Santosh Soni vs Union Of India
2022 Latest Caselaw 13924 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 14084/2021

Santosh Soni W/o Shri Rajendra Verma, Aged About 47 Years, Proprietor Of M/s Mahalaxmi Jewellers, Resident Of Sunaron Ka Bas, Ghoron Ka Chowk, Jodhpur.

----Petitioner Versus

1. Union Of India, Through Secretary Finance, Ministry Of Finance, North Block, New Delhi 110001.

2. Principal Commissioner Of Income Tax, Central Circle Jaipur, Jaipur.

3. Deputy/assistant Commissioner Of Income Tax, Central Circle-2, Aaykar Bhawan, Paota, Jodhpur.

                                                                  ----Respondents


For Petitioner(s)        :     Mr. Sharad Kothari with Mr. Mayank
                               Taparia
For Respondent(s)        :     Mr. K.K. Bissa

HON'BLE THE CHIEF JUSTICE MR. PANKAJ MITHAL HON'BLE MR. JUSTICE DINESH MEHTA

Order

28/11/2022

1. The present writ petition preferred under Article 226 of the

Constitution of India impugns the assessment order dated

28.09.2021, which has been passed by the respondent No. 3

under the provisions of Section 143(3) of the Income Tax Act,

1961 (hereinafter referred to as "the Act of 1961").

2. The facts relevant for the purpose of present petition are

that a survey under Section 133(A) of the Act of 1961 was

conducted at the business premises of the petitioner on

01.03.2019 and various documents were impounded and her

statements were recorded. A summons under Section 131(1A) of

(2 of 8) [CW-14084/2021]

the Act of 1961 was thereafter issued to the petitioner on

05.03.2019.

3. The petitioner preferred a writ petition challenging the

summons dated 05.03.2019, in which the respondent - Income

Tax Department filed a reply and took a plea that due to

inadvertence, wrong provision had been mentioned in the

summons. The petitioner's writ petition came to be allowed vide

order dated 23.04.2019 and impugned summons was quashed.

The respondents were, however, given a liberty to take

appropriate proceedings against the petitioner in accordance with

law.

4. Petitioner did not hear anything until, the respondent No. 3

issued a notice under Section 142(1) of the Act of 1961 on

13.02.2021 and called upon her to furnish various information by

19.02.2021.

5. Though, a detailed reply along with desired information was

submitted but the respondent No. 3 remained dissatisfied and

issued a series of notices to the petitioner, which were duly

complied with.

6. Lastly, a notice dated 27.09.2021 came to be issued to the

petitioner calling upon her to furnish information as per the

annexure enclosed with the notice by 4.50 p.m. on 28.09.2021,

According to the petitioner, the same was sent late night at 9.37

p.m. and on receipt of the notice aforesaid, the petitioner

responded by email dated 27.09.2021 and contended that in

absence of the information regarding contentious documents and

copies thereof, the petitioner would not be in a position to furnish

clarification/information.

(3 of 8) [CW-14084/2021]

7. The respondent No. 3 thereafter proceeded to pass the

assessment order dated 28.09.2021 and assessed the petitioner's

income at Rs. 3,00,17,581/- and created a huge demand of

Rs.3,05,50,996/-. A demand notice of even date under Section

156 of the Act of 1961 came to be issued to the petitioner.

8. Feeling aggrieved of the above assessment order dated

28.09.2021, the petitioner has approached this Court invoking its

extraordinary writ jurisdiction and surpassing the statutory

remedy of appeal on the premise that impugned assessment order

has been passed in violation of the principles of natural justice and

thus, her case falls within the exceptions carved out by Hon'ble

the Apex Court.

9. Mr. Bissa, learned counsel for the respondent - Income Tax

Department at the outset raised objection about maintainability of

the writ petition and contended that the petitioner has wrongly

invoked writ jurisdiction of this Court. He argued that since an

efficacious remedy of appeal under the provisions of Section

246(A) of the Act of 1961 is available, the petitioner cannot

maintain the present petition.

10. It was emphatically submitted by learned counsel for the

respondents that as many as four notices were issued/served

upon the petitioner and as she failed to file satisfactory

explanation/response pursuant to notice dated 27.09.2021, the

Assessing Officer was left with no option but to pass the

assessment order as the matter was getting time barred (on

30.09.2021).

11 Mr. Kothari, learned counsel for the petitioner responded to

the preliminary objection by submitting that exercise of writ

jurisdiction is a discretion of the Court and in the present factual

(4 of 8) [CW-14084/2021]

matrix, when the infraction of principles of natural justice is writ

large, the High Court should use such discretion in petitioner's

favour instead of non-suiting her on the ground of availability of

alternative remedy.

12. Navigating the Court through the proceedings and more

particularly, the assessment order, Mr. Kothari highlighted that

after acceptance of petitioner's earlier writ petition on 23.04.2019,

the respondent No. 3 came into action only on 13.02.2021 and

even after receiving the reply, the Assessing Officer went in

hibernation for seven months and came into action on

13.09.2021.

13. He argued that indisputably, in response to all the

subsequent notices i.e. 19.09.2021, 26.09.2021 and 27.09.2021,

the petitioner had timely responded and that in reply/response so

filed, the petitioner had prayed that copies of impounded

documents etc. be provided so that she can file proper

reply/explanation to the queries raised by the department, yet

nothing was done by respondent No. 3.

14. Learned counsel elaborated his stand by expressing his

concern that on receipt of notice dated 27.09.2021, the petitioner

again made request to provide copies of the impounded

documents and also prayed that personal hearing be provided but

the respondent No. 3 turned a blind eye towards such requests

and has proceeded to pass the assessment order, whereby a huge

demand of tax, interest & penalty has been slapped against the

petitioner.

15. Learned counsel invited Court's attention towards the Notes

on E-proceedings (Page 35 of the paper book) to buttress his

contention that even in case of e-proceedings, hearing may be

(5 of 8) [CW-14084/2021]

conducted manually in a case, where provision under Section 131

of the Act of 1961 has been invoked.

16. Having invited the Court's attention towards factual matrix of

the case, learned counsel submitted that if the petitioner is

relegated to avail the remedy of appeal, she would be required to

comply with the condition of depositing 20% of the demand as a

condition of maintainability of appeal and the same would render

the remedy of appeal as illusory, rather, impossible.

17. Heard learned counsel for the parties and perused the

material on record.

18. There is no gain saying of the fact that the proceedings

initiated against the petitioner vide summons dated 05.03.2019 in

furtherance of the survey that was held on 01.03.2019, has been

quashed by a Single Bench of this Court vide its judgment and

order dated 23.04.2019.

19. While quashing the earlier summons, this Court had granted

liberty to the respondents to take up fresh proceedings in

accordance with law. Since April, 2019 upto 13.02.2021,

respondent No. 3 simply slept over the matter. It is noteworthy

that in response to notice dated 13.02.2021 along with

questionnaire appended therewith, the petitioner had filed

reply/written submissions on 19.02.2021 and while joining the

issue parawise detailed reply/explanation, she had requested that

scanned copies of the impounded documents be provided to her.

20. It is also to be noted that in her reply dated 17.09.2021, the

petitioner had requested to provide reasonable opportunity of

being heard but, the respondent No. 3 neither provided the copies

of the impounded documents nor has he chosen to hear the

petitioner personally.

(6 of 8) [CW-14084/2021]

21. It is also undisputed fact that impugned proceedings

emanated from a survey conducted at petitioner's business

premises, during which various documents were impounded. The

assessment in question is essentially based on such incriminating

material/evidence, which were purportedly unearthed during the

survey proceedings.

22. The proceedings kick-started against the petitioner by way of

summons dated 05.03.2019 came to be quashed by a Single

Bench of this Court vide judgment and order dated 23.04.2019

passed in petitioner's writ petition (S.B. Civil Writ Petition No.

4585/2019). Though, a liberty was granted to the respondents,

but no proceedings worth the name were undertaken by the

respondent No. 3 for considerable period of 2 years and first

notice came to be issued as late as on 13.02.2021.

23. The petitioner has made compliance of the notice so issued

on 13.02.2021 by way of filing parawise reply on 19.02.2021. The

respondent No. 3 thereafter rested on his oars.

24. It was only on 13.09.2021, the respondent No. 3 resumed

the proceedings. The said notice was duly responded by the

petitioner and the same was followed by another identical notice

dated 26.09.2021 requiring the petitioner's response on the very

next date i.e. 27.09.2021. On 27.09.2021, though the respondent

No. 3 had received the petitioner's request/reply, he again issued

a notice requiring the petitioner to appear and furnish above

information on 28.09.2021 by 4.50 p.m.

25. Even on 28.09.2021, the petitioner requested to adjourn the

hearing and provide copies of the documents and accord

opportunity of personal hearing, but the same was not acceded to.

(7 of 8) [CW-14084/2021]

26. A perusal of the notes on e-proceedings reveals that in case

of proceedings under Section 131 of the Act of 1961, a manual

hearing may take place. In the facts of the present case, when

the assessment proceedings were triggered in furtherance of a

survey conducted at petitioner's business premise, during which

various incriminating material was found against the petitioner

and documents were impounded, it was incumbent upon the

respondent No. 3 to have atleast provided copies of the

impounded documents so as to enable her to defend her case.

27. It is a matter of great concern that such genuine request of

the petitioner has not been heeded to by the respondent No. 3 let

alone providing personal hearing.

28. In our opinion, the respondent No. 3 has passed the

impugned order in flagrant violation of the principles of natural

justice, which are fundamental to the rule of law.

29. It is a settled proposition of law that grant of opportunity of

hearing is not an empty formality. In the present case,

respondents' stand that opportunity of hearing was afforded to the

petitioner, is not correct - such opportunity is a farce. Issuance of

notices dated 13.09.2021, 19.09.2021, 26.09.2021 & 27.09.2021

by the respondent No. 3 is like reinventing the wheel.

30. The impugned assessment order dated 28.09.2021 which

has been passed in utter disregard to the principles of natural

justice, clearly falls foul to Article 14 of the Constitution of India.

The same deserves to be and is hereby quashed.

31. Having regard to the telling facts and considering the issue

flagged by the respondent No. 3 and the notes on e-proceedings,

we deem it proper to direct the respondent No. 3 to provide

(8 of 8) [CW-14084/2021]

opportunity of personal hearing to the petitioner, after providing

copies of the desired documents.

32. The respondent No. 3 is directed to provide scanned copies

of the impounded documents and other documents to the

petitioner within a period of 7 days from today.

33. While providing copies of the documents, the respondent

No. 3 would allow atleast 7 days time to the petitioner to file her

explanation / reply to the questionnaire/notice. On receipt of the

documents/reply, the respondent No. 3 shall provide personal

hearing to the petitioner and her authorised representative/

counsel and finalize the proceedings within a period of 15 days.

34. With the directions aforesaid, the writ petition stands

allowed.

35. The stay application also stands disposed of accordingly.

                                   (DINESH MEHTA),J                                      (PANKAJ MITHAL),CJ



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