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TMI Blog2023 (7) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the substance of his contentions before the respondent authorities. Hence the conduct of respondents would depict there is a partial violation of principles of natural justice. Thus on a conspectus of facts, circumstances, law and conduct of both parties, we, in the interest of justice, are of considered view, the impugned orders can be set aside and the respondents can be directed to accord personal hearing to the petitioner in respect of the contentions raised and pass fresh orders on suitable terms. Accordingly, the writ petitions are allowed setting aside the impugned penalty orders passed by the 1st respondent and matters are remitted back to the 1st respondent with a direction to consider the reply notices submitted by the petitioner and after affording an opportunity of personal hearing to the petitioner pass appropriate orders in accordance with governing law and rules - W.P.Nos.11604, 11593, 11818, 11596 and 11923 of 2022 - - - Dated:- 14-6-2023 - HON BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON BLE SRI JUSTICE T. MALLIKARJUNA RAO For the Petitioner: Sri B. Adinarayana Rao for Sri Javvaji Sarath Chandra and B. Ravi Kiran Singh Learned Counsel. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice baseless. (f) On 19.02.2020 the petitioner filed additional reply to the show cause notice dated 03.01.2020. However, 1st respondent failed to take cognizance of both the replies. (g) In terms of the notification dated 12.01.2021, Faceless Penalty Scheme 2021 was notified by the Central Board of Direct Taxes and accordingly a show cause notice was issued on 24.05.2021 by the National Faceless Assessment Centre to the petitioner. The petitioner submitted reply on 26.05.2021 and also a supplemental reply dated 31.05.2021. Thereafter the petitioner did not receive any communication but a penalty order dated 21.03.2022 was received without granting opportunity of hearing though in the supplemental reply dated 31.05.2021, a specific request was made for personal hearing. (h) The imposition of penalty is in total violation of Sub Clause-XV of Clause-I of para-5 of the Faceless Assessment Scheme. The petitioner submitted its grievance on the portal maintained by respondent No. 2 on 26.03.2022 but same remained unresponded. Hence the writ petition. 3. It may be noted that with the identical averments the petitioner filed W.P. Nos. 11593, 11818, 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has furnished inaccurate particulars of income, the AO has initiated penalty proceedings U/s 271(1)(c) of the IT Act vide notice dated 03.01.2020 but in the said notice it was inadvertently mentioned as for concealment of particulars of income . Having noticed the mistake, the AO has immediately cancelled the notice and issued fresh notice dated 31.01.2020 wherein it has been clearly mentioned that for furnishing inaccurate particulars of income and the notice was served on assessee on 31.01.2020. Subsequently, the penalty proceedings were completed basing on the 2nd notice dated 31.01.2020. The petitioner has conveniently omitted to refer to the fresh penalty notice dated 31.01.2020 and is trying to take shelter under the earlier notice dated 03.01.2020. In fact, the penalty proceedings were completed basing on the 2nd notice dated 31.01.2020. The reply dated 03.02.2020 filed by the petitioner in response to the notice dt: 03.01.2020 is redundant as the said notice was withdrawn. (c) The contention of the petitioner that the penalty order was passed without following the procedure prescribed in the Faceless Penalty Scheme is incorrect. The order imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior Counsel further argued that in the instant case explanation 5A to Section 271 has no application for the reason that as per Clause 1 of explanation 5A, during the course of a search initiated U/s 132, if any money, bullion, jewellery or other valuable article or things were found to be acquired by the assessee by utilizing his income for any previous year or under Clause-ii, the assessee obtained income based on any entry in any books of accounts or other documents or transactions which the assessee claims that such entry in the books of accounts etc., represents his income for any previous year but the same has not been declared in the return of any of the previous year, Clause 5(A) can be invoked. However, that is not the case in the present instance. In the absence of any incriminating evidence disclosing the particulars of income or money, bullion, jewellery or other valuable articles, the question of application of explanation 5A does not arise even remotely. What all found was, learned Senior Counsel would emphasize, a mere claim of excess depreciation which was admitted voluntarily and said mistake was permitted to be rectified by filing revised return. Hence explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act and the same was accepted, the penalty proceedings U/s 271(1)(c) basing on the previous return filed U/s 139 of the IT Act are not maintainable and the proceedings under explanation 5A of Section 271 are also not maintainable since none of the grounds mentioned therein is attracted in the instant case. That apart, the contention of the petitioner is that in spite of submission of aforesaid contentions in his reply notices dated 26.05.2021 and 31.05.2021 and a personal hearing was sought for, neither the contentions in those notices were considered nor petitioner was given an opportunity of personal hearing and therefore principles of natural justice were violated. Whereas the contention of learned Standing Counsel is that the petitioner has deliberately concealed the true facts and furnished inaccurate particulars in his earlier return and unduly claimed excess depreciation amounts and later, the same were rectified not by a voluntary confession but only after search proceedings were conducted. Therefore, the respondent authorities have rightly initiated penalty proceedings U/s 271(1)(c) of the IT Act. It is also the contention of learned Standing counsel that the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed the petitioner has taken the two contentious pleas in his reply notice dated 31.05.2021. Then a perusal of counter filed by the respondents in the writ petition would show that they admitted to have received the reply notices dated 26.05.2021 and 31.05.2021. Of course, they contended that one of the pleas taken in the reply notice dated 31.05.2021 to the effect that the petitioner did not receive the notice dated 31.01.2020 was not correct. Except that the respondents did not deny either receiving of the reply notice dated 31.05.2021 or petitioner s taking the two crucial pleas as narrated supra. 13. Then we referred to impugned penalty orders dated 16.03.2022 and 21.03.2022. In Para 3 of four orders, though reference was made about the reply notices dated 03.02.2020 and 26.05.2021, curiously there was no reference about the crucial reply notice dated 31.05.2021. On one order, of course the reply dated 31.05.2021 was referred. However, we noticed that in the impugned orders the authority of National Faceless Assessment Centre, Delhi, did not mention the two contentions raised by the petitioner and there was no discussion about those pleas. Therefore, there is no occasion for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive remedy of appeal is available, still in the instant case we have noticed partial violation of principles of natural justice by the respondent authorities by depriving the petitioner of personal hearing. It is needless to emphasize, in the cases where the principles of natural justice are on casualty, the constitutional Courts can entertain the writ petitions despite the availability of alternative remedy. There are a slew of legal pronouncements in this regard of which, we can refer to Whirlpool Corporation v. Registrar of Trade Marks, Mumbai AIR 1999SC 22 = MANU/SC/0664/1998 wherein it is held thus: 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundament ..... X X X X Extracts X X X X X X X X Extracts X X X X
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