MAHEW K. CHERIAN vs. THE ASSITANT COMMISSIONER OF INCOME TAX

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WP(C)/3592/2018HC KeralaKLHC01035182201802 February 2018Bench: HONOURABLE MR. JUSTICE P.B.SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the petitioner's challenge to the assessment order on the ground of non-compliance with the principles of natural justice was unfounded. While the assessment order stated that the petitioner had not responded to the show-cause notice, a closer reading revealed that the contentions raised by the petitioner in his reply were indeed considered and adverted to in the assessment order. Furthermore, the court noted that the order was passed after providing the petitioner with an opportunity of hearing. Therefore, the court found no justification for the petitioner's claim of violation of natural justice. The writ petition was dismissed, but without prejudice to the petitioner's statutory right to file an appeal against the impugned assessment order.

What were the facts?

The petitioner, Mathew K. Cherian, an assessee, is challenging an assessment order (Ext.P3) dated December 31, 2017, for the assessment year 2015-16. The assessment was initiated under Section 143(3) of the Income Tax Act, 1961. The respondent issued a notice under Section 143(2) on September 22, 2016, to which the petitioner replied on December 26, 2016. Subsequently, the respondent issued a show-cause notice (Ext.P1) on December 29, 2017, proposing to assess Rs. 11,13,52,085/- as income from other sources under Section 56(2)(vii)(c). The petitioner claims to have sent a reply (Ext.P2) on December 30, 2017, but the assessment order was passed on December 31, 2017, purportedly on the premise that no response was received. The petitioner filed a writ petition under Article 226 of the Constitution of India.

What were the issues?

1. Whether the assessment order dated December 31, 2017, is vitiated for non-compliance with the principles of natural justice, specifically regarding the opportunity to respond to the show-cause notice dated December 29, 2017, under Section 143(3) read with Section 56(2)(vii)(c) of the Income Tax Act, 1961? Assessee's Contention: The petitioner argued that the assessment order was passed without considering his reply (Ext.P2) to the show-cause notice (Ext.P1), thus violating the principles of natural justice. Despite sending a reply on December 30, 2017, the order was passed on December 31, 2017, on the premise that no response was received. Revenue's Contention: The revenue contended, as reflected in the court's analysis, that the assessment order did advert to the petitioner's contentions and was passed after affording an opportunity of hearing.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 143(2),Section 56(2)(vii)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR FRIDAY, THE 2ND DAY OF FEBRUARY 2018 / 13TH MAGHA, 1939 WP(C).No. 3592 of 2018 ------------------- PETITIONER(S) --------------

MATHEW K.CHERIAN,

S/O. CHERIAN, AGED 62 YEARS,

KOSAMATTAM HOUSE, MANGANAM. P.O.,

KOTTAYAM, PIN-686 018.

BY ADV.SRI.R.RAMADAS. RESPONDENT(S): --------------

THE ASSISTANT COMMISSIONER OF INCOME TAX,

CENTRAL CIRCLE, KOTTAYAM, PIN-686 001.

BY SRI.JOSE JOSEPH, SC.

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02-02-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs.

WP(C).No. 3592 of 2018 (Y)

APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 29.12.2017 FROM THE RESPONDENT WITH RESPECT TO THE ASSESSMENT YEAR 2015-16. EXHIBIT P2 TRUE COPY OF THE REPLY DATED 30.12.2017 SUBMITTED BY THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 31.12.2017 ISSUED BY THE RESPONDENT IN RESPECT OF THE ASSESSMENT YEAR 2015-16. RESPONDENT'S EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE rs.

P.B.SURESH KUMAR,J ...................................................... W.P.(C).No.3592 of 2018 ...................................................... Dated this the 2nd day of February, 2018 JUDGMENT Petitioner is an assessee under the Income Tax, 1961 (the Act) on the rolls of the respondent. Proceedings have been initiated for revising the self assessment made by the petitioner under Section 143(3) of the Act and the petitioner has been issued notice under Section 143(2) of the Act on 22.09.2016. The petitioner sent a reply to the notice under Section 143(2) on 26.12.2016. It is conceded that there was a hearing thereafter and later, the petitioner has been issued Ext.P1 notice by the respondent directing him to show cause why the sum of Rs.11,13,52,085/- referred to therein shall not be assessed as the income of the petitioner from other sources as provided for under Section 56(2)(vii)(c) of the Act. The petitioner received Ext.P1 notice on 30.12.2017. It is his case that though he sent Ext.P2 reply to Ext.P1 notice on 30.12.2017 itself, Ext.P3 order has been passed thereafter on the premise that the petitioner has not responded to Ext.P1 notice. The petitioner, therefore, challenges, Ext.P3 order in this proceedings under Article 226 of the Constitution of India

W.P.(C).No.3592 of 2018 : 2 : on the ground that the same is vitiated for non-compliance of the principles of natural justice, though the petitioner has a right of appeal under the Act against the said order. 2. Heard the learned counsel for the petitioner as also the learned Standing Counsel for the respondent. 3. Though there is a recital in Ext.P3 order that the petitioner has not responded to Ext.P1 notice, a close reading of Ext.P3 order indicates that the contention taken by the petitioner in Ext.P2 reply sent by him to Ext.P1 notice has been adverted to by the respondent in Ext.P3 order. Further, Ext.P3 order is one rendered after affording the petitioner an opportunity of hearing. In the said circumstances, I do not find any justification for the petitioner to challenge Ext.P3 order on the ground that the same is vitiated for non-compliance of the principles of natural justice. The writ petition is dismissed without prejudice to the right of the petitioner to file an appeal against the impugned order under the statute. Sd/- P.B.SURESH KUMAR, JUDGE hmh

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