RAJASEKHARAN NAIR GOPALAKRISHNAN, vs. UNION OF INDIA,

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WP(C)/14910/2022HC KeralaKLHC01029985202219 October 2023Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the notice issued under Section 144B of the Income Tax Act, 1961, on 29.03.2022, which demanded a reply on the same day by 23:59 hours, was unsustainable. The Court found that this notice did not provide the petitioner with a reasonable opportunity to file a response to the show cause notice, thereby violating the principles of natural justice and the procedural requirements of Section 144B. Consequently, the Court allowed the writ petition, setting aside Exhibits P6 and P7. The matter was remitted back to the 2nd respondent to pass a fresh order after affording the petitioner a reasonable opportunity to file a response to the notice dated 29.03.2022 (Exhibit P5). The Court cautioned that if the petitioner failed to avail this opportunity, no further writ petition would be entertained. After the finalization of the order by the assessing authority, the petitioner was advised to pursue statutory remedies.

What were the facts?

The petitioner, Rajasekharan Nair Gopalakrishnan, filed a writ petition under Article 226 of the Constitution of India. The petitioner sought to quash notices and orders (Exhibits P6 & P7) and sought a direction for the 2nd Respondent (Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income-Tax Officer, National Faceless Assessment Centre, Delhi) to pass a fresh assessment order for the assessment year 2017-18. The petitioner contended that a notice under Section 144B was issued on 29.03.2022 (Exhibit P5), requiring a reply on the same day by 23:59 hours. The petitioner argued that this notice was disposed of as a mere formality, and he was virtually denied any opportunity to respond to the show cause notice.

What were the issues?

1. Whether the notice issued under Section 144B of the Income Tax Act, 1961, on 29.03.2022, which required the petitioner to submit a reply by 23:59 hours on the same day, afforded reasonable opportunity to the petitioner to respond to the proposed variations prejudicial to his interest, thereby adhering to the principles of natural justice and the provisions of Section 144B of the IT Act? Assessee's Contention: The petitioner argued that the notice under Section 144B was a mere formality and virtually denied him any opportunity to file a response to the show cause notice, making the subsequent proceedings unsustainable. Revenue's Contention: The judgment does not record any specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 144B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 19TH DAY OF OCTOBER 2023 / 27TH ASWINA, 1945 WP(C) NO. 14910 OF 2022 PETITIONER: RAJASEKHARAN NAIR GOPALAKRISHNAN, AGED 64 YEARS S/O. GOPALAKRISHNAN NAIR, ERAMATHU HOUSE, KEEZHCHERIMEL, CHENGANNOOR PO., ALAPPUZHA, PIN – 689 121. BY ADVS. V.S.CHANDRASEKHARAN LEKSHMI SWAMINATHAN S.JAYAKUMAR HARIDAS K.P. C.A.SABITHA SAJNA T.UMMER RESPONDENT

S : 1 UNION OF INDIA, REPRESENTED BY SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, CENTRAL SECRETARIAT, NEW DELHI, PIN – 110 001. 2 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, PIN – 110 003. 3 INCOME-TAX OFFICER, WARD-2, INCOME-TAX OFFICE, T.K.ROAD, THIRUVALLA, PIN – 689 101. 4 CENTRAL BOARD OF DIRECT TAXES, REPRESENTED BY ITS CHAIRPERSON, CONNAUGHT CIRCUS, NEW DELHI, PIN – 110 001. OTHER PRESENT: JOSE JOSEPH-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 14910 OF 2022 2 DINESH KUMAR SINGH, J. -------------------------------------------- WP(C) NO. 14910 OF 2022 -------------------------------------------- Dated this the 19th day of October, 2023 J U D G M E N T 1. The present Writ Petition has been filed under the Article 226 of the Constitution of India, seeking the following prayers. “I. Issue writ in the nature of certiorari or any other appropriate order or direction, call for the entire documents in pursuant to Exhibit- P6 &7 and quash the same. II. Issue a writ in the nature of mandamus or any other writ or order directing the 2nd Respondent to consider and pass fresh orders for the assessment year 2017-18 strictly adhering to the provisions of Section 144B of the IT Act after giving the petitioner reasonable time to file objections to the variations

WP(C) NO. 14910 OF 2022 3 prejudicial to the interest of the petitioner, if any, proposed to be made to the income and after affording an opportunity of being heard. III. To pass any such order or direction as this Hon’ble Court may deem fit and proper to meet the ends of justice.” 2. The petitioner was issued notice under Section 144(B) on 29.03.2022 in Ext.P5 asking him to submit his reply on the same day before 23:59 hours. The said notice was disposed at quite mere formalities and petitioner was virtually granted no opportunity to file response to the said show cause notice. I find that the subsequent proceedings from the notice dated 29.03.2022 in Ext.P5 is unsustainable. Therefore, this writ petition is allowed and the matter is remitted back to the file of the 2nd respondent to pass a fresh order after affording a reasonable opportunity to the petitioner to file response to Ext.P5 notice. It is

WP(C) NO. 14910 OF 2022 4 made clear that the petitioner does not avail the opportunity granted by the 2nd respondent on time, no writ petition will be entertained by this Court. After the order is finalised by the assessing authority, the petitioner may take statutory remedy as applicable to him. 3. Ext.P6 and Ext.P7 orders are hereby set aside. Sd/- DINESH KUMAR SINGH JUDGE rpr

WP(C) NO. 14910 OF 2022 5 APPENDIX OF WP(C) 14910/2022 PETITIONER’S EXHIBITS Exhibit P1 TRUE COPY OF NOTICE DATED 7/09/2021, UNDER SECTION 143(2) OF I T ACT ISSUED BY 3RD RESPONDENT. Exhibit P2 TRUE COPY OF REPLY DATED 15/09/2021 FILED BY PETITIONER TO SECTION 143(2) NOTICE. Exhibit P3 TRUE COPIES OF NOTICE DATED 22/11/2021 AND REVISED NOTICE DATED 11/03/2022 UNDER SECTION 142(1) OF I T ACT ISSUED TO PETITIONER BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE REPLY SUBMITTED ELECTRONICALLY BY PETITIONER ON 14/03/2022 AND AGAIN ON 16/03/2022 AT THE REQUEST OF THE 2ND RESPONDENT. Exhibit P5 TRUE COPIES OF THE SHOW NOTICE DATED 28/03/2022 & DRAFT ASSESSMENT ORDER, SERVED TO PETITIONER ON 29/03/2022 ISSUED BY 2ND RESPONDENT. Exhibit P6 TRUE COPY OF THE INCOME-TAX ASSESSMENT ORDER DATED 30/03/2022. Exhibit P7 TRUE COPY OF THE DEMAND NOTICE DATED 30/03/2022 ISSUED TO PETITIONER. Exhibit P8 TRUE COPY OF THE JUDGMENT IN WP(C) NO. 11960 OF 2021 DATED 01/10/2021 OF THE HONORABLE HIGH COURT OF KERALA. Exhibit P9 TRUE COPY OF JUDGMENT OF THE HONORABLE SUPREME COURT OF INDIA DATED 03/09/2021 IN CIVIL APPEAL NO.5121 OF 2021.

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