2022 (4) TMI 414 - HC - Income Tax

Reopening of assessment u/s 147 - denial of natural justice - Faceless Assessment Officer (FAO), goes ahead with wanting to conduct a parallel proceedings and passes three hundred plus pages of order on objections without granting a personal hearing but offering to grant a post facto personal hearing - HELD THAT - Despite petitioner bringing to his notice that a personal hearing has been granted by respondent no.1 in Mumbai, the same FAO, who is respondent no.4 herein, continues to go ahead with the proceedings and has issued a letter even on 10th March 2022 as final show cause notice to petitioner. Respondent states that he does not know who the FAO is. The said FAO, whose details shall be disclosed to Mr. Suresh Kumar, shall file an affidavit explaining why he has gone ahead with the proceedings notwithstanding being aware of the order passed by this Court on 17th January 2022. The said FAO shall also file a personal affidavit showing cause as to why contempt proceedings should not be initiated against him and why substantial cost should not be imposed upon him for wasting this Court s precious judicial time due to his conduct/action in breach of orders of this Court. The FAO is given time upto and including 19th March 2022 to file this affidavit. We are making it clear that no further adjournment will be granted and we may even consider imposing substantial cost on the next date. In the meanwhile, respondents shall not take any steps in furtherance of the notices issued by respondent no.4 including the recent one dated 10th March 2022. Stand over to 22nd March 2022 on which date the said FAO shall remain present in Court failing which such order as required to ensure his presence will be passed including issuance of warrant of arrest against him.

Summary

Issues:
Violation of court order by Income Tax Officer, Conduct of Faceless Assessment Officer, Contempt of court proceedings, Imposition of costs for wasting judicial time.

Violation of Court Order by Income Tax Officer:
The High Court noted a case where the Income Tax Officer deliberately disobeyed the court's order despite being aware of it. The Court had set aside an order on objections filed by the petitioner and directed the Jurisdictional Assessing Officer to dispose of the objections after granting a personal hearing to the petitioner. Although the personal hearing was granted, the order on objections was still pending. The Faceless Assessment Officer proceeded with parallel proceedings and issued a lengthy order on objections without granting a personal hearing, breaching the court's orders. The petitioner informed the Faceless Assessment Officer about the personal hearing granted by the Jurisdictional Assessing Officer, but the Faceless Assessment Officer continued with the proceedings, issuing a final show cause notice to the petitioner.

Conduct of Faceless Assessment Officer:
The Faceless Assessment Officer, despite being made aware of the court's order directing a personal hearing, proceeded with the proceedings and issued a show cause notice to the petitioner. The High Court directed the Faceless Assessment Officer to file an affidavit explaining the reasons for proceeding with the case despite the court's order. The Faceless Assessment Officer was given a deadline to file the affidavit, and the Court warned that no further adjournments would be granted. The Court also indicated the possibility of imposing substantial costs if the Faceless Assessment Officer failed to comply.

Contempt of Court Proceedings:
The High Court directed the Faceless Assessment Officer to file a personal affidavit showing cause as to why contempt proceedings should not be initiated against him for disobeying the court's orders. The Court emphasized that the Faceless Assessment Officer must provide a valid explanation for his actions and warned of the potential imposition of substantial costs for wasting the court's time due to his conduct in breach of the court's orders.

Imposition of Costs for Wasting Judicial Time:
The High Court warned that substantial costs could be imposed on the Faceless Assessment Officer if he failed to comply with the court's directives. The Court set a deadline for the Faceless Assessment Officer to file the required affidavit and made it clear that no further adjournments would be granted. The Court scheduled a follow-up date for the Faceless Assessment Officer to appear in court, emphasizing that appropriate measures, including the issuance of a warrant of arrest, would be taken to ensure his presence if necessary. Additionally, the Income Tax Officer (Judicial) was directed to inform the relevant officers about the court's order promptly.

This judgment highlights the importance of compliance with court orders, the consequences of contemptuous behavior, and the potential imposition of costs for wasting judicial time.