ANEESA KURUKKAN MULAYIL, vs. UNION OF INDIA,

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WA/97/2024HC KeralaKLHC01005445202422 January 2024Bench: HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE,HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN5 pages
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What did the High Court hold?

The High Court held that the assessment order (Ext.P9) had to be set aside due to a violation of the principles of natural justice. The court noted that the appellant had filed a reply (Ext.P8) to the Section 142(1) notice, which the respondents did not deny receiving. The assessment order was passed without considering this reply. Furthermore, the court observed that no reason was provided for the non-issuance of a draft assessment order, which is a mandatory requirement under Section 144B of the Act. The court also acknowledged the possibility of portal glitches contributing to the department's failure to notice the appellant's reply. The High Court allowed the appeal, setting aside the assessment order and granting the appellant an opportunity to participate in the proceedings, including filing further replies, and directed the finalization of assessment within two months after affording a hearing.

What were the facts?

The appellant, Aneesa Kurukkan Mulayil, is challenging a High Court judgment that upheld an assessment order. The assessment year in question is 2013-14. The appellant claims she faced difficulties responding to a notice under Section 148 of the Income Tax Act, 1961, due to portal glitches. Subsequently, she filed a reply (Ext.P8) to a notice under Section 142(1) (Ext.P7). However, the assessment order (Ext.P9) was passed ex parte, stating no response was received. The appellant contends that her reply was not considered and a draft assessment order, as required by Section 144B, was not issued. The High Court noted that the respondents did not deny receipt of Ext.P8 and no reason was given for not issuing a draft assessment order.

What were the issues?

1. Whether there was a violation of the principles of natural justice in passing the assessment order (Ext.P9) without considering the appellant's reply (Ext.P8) filed pursuant to the notice under Section 142(1)? (Question of law and fact, concerning Section 142(1) and principles of natural justice). 2. Whether the assessment order (Ext.P9) was passed in violation of Section 144B of the Income Tax Act, 1961, by not serving a draft assessment order on the appellant? (Question of law, concerning Section 144B). Assessee's Arguments: The appellant argued that her reply (Ext.P8) to the Section 142(1) notice was not considered, violating natural justice. She also contended that a draft assessment order, mandated by Section 144B, was not provided before the final assessment order was passed. Portal glitches prevented her from filing her return initially. Revenue's Arguments: The judgment does not record specific arguments made by the revenue in the writ appeal.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 144B,Section 148

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WA NO. 97 OF 2024
WP(C) 28428/2022

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

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE & THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN MONDAY, THE 22ND DAY OF JANUARY 2024 / 2ND MAGHA, 1945 WA NO. 97 OF 2024 JUDGMENT IN WP(C) 28428/2022 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: ANEESA KURUKKAN MULAYIL, AGED 50 YEARS MOOTHAN MUSLIARAVIDA,PERIGATHUR, PULLOORKKARA, THALASSERY, KANNUR, PIN - 670672 BY ADVS. RAJA KANNAN JOSON MANAVALAN K.JOHN MATHAI KURYAN THOMAS M.GOPIKRISHNAN NAMBIAR PAULOSE C. ABRAHAM RESPONDENTS/RESPONDENTS: 1 UNION OF INDIA, REPRESENTED BY ITS REVENUE SECRETARY, MINISTRY OF FINANCE, NEW DELHI, PIN - 110004 2 ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 3 INCOME TAX OFFICER, WARD 2, AAYAKAR BHAVAN, KONNOTHUMCHAL, HOVVA P.O., KANNUR, PIN – 670006 BY SRI.S.MANU, CGC BY SRI.JOSE JOSEPH, SC, INCOME TAX DEPARTMENT THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WA No.97/2024 ..2.. JUDGMENT SHOBA ANNAMMA EAPEN, J. The writ appeal is filed by the writ petitioner, challenging the judgment of the learned Single Judge dated 08.01.2024 in WP(C) No.28428 of 2022. 2. The only issue to be considered in this writ appeal is whether there was any violation of principles of natural justice while passing Ext.P9 assessment order. The case of the appellant is that before passing Ext.P9 assessment order, the authority concerned has not considered Ext.P8 reply filed by her pursuant to the notices issued under Section 142(1) of the Income Tax Act, 1961 (for short, “the Act”). It is a further case that before passing Ext.P9 assessment order, the appellant was not served with a draft assessment order as contemplated under Section 144B of the Act. 3. The relevant assessment year is 2013-14. According to the appellant, due to glitches in the portal of the department, she was prevented from responding to Ext.P4 notice issued under Section 148 of the Act, by filing a return.

WA No.97/2024 ..3.. Thereafter, several requests were made regarding the difficulty faced by her in filing the return. Subsequently, to Ext.P7 notice dated 03.09.2021 issued under Section 142(1) of the Act by the second respondent, the appellant had filed Ext.P8 reply online. However, Ext.P9 order was passed ex parte. In Ext.P9, it is stated that there was no response from the assessee despite serving Ext.P7 notice under Section 142(1) of the Act. 4. The appellant produced Ext.P8 reply filed by her pursuant to Ext.P7 notice dated 03.09.2021. The Respondents have not denied the receipt of Ext.P8 reply. Further, no reason was offered in the impugned assessment order for the non issuance of the draft assessment order. Admittedly, Ext.P9 assessment order was passed without considering Ext.P8 reply filed by the appellant. It is the specific case of the appellant that she had filed Ext.P8 reply on receipt of Ext.P7 notice. Non consideration of Ext.P8 reply filed by the appellant amounts to violation of principles of natural justice. Moreover, as mandated under Section 144B of the Act, a draft assessment order ought to have been served on the appellant before passing Ext.P9 assessment order. It also appears that

WA No.97/2024 ..4.. there were glitches on the portal of the department for quite a long time. That may be the reason for the department escaping notice of Ext.P8 reply filed by the appellant and coming to the conclusion that there was no response from the assessee pursuant to Ext.P7 notice. While passing the impugned judgment, the learned Single Judge failed to consider these issues raised in the writ petition. 5. Hence, on a consideration of the entire facts and circumstances of the case, we are of the opinion that Ext.P9 assessment order has to be set aside and the appellant is to be given one more opportunity to substantiate her case. Accordingly, the writ appeal is allowed, as follows; A.Ext.P9 assessment order dated 21.09.2021 is set aside. B.There shall be a direction to the respondents to activate the link of the department enabling the appellant to participate in the assessment proceedings and for filing additional reply/response, if any, to Ext.P7 notice, within a period of two weeks from the date of receipt of a certified copy of this judgment. C.The assessment proceedings shall be finalized by the respondents within a period of two months thereafter,

WA No.97/2024 ..5.. after affording the appellant an opportunity of being heard, untrammelled by the observations and findings in the judgment rendered by the learned Single Judge. SD/- A. MUHAMED MUSTAQUE JUDGE SD/- SHOBA ANNAMMA EAPEN JUDGE bka/-

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