or issued without jurisdiction. Sufficient opportunity of hearing would be given to the petitioner after the lock down period is over while conducting the assessment proceedings. It is absolutely absurd to say that the reasons recorded do not mention any date where the date is 22.03.2019 and on the same date, the Joint Commissioner communicated to the Assessing Officer vide Ext.A1 the satisfaction for re-opening of the proceedings under Section 148 and urges this Court for dismissal of the writ petition. 5. I have heard learned counsel for the parties and

WP(C).No.11252 OF 2020(F) 5 appraised the paper books. 6. Section 151(2) mandatorily requires the Joint Commissioner to record reasons in writing and satisfaction to be communicated to the Assessing Officer for initiating the proceedings under Section 148, whereas Section 148(1) on its plain and simple getting, gives no manner of doubt that it is pari materia to the proceedings as provided under Section 139. For the sake of brevity Sections 151(2) and 148(1) of the Act are reproduced herein below:- "Section 151(2) In a case other than a case falling under section 151(1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. Section 148(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 : Provided that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and

WP(C).No.11252 OF 2020(F) 6 (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub- section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." 7. On the joint perusal of the aforementioned provisions, it is evident that before making an assessment/reassessment or re-computation under Section 147, the Assessing Officer shall serve on an assessee a notice requiring him to furnish within such period return of his income or the income of any other person in respect of which he is assessable under the Act during the previous year corresponding to the relevant assessment year

WP(C).No.11252 OF 2020(F) 7 verified in the prescribed manner, setting forth all the particulars and as per the provisions of the Act, and such return was the return furnished under Section 139 of the Act. 8. It is not in dispute that this Court in the order dated 05.02.2020 when Ext.P1 dated 30.12.2019 was challenged, disposed of the writ petition directing the Assessing Officer to give an opportunity of hearing either to representative or counsel, if any, by the Assessment Officer before taking any action. 9. The cumulative reading of the impugned order Ext.P5, no doubt reflects adherence to all the objections raised by the petitioner but the reasoning confines particularly to objections 1 & 2 with regard to the supply of the reasons and whether sanction was duly assigned or appended, has been dealt in a very vague and mechanical manner. The relevant portion of the same as extracted in paragraph 17 of the impugned order reads thus: "17. Therefore, the objections raised by assessee vide letter dt. 10-3-2020 filed on 19-03-2020 (received through tapal on 20-03-2020) do not have any merit and is against the set legal proceedings. The decision of the Hon'ble Supreme Court of India in the case of GKN Drive Shafts (India) Ltd. Vs. ITO & Others reported in 179 CTR (SC)11, 259 ITR 19 (SC) and 125 TAXMAN 963

WP(C).No.11252 OF 2020(F) 8 (SC) squarely applicable in the case of assessee as well. In view of detailed clarification stated as above, the objection raised by assessee against the reopening of income tax assessment of his case for A.Y.2016-17 is hereby rejected." Even the reasons assigned in paragraph Nos.5 & 6 which are also extracted herein below do not reveal that any opportunity of hearing was given to the petitioner as envisaged in the directions. " 5. At the very beginning itself, the primary objection raised by the assessee is being dealt with. The primary objection of the assessee is that the reason recorded by the Assessing Officer for issue of Notice u/s.148 of the Act was not communicated to him. The objection does not hold good as the reasons recorded were provided to the assessee on 30-12-2019 vide letter No.ITBA/AST/F/17/2019-20/10234428397(1). The assessee has then went on a writ petition before the Hon. High Court stating that he was not given the time to raise objection against the reasons that were recorded. The Hon. High Court has also ordered that the assessee is to be given an opportunity to raise objections (if any) against the reasons by the Assessing Officer. Hence, it is clear that the assessee has already been provided with the reasons recorded and opportunity of being heard is to be granted only with regard to any objections that the assessee may rise with regard to the reasons that have already been recorded and communicated to the assessee. 6. The next contention of the assessee is that approval of the competent authority has not been communicated to him. In fact vide letter No.ITBA/AST/F/17/2019-20/10234428397(1), it was communicated to the assessee that the notice u/s 148 of the Act was issued after obtaining the prior approval of the specified competent authority. Here, in this case, the approval for reopening the assessment was granted by the Joint Commissioner of Income Tax, Range-2, Thrissur. However, since the assessee has reiterated his request that approval obtained from the Jt.Commissioner is to be communicated to him in the proforma, the same is enclosed along with this order."

WP(C).No.11252 OF 2020(F) 9 10. The officer at the healm of affairs when directed by this Court are required to follow the orders of this Court by giving due regard and respect. I would be refraining myself further to comment on the impugned order qua aforementioned observation but the fact of the matter is that the petitioner has not been offered any opportunity of hearing before the Order Ext.P5 is passed. Accordingly the order Ext.P5 is not sustainable and is hereby quashed. Matter is remitted to the Assessing Officer, Ward-2(1), Thrissur to take the call on the objections referred to by the petitioner or any additional objections that the petitioner intends to notify, by affording an opportunity of hearing intimating him either speed post, mail or whats app and pass an speaking order thereafter. Let this exercise be undertaken within a period of four months from the date of receipt of a certified copy of the judgment. Thus, this writ petition stands disposed of. Sd/- AMIT RAWAL JUDGE Jm/

WP(C).No.11252 OF 2020(F) 10 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF LETTER DATED 30.12.2019 ISSUED BY THE RESPONDENT FOR THE A.Y 2017-18. EXHIBIT P2 TRUE COPY OF ORDER DATED 30.12.2019 ISSUED BY THE RESPONDENT FOR THE A.Y 2017-18. EXHIBIT P3 TRUE COPY OF JUDGMENT DATED 5.2.2020 IN WPC NO. 1920/2020 FOR THE A.Y 2017-18. EXHIBIT P4 TRUE COPY OF LETTER DATED 10.3.2020 FILED BY THE PETITIONER BEFORE THE RESPONDENT FOR THE A.Y 2017-18. EXHIBIT P5 TRUE COPY OF ORDER DATED 11.5.20202 ISSUED BY THE RESPONDENT FOR THE A.Y. 2017-18.