M/S MULBERRY SILKS LTD vs. NATIONAL FACELESS ASSESSMENT CENTRE

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WP/17817/2021HC KarnatakaKAHC01036178202109 August 2023Author: KRISHNA S DIXIT3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition, issuing a writ of certiorari to quash the impugned order and all consequential actions taken by the respondent authority. The matter was remitted for consideration afresh in accordance with law, with all contentions kept open. The Court noted that the subject matter was substantially similar to another writ petition (W.P.No.15980/2021) which had also been disposed of by quashing the impugned order and remitting the matter. The Court found the assessee's argument that like cases should be treated alike to be correct, as no derogatory circumstances were demonstrated by the revenue to warrant differential treatment. The operative direction was to quash the order and remit the matter for fresh consideration.

What were the facts?

The petitioner, M/s Mulberry Silks Ltd., filed a writ petition challenging the constitutional validity of Section 144B of the Income Tax Act, 1961, and an order dated 09.09.2021 passed by the National Faceless Assessment Centre (NFAC), Delhi. The petitioner argued that Section 144B is violative of Articles 14, 19, and 300A of the Constitution and sought to read down the section to include principles of natural justice. Alternatively, the petitioner sought to quash the impugned order as being violative of Articles 14, 19, 265, and 300A of the Constitution, as well as Section 144B of the Act. The petition was filed against the NFAC, CBDT, and the Union of India.

What were the issues?

1. Whether Section 144B of the Income Tax Act, 1961, is violative of Articles 14, 19, and 300A of the Constitution of India, and if so, whether it should be read down to include the principles of natural justice in the faceless assessment scheme? (Question of constitutional law and statutory interpretation) 2. Whether the impugned order dated 09.09.2021 passed by the National Faceless Assessment Centre is violative of Articles 14, 19, 265, and 300A of the Constitution, as well as Section 144B of the Income Tax Act, 1961? (Question of constitutional law and statutory interpretation) Assessee's Contentions: The assessee argued that Section 144B is unconstitutional and should be read down to incorporate principles of natural justice. The assessee also contended that the impugned order is violative of fundamental constitutional rights and Section 144B itself. Revenue's Contentions: The judgment does not record specific contentions made by the revenue. However, it notes that despite endeavors by the revenue's counsel, no circumstances were demonstrated to warrant differential treatment of the assessee.

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 KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF AUGUST, 2023 BEFORE THE HON'BLE MR JUSTICE KRISHNA S DIXIT WRIT PETITION NO. 17817 OF 2021 (T-IT) BETWEEN:

M/S MULBERRY SILKS LTD., 2 O SHAUGHNESSY ROAD, BANGALORE NORTH, BANGALORE-560 025. REPRESENTED BY SHRI MANISH KUMAR BOTHRA MANAGING DIRECTOR, AGED ABOUT 47 YEARS, S/O LATE RAJENDRA KUMAR BOTHRA …PETITIONER (BY SRI.RAGHURAMAN V.,SENIOR COUNSEL A/W SRI. RAGHAVENDRA C R., ADVOCATE)

AND:

1.

NATIONAL FACELESS ASSESSMENT CENTRE DELHI REPRESENTED BY PRINCIPAL COMMISSIONER OF INCOME TAX-4 BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE-560 095,

2.

CENTRAL BOARD OF DIRECT TAXES MINISTRY OF FINANCE,

REP BY CHAIRMAN, DEPARTMENT OF REVENUE, D-1/35, NORTH BLOCK, NEW DELHI-110 001.

3.

UNION OF INDIA, MINISTRY OF FINANCE,

Digitally signed by SHARADA VANI B Location: HIGH COURT OF KARNATAKA

REPRESENTED BY SECRETARY, NORTH BLOCK, NEW DELHI-110 001. …RESPONDENTS (BY SRI.M DILIP., ADVOCATE FOR SRI.K V ARAVIND.,ADVOCATE FOR R1 & R2; SRI.B S VENKATANARAYANA.,CGC FOR R3)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THAT SECTION 144B OF THE INCOME TAX ACT, 1961 ENCLOSED AS ANNEXURE-A BE STRUCK DOWN AS VIOLATIVE OF ARTICLE 14/19/300A OR IN THE ALTERNATIVE BE READ DOWN TO MANDATORILY INCLUDE THE FOLLOWING OF THE PRINCIPLES OF NATURAL JUSTICE IN THE SCHEME OF FACELESS ASSESSMENT AND QUASH THE IMPUGNED ORDER DATED 09.09.2021, ENCLOSED AS ANNEXURE-B, PASSED BY R1 AS BEING VIOLATIVE OF ARTICLE 14, ARTICLE 19, ARTICLE 265 AND 300A OF THE CONSTITUTION AS ALSO SECTION 144B OF THE INCOME TAX ACT, 1961 AND ETC.,

THIS PETITION COMING ON FOR PRELIMINARY HEARING IN B GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

The subject matter of this Writ Petition is substantially similar to the one in W.P.No.15980/2021 (T-IT) between M/S MONARCH vs NATIONAL FACELESS ASSESSMENT CENTRE, DELHI & OTHERS, disposed off by this Court on 09.08.2023. This court having quashed the impugned order of the kind has remitted the matter for consideration afresh.

2.

Learned Sr. Advocate appearing for the Assessee is right in telling the court that like cases should be treated alike and similarly circumstanced litigant should be extended the similar relief in the absence of any derogatory circumstances being demonstrated. Despite the endeavors of learned Panel Counsel appearing for the revenue, no such thing is demonstrated to warrant a differential treatment of litigant Assessee.

In the above circumstances, this Writ Petition is allowed; a Writ of Certiorari issues quashing the impugned order and all consequential actions taken at the hands of respondent authority. Matter is remitted for consideration afresh, in accordance with law, all contentions having been kept open.

Costs made easy.

Sd/- JUDGE Bsv List No.: 1 Sl No.: 29

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