PARAKKADAVIL MOHAMMED KUNJU ANSARI vs. THE INCOME TAX OFFICER,

It is not in dispute that the petitioner submitted his reply to Ext.P15 notice through Ext.P16 communication of the same date.

A statement has been filed on behalf of the respondent wherein the sequence of events leading to the passing of the assessment order is detailed. It is pointed out that, through the series of queries that were raised on the petitioner by the department, the department was only seeking corroborative evidence for substantiating the claim of the petitioner for exemption of a substantial portion of the income declared by him. It is pointed out that the details sought were essentially for enabling the petitioner to establish that the exemption claim was in respect of agricultural income which would not fall for assessment under the head of WP(C).No.1470 OF 2019(G) : 5 : Capital Gains. It is the stand of the department that the assessment order confirmed a demand of income tax on the petitioner only because he had not succeeded in substantiating his claim for exemption, and further, had not offered any satisfactory explanation for the unaccounted income detected, with any reliable documents and hence there was no prejudice caused to the petitioner on account of no hearing having been extended to him prior to passing the assessment order. It is, in particular, pointed out that, had the petitioner disclosed the true and correct information before the Assessing Officer, as he was obliged to do in terms of the Income Tax Act, there would have been no necessity for the department to issue notices to the petitioner calling for documents to substantiate his claim for exemption. The delay in completing the assessment is therefore stated to be attributable solely to the inaction on the part of the petitioner in not furnishing the necessary details along with the return for the assessment year in question.

I have heard the learned counsel for the petitioner and the learned Standing Counsel appearing for the Income Tax Department.

On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I find that Ext.P17 is an order passed under Section 143(3) of the Income Tax Act. It is not in dispute before me that the statutory notice under Section 143(2) of the WP(C).No.1470 OF 2019(G) : 6 : Income Tax Act was served on the petitioner on 7.7.2017. It is therefore evident that the statutory preconditions to be adhered to before completing an assessment against the petitioner, had been complied by the department in the instant case. The obligation to disclose, fully and correctly, the income that was earned by the assessee during the assessment period, was on the assessee himself, and if the department had issued notices to the assessee seeking for documents to substantiate his claim for exemption, then that cannot be treated as a new proposal by the department to fasten a liability on the petitioner. Accordingly, there was no obligation on the department to afford yet another hearing to the petitioner before passing the assessment order. In the instant case, the various queries raised by the department after perusing the reply given by the assessee to the notice issued under Section 143(2) of the Income Tax Act would clearly reveal that the department was only seeking for the documents that would substantiate the claim of the petitioner assessee for exemption in respect of a substantial portion of the income that was declared by him in the return. Ultimately, by Ext.P17 assessment order, all that the department did, was to deny the claim for exemption of the petitioner assessee, and while doing so, the department was not obliged to grant any hearing to the petitioner over and above the opportunities that had already been extended to the petitioner to respond to the specific queries raised by the department. In my view, there cannot be a mechanical application of the principles of natural justice in every case and the necessity of affording a hearing to an WP(C).No.1470 OF 2019(G) : 7 : assessee, in order to comply with the rules of natural justice, must be examined on the facts of each case. On the facts of the instant case, I do not find any prejudice having been caused to the petitioner through the denial of a personal hearing since, although the petitioner has a case that he could have submitted additional documents, he ought to have done so within the time granted to him by the department and, further, no such documents have been produced in the writ petition. Resultantly, I do not find Ext.P17 order to be vitiated by a non compliance with the rules of natural justice, or by any other jurisdictional error, so as to warrant an interference with the said order in these proceedings under Art.226 of the Constitution of India. The writ petition in its challenge against the said order and Ext.P18 demand notice fails, and is accordingly dismissed. The learned counsel for the petitioner would submit that he would require some time to move the appellate authority in an appeal against Ext.P17 order. Taking note of the said submission of the learned counsel for the petitioner, I direct that if the petitioner prefers an appeal against Ext.P17 order, before the appellate authority, within six weeks from today, then the appellate authority shall consider and pass orders in the appeal, on merits, after hearing the petitioner. In order to enable the petitioner to move the appellate authority, I direct that recovery steps for recovery of amounts confirmed against the petitioner by Ext.P17 assessment order/Ext.P18 demand notice shall be kept in abeyance for the above said