SAVE A FAMILY PLAN (INDIA) vs. THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS),

WP(C)/1976/2022HC KeralaKLHC01004529202207 June 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.10 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the denial of an opportunity for a hearing to the petitioner at the appeal stage constituted a violation of the principles of natural justice. The Court reasoned that even if the scheme's provisions did not initially mandate a hearing, the rules of natural justice must be read into the scheme, entitling the petitioner to present its case. Furthermore, the Court noted that the scheme itself was later amended to make granting an opportunity of hearing mandatory if sought. Consequently, the appellate orders for assessment years 2013-2014, 2014-2015, and 2015-2016 were quashed. The appeals filed by the petitioner were restored to the file and directed to be disposed of in accordance with law after affording an opportunity of hearing to the petitioner.

What were the facts?

The petitioner, Save A Family Plan (India), faced assessment proceedings for assessment years 2013-2014, 2014-2015, and 2015-2016. The petitioner filed appeals before the appellate authority, but these appeals were disposed of without granting an opportunity for a hearing. This was in line with the National Faceless Appeal Scheme, 2020, which initially made hearings discretionary. The petitioner challenged these orders, arguing that the scheme's provisions regarding hearings were later amended to make them mandatory when sought. The respondents contended that the original orders were valid under the scheme as it existed at the time.

What were the issues?

1. Whether the denial of an opportunity of hearing to the assessee during the appeal proceedings under the National Faceless Appeal Scheme, 2020, as it existed prior to its amendment, violated the principles of natural justice, particularly in light of the subsequent amendment making hearings mandatory if sought? Assessee's Contentions: - The petitioner argued that the provision in the National Faceless Appeal Scheme, 2020, which made hearings discretionary, was challenged in various courts. - The scheme was subsequently amended to make hearings mandatory for assessees if they sought such an opportunity. - The denial of a hearing violated the principles of natural justice. Revenue's Contentions: - The respondents argued that the orders passed were in accordance with the provisions of the scheme as it existed at the time of their issuance. - The learned standing counsel fairly submitted that, as per the amended scheme, hearing is mandatory.

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C) NO. 1734 OF 2022

WP(C).1976/2022

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 7TH DAY OF JUNE 2022 / 17TH JYAISHTA, 1944 WP(C) NO. 1734 OF 2022 PETITIONER: SAVE A FAMILY PLAN (INDIA) AISWARYAGRAM, PARAPPURAM, KANJOOR, ERNAKULAM - 683593, REPRESENTED BY ITS EXECUTIVE DIRECTOR, FR. MARSHEL MELAPPELLY. BY ADVS. JOSEPH MARKOSE (SR.) V.ABRAHAM MARKOS ABRAHAM JOSEPH MARKOS ISAAC THOMAS P.G.CHANDAPILLAI ABRAHAM SHARAD JOSEPH KODANTHARA RESPONDENTS: 1 THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS) CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI - 682018. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) AREECKAL MANSION, PANAMPILLY NAGAR, KOCHI - 682018. 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI - 110001. 4 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX NATIONAL E - ASSESSMENT CENTRE, NEW DELHI - 110001. 5 UNION OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI - 110001, REPRESENTED BY ITS SECRETARY. BY ADV S.VAIDYANATHAN W.P(C).Nos.1734 & 1976 of 2022 2 OTHER PRESENT: SRI. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.06.2022, ALONG WITH WP(C).1976/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).Nos.1734 & 1976 of 2022 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 7TH DAY OF JUNE 2022 / 17TH JYAISHTA, 1944 WP(C) NO. 1976 OF 2022 PETITIONER: SAVE A FAMILY PLAN (INDIA) AISWARYAGRAM, PARAPPURAM, KANJOOR, REPRESENTED BY ITS EXECUTIVE DIRECTOR, FR.MARSHEL MELAPPELLY. BY ADVS. JOSEPH MARKOSE (SR.) V.ABRAHAM MARKOS ABRAHAM JOSEPH MARKOS ISAAC THOMAS P.G.CHANDAPILLAI ABRAHAM ALEXANDER JOSEPH MARKOS SHARAD JOSEPH KODANTHARA RESPONDENTS: 1 THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018. 2 THE COMMISSIONER OF INCOME TAX(APPEALS), AREECKAL MANSION, PANAMPILLY NAGAR, KOCHI-682036. 3 COMMISSIONER OF INCOME TAX(APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI-110001. W.P(C).Nos.1734 & 1976 of 2022 4 4 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110001. 5 UNION OF INDIA MINISTRY OF FINANCE,DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI-110001, REPRESENTED BY ITS SECRETARY. 6 THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH, 1ST FLOOR, BLOCK C-1 & C-11, KOCHI BENCH, 1ST FLOOR, BLOCK-C-1 & C-11, KENDRIYA BHAVAN, KAKKANAD, KERALA-682037. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.06.2022, ALONG WITH WP(C).1734/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).Nos.1734 & 1976 of 2022 5

J U D G M E N T [WP(C) Nos.1734/2022, 1976/2022] The petitioner is common in these cases. The issue arising for consideration is also common and can be conveniently disposed of by a common judgment.

The petitioner faced assessment proceedings in respect of assessment years 2013-2014, 2014-2015 & 2015-2016. The petitioner filed appeals before the appellate authority challenging the orders of assessment. It appears that the appeals have been disposed of without affording an opportunity of hearing to the petitioner, as hearing was not mandatory under the scheme National Faceless Appeal Scheme, 2020. 3. The learned senior counsel appearing for the petitioner in these cases would submit that under the National Faceless Appeal Scheme, 2020, the hearing was granted to the assessee only at the discretion of Principal Chief Commissioner. It is submitted that this provision of the National Faceless Assessment Scheme, 2020 came to be challenged before various Courts and while the matters were being considered by the Supreme Court, the scheme itself was amended, making it mandatory for assessees to be heard, while appeals are decided, if such an option is sought.

The learned standing counsel appearing for the respondents would content that the orders at Exts.P16 & P17 in W.P(C) No.1734/2022 and Ext.P2 in W.P.(C)No.1976/2022, pertaining to the assessment years in question cannot be faulted, because they are issued in accordance with the provisions of the scheme as it existed at that point of time. However, he fairly submits that as per the amended scheme, hearing is mandatory.

Taking note of the submissions of the learned senior counsel appearing for the petitioner in these cases and the learned standing counsel appearing for the Income Tax Department, I am of the opinion that the denial of opportunity to the petitioner for a hearing at the stage of appeal is a violation of principles of natural justice and even if the provisions of the scheme did not provide for such an opportunity, the rules of natural justice have to be read into the scheme and the petitioner was definitely entitled to an opportunity to present its case before the appeals were decided. It must also be noticed that the scheme itself has been later amended making it mandatory to grant an opportunity of hearing if the same is sought. Therefore, I am of the view that Exts.P16 & P17 in W.P(C) No.1734/2022 and Ext.P2 in W.P.(C)No.1976/2022 which are orders in appeal for assessment years 2013-2014, 2014-2015 & 2015-2016 are liable to be set aside. Therefore Exts.P16 & P17 in W.P(C) No.1734/2022 and Ext.P2 in W.P.(C)No.1976/2022 are quashed. Consequently, the appeals filed by the petitioner in respect of the aforesaid assessment years will stand restored to file and they shall be disposed of in accordance with law after affording an opportunity of hearing to the petitioner. These writ petitions will stand allowed in the manner indicated above. GOPINATH P. JUDGE ats

Appendix — schedule of exhibits

APPENDIX OF WP(C) 1734/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF ASSESSMENT ORDER DATED 30.03.2016 FOR ASSESSMENT YEAR 2013-14 PASSED BY THE 1ST RESPONDENT. Exhibit P2 TRUE COPY OF ASSESSMENT ORDER DATED 20.12.2019 FOR ASSESSMENT YEAR 2014-15 PASSED BY THE 1ST RESPONDENT. Exhibit P3 TRUE COPY OF APPEAL DATED 18.04.2016 FOR ASSESSMENT YEAR 2013-14 Exhibit P4 TRUE COPY OF APPEAL DATED 20.01.2020 FOR ASSESSMENT YEAR 2014-15. Exhibit P5 TRUE COPY OF THE JUDGMENT DATED 09.03.2020 OF THIS HON'BLE COURT IN WP.NO.7039 OF 2020. Exhibit P6 TRUE COPY OF THE NOTIFICATION DATED 25.09.2020 INTRODUCING FACELESS APPEAL SCHEME, 2020 BY THE GOVERNMENT OF INDIA. Exhibit P7 TRUE COPY OF THE ORDER DATED 16.10.2020 IN WP(C) NO. 8044/2020 OF THE DELHI HIGH COURT. Exhibit P8 TRUE COPY OF THE ORDER DATED 03.09.2021 PASSED BY THE HON'BLE SUPREME COURT IN TRANSFER PETITION NOS. 1445/1446 OF 2021. Exhibit P9 TRUE COPY OF THE ORDER DATED 01.10.2021 PASSED BY THE HON'BLE SUPREME COURT IN TRANSFER PETITION NOS. 1445/1446 OF 2021. W.P(C).Nos.1734 & 1976 of 2022 9 Exhibit P10 TRUE COPY OF THE ORDER DATED 10.01.2022 PASSED BY THE HON'BLE SUPREME COURT IN TRANSFER PETITION NOS. 1445/1446 OF 2021. Exhibit P11 TRUE COPY OF THE NOTIFICATION DATED 28.12.2021 ISSUED BY THE GOVERNMENT OF INDIA INTRODUCING FACELESS APPEAL SCHEME, 2021. Exhibit P12 TRUE COPY OF THE NOTICE DATED 22.11.2021 ISSUED BY THE 3RD RESPONDENT FOR ASSESSMENT YEAR 2013-14. Exhibit P13 TRUE COPY OF THE NOTICE DATED 22.11.2021 ISSUED BY THE 3RD RESPONDENT FOR ASSESSMENT YEAR 2014-15. Exhibit P14 TRUE COPY OF THE RESPONSE ACKNOWLEDGEMENT DATED 29.11.2021 ALONG WITH WRITTEN SUBMISSIONS FOR ASSESSMENT YEAR 2013-14 FILED BY THE PETITIONER. Exhibit P15 TRUE COPY OF THE RESPONSE ACKNOWLEDGEMENT DATED 29.11.2021 ALONG WITH WRITTEN SUBMISSIONS FOR ASSESSMENT YEAR 2014-15 FILED BY THE PETITIONER. Exhibit P16 TRUE COPY OF THE APPELLATE ORDER DATED 03.12.2021 FOR ASSESSMENT YEAR 2013-14. Exhibit P17 TRUE COPY OF THE APPELLATE ORDER DATED 17.12.2021 FOR ASSESSMENT YEAR 2014-15. Exhibit P18 TRUE COPY OF THE RECOVERY NOTICE DATED 30.12.2021 FOR ASSESSMENT YEAR 2013-14. Exhibit P19 TRUE COPY OF THE RECOVERY NOTICE DATED 31.12.2021 FOR ASSESSMENT YEAR 2014-15. W.P(C).Nos.1734 & 1976 of 2022 10 APPENDIX OF WP(C) 1976/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 31.12.2017 OF THE 1ST RESPONDENT Exhibit P2 TRUE COPY OF THE ORDER DATED 02.12.2021 PASSED BY THE 2ND RESPONDENT Exhibit P3 TRUE COPY OF THE NOTIFICATION DATED 25.09.2020 ISSUED BY THE MINISTRY OF FINANCE, (DEPARTMENT OF REVENUE), (CENTRAL BOARD DIRECT TAXES),NEW DELHI. Exhibit P4 TRUE COPY OF THE SECOND APPEAL DATED 04.01.2022 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. Exhibit P5 TRUE COPY OF COVERING LETTER DATED 07.01.2022 TOGETHER WITH THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. Exhibit P6 TRUE COPY OF THE COMMUNICATION DATED 30.12.2021 ISSUED BY THE 1ST RESPONDENT Exhibit P7 TRUE COPY OF THE WRITTEN SUBMITTED DATED NIL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P8 TRUE COPY OF THE APPEAL DATED NIL FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), KOCHI FOR ASSESSMENT YEAR 2015-16.

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