Intergrow Brands Private Limited vs The ...
2022 Latest Caselaw 223 Ker

                IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
          THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
     TUESDAY, THE 11TH DAY OF JANUARY 2022 / 21ST POUSHA, 1943
                        WP(C) NO. 12052 OF 2021
PETITIONER:

          INTERGROW BRANDS PRIVATE LIMITED,
          62/1814A AJAY VIHAR, M.G. ROAD,
          ERNAKULAM-682016,
          REPRESENTED BY ITS MANAGING DIRECTOR, MR. ASHOK MANI.

          BY ADVS.
          JOSEPH MARKOSE (SR.)
          V.ABRAHAM MARKOS
          ABRAHAM JOSEPH MARKOS
          ISAAC THOMAS
          ALEXANDER JOSEPH MARKOS
          SHARAD JOSEPH KODANTHARA



RESPONDENT/S:

    1     THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF
          INCOME TAX,
          INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE,
          NEW DELHI-110001.

    2     THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX,
          NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110001.

    3     ASSISTANT COMMISSIONER OF INCOME TAX,
          CORPORATE CIRCLE-1(1), KOCHI-682018.

    4     THE PRINCIPAL COMMISSIONER OF INCOME TAX,
          KOCHI-682018.

          R BY JOSE JOSEPH, SC


     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
11.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 12052 OF 2021            ..2..




                      JUDGMENT

The petitioner is a company, engaged in the

manufacture of spices and spice extracts.

2. For the assessment year 2018-19, the petitioner

filed Ext.P2 return declaring net loss of Rs.16.72 crores.

The return filed by the petitioner was taken up for

scrutiny assessment by issuance of notice under Section

143(2) of the Income Tax Act, 1961 (hereinafter

referred to as the 'Act' for short). However, the

petitioner was later informed that the scrutiny

assessment is being taken under the Faceless

Assessment Scheme under Section 143(3A) before the

1st respondent. According to the petitioner, the

petitioner was issued with Ext.P4 show cause notice

under Section 144B(xvi), asking the petitioner to show

cause as to why the draft assessment therein shall not WP(C) NO. 12052 OF 2021 ..3..

be finalised. 15 days time was granted to the petitioner

to submit explanation to Ext.P4 show cause notice. The

petitioner sought for additional 10 days time for

submitting explanation vide Ext.P5 letter. However,

without granting sufficient time as sought for in Ext.P5,

the draft assessment in Ext.P4 was finalised by Ext.P7

assessment order. Ext.P7 was followed by Ext.P8

penalty under Section 274 of the Act. Exts.P7 and P8

orders are impugned in this writ petition. It is

contended by the petitioner that Exts.P7 and P8 are

issued in total violation of principles of natural justice.

3. The learned Standing Counsel for the

respondents submits that Ext.P8 is only a notice for

penalty.

4. Heard the learned senior counsel for the

petitioner and Sri.Jose Joseph, the learned Standing

Counsel for the Income Tax Department.

WP(C) NO. 12052 OF 2021 ..4..

5. It is true that the petitioner has got an

alternate remedy by way of appeal under Section 246A

of the Act. However, Ext.P7 order is evidently issued

without giving reasonable opportunity to submit

explanation to Ext.P4 show cause notice, in spite of the

request for additional time sought for in Ext.P5. Since

the petitioner was not granted adequate opportunity to

submit explanation to the show cause notice, I find that

there is violation of principles of natural justice in

issuing Exts.P7 and P8 orders. Accordingly, Ext.P7

order is set aside and the 1 st respondent is directed to

pass fresh orders of assessment after granting a

reasonable opportunity of being heard after giving

sufficient time to file objection to Ext.P4 show cause

notice. The objections, if any to Ext.P4 show cause

notice shall be filed by the petitioner within a period of WP(C) NO. 12052 OF 2021 ..5..

15 days from the date on which the Department opens

up the link for filing objections. Since Ext.P7 has been

set aside, consequently, Ext.P8 notice for penalty will

also stands set aside.

The writ petition is allowed to the above extent.

Sd/-

                          MURALI PURUSHOTHAMAN
                                  JUDGE
SB/11/01/2022
 WP(C) NO. 12052 OF 2021         ..6..


              APPENDIX OF WP(C) 12052/2021

    PETITIONER EXHIBITS

Exhibit TRUE COPY OF THE ORDER DATED 28/05/2021 IN P1 WPC NO.11540/2021 PASSED BY THIS HONOURABLE COURT.

Exhibit TRUE COPY OF THE RETURN ACKNOWLEDGMENT FOR P2 AY 2018-19 DATED 31/10/2018.

Exhibit TRUE COPY OF NOTICE ISSUED UNDER SECION P3 142(1) DATED 24/12/2020.

Exhibit TRUE COPY OF THE SHOW CAUSE NOTICE DATED P4 04/05/2021 ISSUED BY THE 1ST RESPONDENT.

Exhibit TRUE COPY OF THE SCREENSHOT OF THE E- P5 PROCEEDINGS EVIDENCING SEEKING OF ENLARGEMENT OF TIME TO RESPOND TO SCN OBTAINED FROM THE INCOME TAX E-PROCEEDINGS PORTAL.

Exhibit TRUE COPY OF THE SCREENSHOT OF THE E- P6 PROCEEDINGS EVIDENCING THE REASONS FOR SEEKING OF ENLARGEMENT OF TIME TO RESPOND TO SCN OBTAINED FROM THE INCOME TAX E- PROCEEDINGS PORTAL.

Exhibit TRUE COPY OF THE ASSESSMENT ORDER DATED P7 27/05/2021 TOGETHER WITH COMPUTATION SHEET AND NOTICE OF DEMAND.

Exhibit TRUE COPY OF THE PENALTY NOTICE UNDER P8 SECTION 274 OF THE ACT ISSUED BY THE 1ST RESPONDENT.

Exhibit TRUE COPY OF THE JUDGMENT DATED 10/05/2021 P9 IN WPC NO.5234/2021 PASSED BY THE DELHI HIGH COURT AND REPORTED IN (2021) 127 TAXMANN.COM 194 (DELHI).

WP(C) NO. 12052 OF 2021 ..7..

Exhibit TRUE COPY OF THE JUDGMENT REPORTEDIN 1994 P10 KLJ TAX CASES 24 MS JEWELLERY VS.

ASSISTANT COMMISSIONER (ASSESSMENT)