TaxTMI 
TaxTMI 
2025 (3) TMI 51
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....2, proposing the initiation of penalty proceedings under Section 274 read with Section 270A and Section 271AA (1) of the IT Act ("impugned show cause notices" for short). The substantive prayers are reproduced below:- "(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, calling for the records of the Petitioner's case and after going into the legality and propriety thereof, to quash and set aside the impugned assessment order passed under section 143 (3) read with section 144B dated 09.09.2022 (Exhibit 'E1') and the impugned notice of demand issued under section 156 dated 09.09.2022 (Exhibit 'E2'), show Cause Notices dated 09.09.2022 for initiating penalty proceedings under section 270A (Exhibit 'E3') and under section 271AA (1) ('Exhibit 'E4'), as null and void. (b) This Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction, directing the Respondents, its servants, subordinates, agents and successors in office to: i) quash the impugned asses....
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....nd 17 March 2022 seeking details and documents from the petitioner. The petitioner by its letter 26 November 2021, 13 December 2021, 10 January 2022, 24 January 2022 and 22 March 2022 responded to the aforesaid notices, respectively. 7. It was on 18 August 2022 the respondent no. 1 proceeded to issue a show cause notice-cum-draft assessment order to the petitioner asking to show cause as to why the proposed additions as set out in such notice should not be made to the petitioner's total income. The petitioner was directed to reply to such show cause notice-cum-draft assessment order by 18:00 hours on 26 August 2022. 8. Thereafter, the petitioner duly replied to the said show cause notice-cum-draft assessment order dated 18 August 2022 issued by respondent no. 1 on 26 August 2022, by filing its written submissions along with relevant and material documentary evidences in support thereof. 9. The petitioner, in terms of the instructions as categorically set out in paragraph no. 3(c) of the said show cause notice-cum-draft assessment order dated 18 August 2022 issued by respondent no. 1, made an application with requisite documents on 27 August 2022. The petitioner further sought fo....
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....13. Ms. Halbe would then place due reliance on Section 144B of the IT Act to emphasize that the mandatory procedure provided for therein had to be followed by the respondents not only during assessment proceedings but also whilst issuing the impugned final assessment order dated 9 September 2022 upto issuance of the impugned demand notices and impugned show cause notices to initiate penalty proceedings against the petitioner. In this context, she would refer to paragraph 3 of the show cause notice-cum-draft assessment order dated 18 August 2022 to contend that the petitioner was directed to file its response to such notice/order by 18:00 hours of 26 August 2022. The said draft assessment order also expressly stated that the petitioner was entitled for personal hearing through video conferencing. Accordingly, the petitioner insisted on an opportunity for personal hearing to be granted to the petitioner as set out in the said show cause notice-cum-draft assessment order dated 18 August 2022. Despite such specific request by the petitioner to the respondents for personal hearing the respondent no. 1 proceeded to pass the final impugned assessment order without granting such personal h....
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....elied on the judgment of the Delhi High Court in the case of Divya Capital One Pvt. Ltd. v. Assistant Commissioner of Income-Tax & Anr (2022) 445 ITR 436. In the said case the High Court was dealing with a situation where an order was passed under Section 148A(d) of the IT Act without considering the submissions filed by the assessee which was available on record of the assessing officer, before passing such order. The Delhi High Court considering such facts held that the submissions which are available on record as on the date of passing of the impugned assessment order must be considered. Thus, drawing an analogy, Ms. Halbe would contend that in the present case the application of the petitioner for the grant of personal hearing was very much before the assessing officer before passing the impugned final assessment order dated 9 September 2022. However, the respondent no.1 chose to overlook the statutory mandate under Section 144B (6) (viii) which categorically prescribes for a grant of hearing, to the assessee. 18. Ms. Halbe then placed reliance on various decisions of Supreme Court in Cantonment Board, Dinapore and Ors v. Taramani Devi AIR 1992 SC 61; Delhi Transport Corporati....
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....ek Video Conferencing button available against the SCN, in the view notices of this proceeding in the e-proceedings tab on e-filing portal. The request can be made only before expiry of compliance date & time through video conference. 4. I n case no response in received by the given time and date, the assessment shall be finalized taking into account the variation(s) stated above. " Hence, according to Mr. Sharma, this would show that several opportunities were given to the petitioner. He submits that despite categorically informing the petitioner about the specific date and time to submit the request, the petitioner failed to comply with the same. As a result, the respondent no. 1 had no alternative but to proceed by considering all the relevant material on record. It is submitted that the petitioner requested for hearing through video conferencing only on 27 August 2022 instead of the stipulated date of 26 August 2022 as mentioned in the show cause notice-cum-draft assessment order of the said date. It is hence submitted that the contention of the petitioner that the petitioner was not heard is a complete afterthought which cannot be accepted. 22. Mr. Sharma would further subm....
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....context of completely different and distinct facts and circumstances. Thus, the same have no application in the given case. 26. On merits Mr. Sharma would submit that certain discrepancies emerged warranting certain additions to the petitioner's total income during the course of assessment. This was in the nature of investments amounting to Rs. 2,43,14,139/-; discrepancies in capital account of one of the partner resulting in addition of Rs. 50,60,000/-; discrepancies in transaction (loan) with M/s. Total Holding & Finvest Pvt. Ltd. resulting in addition of Rs. 2,00,00,000/-. Upon total making addition of Rs. 4,58,74,139/- an adjustment of loss brought forward of Rs. 2,43,14,139/-. The total income of the petitioner was correctly assessed at Rs. 2,15,60,000/- for the A.Y. 2020-21 at special rate under Section 115BBE of the IT Act. Accordingly, on a demand notice of Rs. 2,21,98,176/- was issued to the petitioner under Section 156 of the IT Act for said A.Y. 2020-21 on 9 September 2022. 27. Mr. Sharma would submit that, all such proposed additions to the total income of the petitioner are within the framework of the IT Act. Consequently, according to Mr. Sharma, the penalty notices....
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....day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment..............." In the above context, we may now refer to the show cause notice-cum-draft assessment order dated 18 August 2022 issued by respondent no. 1 more particularly paragraphs no. 3 and 4 of the said notice reproduced (Supra). A plain reading of the above paragraphs makes it clear that besides granting an option to the assessee to file its reply objecting to the proposed variation of the respondents, in writing a further opportunity is required to be given to the assessee by offering a personal hearing through video conferencing. Such response was required to be submitted by the petitioner, on the e-filing portal by 18:00 hours of 26 August 2022, which was ....
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....oked the said provision of Section 144B read with Section 143 (3) of the IT Act in passing the impugned final assessment order dated 9 September 2022. In this context, we refer to a judgment of the Supreme Court in the case of Tin Box Co v. Commissioner of Income-Tax [2001] 116 Taxman 491, where the Supreme Court held that placing evidence before the first appellate authority or before the Tribunal is of no consequence, as it is the assessment order that counts. Such order must be made after the assessee has been given a reasonable opportunity of presenting his case. Clearly, in the facts of the given case such principle has not been followed by the respondents. 32. It would be apposite to refer to a decision of a co-ordinate bench of this Court in the case of Teerth Builders and Realties JV (AOP) vs. The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income Tax Officer 2024 SCC OnLine Bom. 3621, (of which G.S. Kulkarni, J. was a member). Paragraph 15 of this judgment reads thus :- "15. We may also observe that the principles of natural justice are statutorily recognized in the provisions of Section 144B of the IT Act. Any nonadherence to the mandatory requirement....
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....icle 14 of the Constitution of India. In this regard, more particularly, the judgment of the Supreme Court in the case of Delhi Transport Corporation (Supra) read with Union of India v. Tulsiram Patel (1985) 3 SCC 398 holding that the principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 of the Constitution of India. In view thereof, depriving the petitioner of the right to be heard would violate their fundamental right under Article 14. Therefore, even on such count, the impugned final assessment order lacks legal foundation. 36. In light of the above, we are unable to agree with the submissions advanced by Mr. Sharma, one on the ground of availability of alternate statutory remedy to the petitioner which ought to have been exhausted before approaching this Court in writ jurisdiction. Such submission, in the given facts, would fall foul of the statutory mandate under Section 144B of the IT Act, which embraces the right to be heard, failing which the order would be without jurisdiction and non est. In the given facts and circumstance, it would be unfair and unjust to the petitioner to be left entangled in litigation ....