RBL BANK LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX AND ORS

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WP/7350/2021HC BombayHCBM07036575202120 December 2021Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE AMIT BORKAR2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in view of the concession made by the counsel for the respondents, granted prayer clause (a) of the writ petition. The Court quashed and cancelled the impugned assessment order under Section 143(3) dated September 28, 2021, the notice of demand under Section 156 dated September 28, 2021, and the penalty notices dated September 28, 2021. The matter was remanded for denovo consideration. The concerned authority was directed to pass a fresh assessment order strictly complying with the mandatory provisions of Section 144B of the Income Tax Act, 1961. This included considering all submissions made by the petitioner and granting a personal hearing at least seven days in advance. The assessment order was to be passed within twelve weeks of the order being uploaded. No issue was expressly left undecided.

What were the facts?

The petitioner, RBL Bank Limited, filed a writ petition before the Bombay High Court challenging an assessment order under Section 143(3) of the Income Tax Act, 1961, a notice of demand under Section 156, and penalty notices, all dated September 28, 2021, for Assessment Year 2019-20. The petitioner's grievance was that the show cause-cum-draft assessment order was not delivered to them. The respondents were the Assistant Commissioner of Income Tax, Circle – 1, Kolhapur, and others. The High Court was considering the petitioner's prayer to quash these orders and direct a fresh assessment.

What were the issues?

1. Whether the assessment order, notice of demand, and penalty notices dated September 28, 2021, are liable to be quashed and cancelled, and a fresh assessment directed, on the ground that the show cause-cum-draft assessment order was not delivered to the petitioner? (Question of mixed law and fact, turning on principles of natural justice and procedural compliance under the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the impugned orders should be quashed because the mandatory show cause-cum-draft assessment order was not delivered to them, thus violating principles of natural justice and fair procedure. Revenue's Contention: The counsel for the respondents, while appearing as an Officer of the Court, conceded that the petitioner's grievance regarding the non-delivery of the show cause-cum-draft assessment order appeared justified. They suggested that the Court grant the petitioner's prayer and remand the matter for denovo consideration.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 156,Section 144B

AI-generated summary — verify with the full judgment below

1/2 921.WP-7350-2021.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7350 OF 2021 RBL Bank Limited ….Petitioner V/s. Assistant Commissioner of Income Tax, Circle – 1, Kolhapur and Ors. ….Respondents ---- None for petitioner. Mr. Sham V. Walve a/w. Mr. Pritesh Chatterjee for respondents. ---- CORAM : K.R. SHRIRAM & AMIT B. BORKAR, JJ.

DATED : 20th DECEMBER 2021 P.C. : 1 Mr. Walve, counsel for respondents and as an Officer of the Court, in fairness states that the grievance of petitioner that show cause- cum-draft assessment order was not delivered appears to be a justified reason and therefore, the Court may grant prayer clause - (a) and remand the matter for denovo consideration. Prayer clause - (a) reads as under : (a) that this Hon’ble Court may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the record of the case and after going through the same and examining the legality thereof, to quash and cancel the impugned assessment order u/s. 143(3) of the Act dated 28 September 2021 (Ex. I), the impugned notice of demand u/s. 156 dated 28 September 2021 (Ex. J) and the impugned penalty notices dated 28 September 2021 (Ex. K), and direct fresh decision/ assessment for the Assessment Year 2019-20. 2 In view of the above, we hereby grant prayer clause - (a) quoted above and remand the matter for denovo consideration with a Gauri Gaekwad GAURI AMIT GAEKWAD Digitally signed by GAURI AMIT GAEKWAD Date: 2021.12.22 11:31:55 +0530

2/2 921.WP-7350-2021.doc direction to the concerned authority to pass the assessment order and strictly comply with the mandatory provisions prescribed under Section 144 (B) of the Income Tax Act, 1961 including considering all the submissions made by petitioner and also granting a personal hearing. Notice about personal hearing shall be given atleast seven days in advance and the assessment order, after complying with the procedure required, shall be passed within twelve weeks of this order getting uploaded. 3 Petition disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.) Gauri Gaekwad

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