ARUN SHIRKE vs. PRINCIPAL COMMISSIONER OF INCOME TAX THANE AND ANR

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WP/6069/2023HC BombayHCBM01021244202329 August 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court quashed and set aside the impugned order dated March 29, 2023. The court found that the petitioner, being an individual, was likely not served the notice before the date he was supposed to make submissions. Therefore, the matter was remanded to respondent no.1 for a fresh decision on merits. The court directed that respondent no.1 must provide a personal hearing to the petitioner, with at least five working days' advance notice via courier and email. During the hearing, the petitioner would be allowed to submit relevant documents and explanations, including legal precedents. The final order to be passed must be a reasoned order addressing all of the petitioner's submissions. The application is to be disposed of within twelve weeks from the date the order is uploaded. The court explicitly stated that no observations were made on the merits of the matter.

What were the facts?

The petitioner, Arun Shirke, challenged an order dated March 29, 2023, passed by the Principal Commissioner of Income Tax, Thane (respondent no.1) under Section 264 of the Income Tax Act, 1961. The petitioner's application, filed on November 18, 2021, was rejected because he allegedly failed to submit explanations and respond to a show cause notice dated March 16, 2023. The petitioner contended that he received the show cause notice only on March 27, 2023, after the scheduled submission date of March 23, 2023. The revenue did not deny the date of receipt but stated the notice was issued through the ITBA system on the same day it was issued.

What were the issues?

1. Whether the order dated March 29, 2023, passed by the Principal Commissioner of Income Tax, Thane, under Section 264 of the Income Tax Act, 1961, is valid, considering the petitioner's contention that he received the show cause notice after the scheduled date for submissions. Assessee's contentions: The petitioner argued that he was not served the notice before the date on which he was required to make submissions before respondent no.1, as he only received the notice on March 27, 2023, while the submission date was March 23, 2023. This prevented him from providing explanations and documents. Revenue's contentions: The revenue stated that the show cause notice was issued through the ITBA system and hence served on the petitioner on the same day it was issued. They did not deny the petitioner's assertion of receiving it on March 27, 2023.

Which sections of the Income-tax Act were involved?

Section 264

AI-generated summary — verify with the full judgment below

1/2 911.WP-6069-2023.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6069 OF 2023 Arun Shirke ….Petitioner V/s. Principal Commissioner of Income Tax, Thane & Anr. ....Respondents ---- Mr. Sham Walve a/w. Mr. Abhishek Khandelwal for petitioner. Mr. Ajeet Manwani a/w. Ms. Samiksha Kanani for respondents. ---- CORAM : K. R. SHRIRAM & DR. N. K. GOKHALE, JJ.

DATED : 29th AUGUST 2023 P.C. : 1 Petitioner is impugning an order dated 29th March 2023 passed under Section 264 of the Income Tax Act, 1961 (the Act) by respondent no.1 rejecting petitioner’s application filed on 18th November 2021. Rejection has been on the ground that petitioner has not submitted any explanation and has also not responded to the show cause notice dated 16th March 2023. 2 In the facts and circumstances of the case, we do not wish to go into the details of background. Suffice to say, petitioner was issued notice dated 16th March 2023 by respondent no.1 calling upon petitioner to submit relevant documents and explanation regarding petitioner’s case on 23rd March 2023 at 11.30 a.m. It is petitioner’s case that the said notice itself was received by petitioner only on 27th March 2023. At Exhibit “Q” is copy of the postal acknowledgment. It is not denied in the affidavit in reply Gauri Gaekwad

2/2 911.WP-6069-2023.doc that petitioner received it only on 27th March 2023. It is only stated that the show cause notice was issued through ITBA system of the Department and hence, served on petitioner on the same day. 3 Petitioner is an individual and we would, therefore, proceed on the basis that petitioner was not served the notice before the date on which he was to make submissions before respondent no.1. 4 In the circumstances, we hereby quash and set aside the impugned order dated 29th March 2023 and remand the matter to respondent no.1 to pass such order as he deems fit on merits. Before passing any order, respondent no.1 shall give personal hearing to petitioner, notice whereof shall be communicated atleast five working days in advance by courier as well as by email at arun.shirke@dfpcl.com. During the personal hearing petitioner may submit relevant documents and explanation including legal precedent. The order to be passed shall be a reasoned order dealing with every submission of petitioner. Application of petitioner to be disposed within twelve weeks from the date this order is uploaded. 5 Petition disposed. 6 We clarify that we have not made any observation on the merits of the matter. (DR. N. K. GOKHALE, J.) (K. R. SHRIRAM, J.) Gauri Gaekwad

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