ERASSERIL PETER BENNAN vs. INCOME TAX OFFICER,

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WP(C)/1152/2020HC KeralaKLHC01003457202023 January 2020Author: HONOURABLE MR. JUSTICE ALEXANDER THOMAS6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court found the petitioner's factual contention to be correct and tenable. It observed that the 1st respondent (ITO) had indeed relied on an explanation dated December 30, 2019, which the petitioner had subsequently withdrawn and replaced with Ext.P1(a). The Court held that the decision-making process, which led to the assessment order (Ext.P2) by relying on non-existent material, was unreasonable and illegal. Without delving into the merits of the controversy, the Court decided that the assessment order required interdiction, notwithstanding the availability of a statutory appellate remedy. Exercising its discretion under Article 226 of the Constitution of India, the Court set aside the impugned assessment order (Ext.P2) and remitted the assessment for fresh consideration by the 1st respondent. The 1st respondent was directed to afford the petitioner a reasonable opportunity of being heard, permit him to file additional written submissions, and then pass a considered decision in accordance with law without delay.

What were the facts?

The petitioner, Eraseril Peter Bennan, challenged an assessment order (Ext.P2) dated December 31, 2019, passed by the Income Tax Officer (ITO), Ward No - International Tax. The ITO had issued a notice on December 19, 2017, seeking an explanation regarding the source of fixed deposits during the demonetization period. The petitioner submitted a reply (Ext.P1) on September 19, 2019, and another reply on the same date. Subsequently, on December 31, 2019, the petitioner sought permission to withdraw his earlier explanation and filed a fresh reply (Ext.P1(a)) dated December 30, 2019. The petitioner's grievance was that the ITO relied on the withdrawn explanation dated December 30, 2019, which he contended was non-existent material.

What were the issues?

1. Whether the assessment order (Ext.P2) passed by the 1st respondent is liable to be quashed on the ground that it relied on a withdrawn explanation submitted by the petitioner. Assessee's Contention: The petitioner argued that the assessment order (Ext.P2) relied on an explanation dated December 30, 2019, which had been withdrawn by him and replaced with Ext.P1(a). Therefore, the material relied upon was non-existent, rendering the assessment order illegal and unreasonable. The petitioner sought a writ of certiorari to quash the assessment order and a writ of mandamus to direct the 1st respondent to reconsider the issue afresh in light of the submitted replies. Revenue's Contention: The judgment does not record any specific arguments made by the revenue's counsel, Sri. Christopher Abraham, other than his appearance for the respondents.

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 ALEXANDER THOMAS THURSDAY, THE 23RD DAY OF JANUARY 2020 / 3RD MAGHA, 1941 WP(C).No.1152 OF 2020(T) PETITIONER: ERASSERIL PETER BENNAN ERASSERIL HOUSE, NO.17/1095B, MUNDAMVELI, KOCHI-682507. BY ADVS. SRI.A.KRISHNAN SRI.R.UMASANKAR RESPONDENTS: 1 INCOME TAX OFFICER, WARD NO - INTERNATIONAL TAX, OFFICE OF THE INCOME TAX OFFICER, CENTRAL REVENUE BUILDING, IS PRESS ROAD, ERNAKULAM-682018. 2 COMMISSIONER OF INCOME TAX, OFFICE OF COMMISSIONER OF INCOME TAX, 6TH FLOOR, KANDAMKULATHY TOWER, M G ROAD, KARIKKAMURI, SHENOYS, KOCHI, KERALA-682011. SRI.CHRISTOPHER ABRAHAM , SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.1152 OF 2020(T) 2 ALEXANDER THOMAS, J. =========================== W.P(C) No.1152 of 2020 =========================== Dated this the 23rd day of January, 2020

JUDGMENT The prayers in this Writ Petition (Civil) are as follows:

“1. Through issuing a writ of certiorai or any other appropriate writ, Order or direction, call for the records pertaining to Ext.P2 Assessment Order and quash Ext.P2 Assessment Order passed by the 1st respondent.

2.

Through issuing a writ of Mandamus or any other appropriate writ, Order or direction, command the 1st respondent to reconsider the issue afresh in the light of the Ext.P1 and Ext.P1(a) Replies submitted by the petitioner.

3.

Such other appropriate writ, order of direction as this Hon'ble Court may deem fit and proper to grant as to the nature of the case.”

2.

Heard Sri.A.Krishnan, learned counsel appearing for the petitioner and Sri.Christopher Abraham, learned Standing Counsel appearing for the Income Tax Department, Government of India appearing for the respondents.

3.

It appears that the 1st respondent has issued notice dated 19.12.2017 directing the petitioner to offer explanation regarding the source of the fixed deposits mentioned therein during the WP(C).No.1152 OF 2020(T) 3 demonetization period. The petitioner thereupon has filed Ext.P-1 reply dated 19.09.2019. Thereafter, the petitioner has filed yet an yet another reply on 19.09.2019, before the 1st respondent. Immediately thereafter the petitioner sought permission and has withdrawn the said explanation/reply given by him on 31.12.2019 and filed Ext.P-1(a) reply dated 30.12.2019 before the 1st respondent in the matter. The complaint of the petitioner is that the 1st respondent has now passed Ext.P-2 assessment order dated 31.12.2019, by relying on the said explanation dated 30.12.2019, which was actually withdrawn the petitioner and it is was therefore, non-existing material.

4.

After hearing both sides it is seen that the said factual contention raised by the petitioner appears to be correct and tenable. Indeed it appears that the 1st respondent has proceeded to place reliance on the explanation said to have been given by the petitioner on 30.12.2019, which is in fact immediately withdrawn by him and in its place, he has filed Ext.P-1 reply dated 30.12.2019. Therefore, the impugned decision making process, which led to Ext.P-2 assessment order may place reliance on in all existing materials, he has indeed unreasonable and illegal.

WP(C).No.1152 OF 2020(T) 4

5.

Without getting into the merits of the controversy in any manner, it is ordered that Ext.P-2 would require interdiction even though otherwise, it is amenable to appellate challenge as per the provisions contained in the IT Act. Hence, notwithstanding the availability of statutory remedy, this Court is of the view that this is a fit case therein, the discretion of Article 226 of the Constitution of India would be exercised. In that view of the matter, it is ordered that the impugned Ext.P-2 order will stand set aside and the assessment in relation thereto, will stand remitted to the 1st respondent for decision and consideration afresh. The 1st respondent may afford a reasonable opportunity of being heard to the petitioner and permit him to file any additional written submissions in the matter and after taking into consideration all aspects of the matter to which the petitioner has been given opportunity to respond, may take a considered decision thereon, in accordance with law, without much delay.

WP(C).No.1152 OF 2020(T) 5 With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. ALEXANDER THOMAS JUDGE vgd

WP(C).No.1152 OF 2020(T) 6

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE REPLY DATED 19.9.2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P1(A) TRUE COPY OF THE REPLY DATED 30.12.2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P2 TRUE COPY OF ASSESSMENT ORDER DATED 31.12.2019.

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