2020 (6) TMI 411 - HC - Income Tax

Notice u/s 143(2) issued electronically to the petitioner firm - petitioner did not respond to the notices issued u/s 142(1) of the IT Act - contention of petitioner that the Partner of the petitioner, who has filed the writ petition, is an illiterate person not having computer knowledge and at the time of filing the first income tax return of the firm, he had given mobile number and mail address of the son of another partner for primary communication and has given auditor s mobile number and mail address for secondary communication - earlier notices which were received by the son of the other partner had not been forwarded by the said individual to the petitioner because of which, there was a delay in responding to the notices issued - whether 3rd respondent completed the assessment for the assessment year 2017-18 in a hurried manner depriving the petitioner of opportunity to file objections though there was ample time till 31.12.2019 for him to complete the assessment? - HELD THAT - Prima facie, we are of the opinion that the action of the 3rd respondent is arbitrary as he ought to have granted time till 20.12.2019 to the petitioner to file objections and documents. Accordingly, the impugned assessment order dated 15.12.2019 issued by the 3rd respondent is set aside and the matter is remitted back to the 3rd respondent to pass a fresh order in accordance with law; and the petitioner is granted two weeks time from the date of receipt of a copy of this order to file objections and documentary evidence in support of his contentions before the 3rd respondent, which shall be considered by the 3rd respondent before he passes a fresh order. WP allowed.

Summary

Issues:
1. Assailing the order passed by the 3rd respondent under Section 143(2) of the Income Tax Act.
2. Allegation of non-response to notices under Section 142(1) of the IT Act.
3. Claim of lack of communication leading to delayed responses.
4. Allegation of arbitrary action by the 3rd respondent.
5. Request for setting aside the impugned assessment order and remitting the matter for a fresh order.

Analysis:
1. The petitioner challenged the order passed by the 3rd respondent under Section 143(2) of the Income Tax Act, contending that the notices issued under Section 142(1) were not responded to promptly. The petitioner, an illiterate person, had provided contact details of another partner's son for communication, leading to delays in receiving and responding to the notices.

2. The learned counsel argued that the petitioner had replied to a show cause notice proposing assessment under Section 144 of the IT Act, seeking time till 20.12.2019. Despite the timely response, the impugned assessment order was hastily passed on 15.12.2019, depriving the petitioner of the opportunity to file objections within the given timeframe.

3. Reference was made to circular instructions issued by the Director of Income Tax, highlighting that the facility of electronic submission of documents was available until 29.12.2019. The petitioner's counsel contended that the 3rd respondent could have granted time till 20.12.2019 but proceeded to pass the order prematurely on 15.12.2019.

4. The counter filed by the respondents acknowledged the petitioner's response to the show cause notice dated 09.12.2019, where time was requested to file objections and material. Despite the petitioner's request for time till 20.12.2019, the 3rd respondent completed the assessment hastily, indicating an arbitrary approach in the assessment process.

5. The High Court found the 3rd respondent's actions to be arbitrary, as there was ample time available till 31.12.2019 for completing the assessment. Consequently, the impugned assessment order dated 15.12.2019 was set aside, and the matter was remitted back to the 3rd respondent for a fresh order. The petitioner was granted two weeks to submit objections and evidence before a new order was passed.

6. In conclusion, the writ petition was allowed, with no order as to costs, and any pending miscellaneous petitions were closed as a result of the judgment.