High Court of KeralaSingle Judge2023-09-25Writ petition allowed; Ext.P1, Ext.P2, Ext.P3, ...

Koyambath Puthiya purayil Mohammed Kunhi v. Income Tax Officer, Ward-3, Kannur; Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, Assessment Unit, National E-Assessment Centre, Income Tax Department, New Delhi; Principal Commissioner of Income Tax, Kozhikkode

Case / Petition Number:WP(C) No.28069/2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Dinesh Kumar Singh
Judgment Date: 2023-09-25
Court Decision / Holding: Writ petition allowed. Ext.P1 notice, Ext.P2 order, Ext.P3 notice, and Ext.P4 assessment order quashed. Respondents directed to issue a fresh notice under Section 148A(b) providing seven days or more but not exceeding thirty days for filing the reply, and after considering the reply, to proceed in accordance with law.
Final Disposition: Writ petition allowed; Ext.P1, Ext.P2, Ext.P3, Ext.P4 quashed; fresh Section 148A(b) notice to be issued with seven to thirty days for reply; post-reply, proceed in accordance with law.

Parties to the Case

Appellants / Petitioners

Koyambath Puthiyapurayil Mohammed Kunhi

Respondents

The Income Tax Officer, Ward-3, Kannur, Kannur Aayakar Bhavan, Konnotthumchal, Chovva P.O., PIN-670006
Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, Assessment Unit, National E-Assessment Centre, New Delhi, PIN-110003
The Principal Commissioner of Income Tax, Aayakar Bhavan, Mananchira, Kozhikode, PIN-673001

Legal Representation & Advocates

Counsels for Petitioners

• S. Arun Raj

Counsels for Respondents

• Christopher Abraham (Standing Counsel for the Department)

Case Synopsis & Summary

Koyambath Puthiya purayil Mohammed Kunhi, a Non-Resident Indian employed in Oman, challenged notices issued by the Income Tax Department for the Assessment Year 2018-19 under the IT Act. The Department issued a show-cause notice under Section 148A(b) on 19 March 2022 asserting escaped assessment on the basis of unexplained cash used to acquire immovable properties and a vehicle, and indicating that the petitioner had not filed returns. The notice allotted time to respond up to 24 March 2022, i.e., four days, which the petitioner contends falls short of the statutory seven-day minimum mandated by Section 148A(b). The petitioner claims lack of awareness of Ext.P1, resulting in an ex parte assessment order under Section 148A(d) dated 30 March 2022 and Ext.P3 notice under Section 148 dated 30 March 2022. In March 2023, an assessment order under Section 147 read with Sections 144 and 144B was passed with an addition of Rs. 4,39,00,000/-. Citing Hosdurg Beedi Workers, the petitioner argues the seven-day requirement is mandatory and non-compliance invalidates the proceedings. The respondents do not dispute the seven-day deficiency, conceding the point, and the court ultimately allows the petition. It quashes Ext.P1, Ext.P2, Ext.P3 and Ext.P4, and directs a fresh notice under Section 148A(b) with seven to thirty days for reply, after which the department may proceed as per law, considering the reply.

Provisions of Law Cited

Constitution of India Article 226Section 148A(b) of IT Act, 1961Section 148A(d) of IT Act, 1961Section 148 of IT Act, 1961Section 147 read with Sections 144 and 144B of IT Act, 1961Clause (b) of Section 148A

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner argued that the mandatory seven-day minimum time for response under Section 148A(b) was not provided in Ext.P1 (notice dated 19-03-2022), which did not allow him adequate opportunity to respond within seven days (only four days granted up to 24-03-2022). The seven-day requirement is essential for due process in the show-cause process under 148A(b). The petitioner relied on the Hosdurg Beedi Workers case to contend that such non-compliance vitiates the subsequent actions (Ext.P2, Ext.P3) and the integrity of the assessment process, including the ex parte assessment order.

Contentions of Respondents

The Department did not dispute the factual point that seven days were not granted under Ext.P1; counsel for the Department acknowledged the deficiency. The respondents maintained that the notices and orders were issued under the IT Act and that the matter could be remitted by issuing a fresh notice within seven to thirty days to provide a proper opportunity to respond; however, the specific relief sought was to uphold the correctness of the process, not the deficiency itself.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
Hosdurg Beedi Workers Industrial Service Type Co-operative Society Ltd v. The Income Tax Officer, Kasaragod	—	Positive	Court relied on this precedent to hold that the minimum seven-day period is mandatory under Section 148A(b) and that failure to provide it invalidates the subsequent proceedings.
WP(C) No. 7385/2022 (Delhi High Court)	WP(C) 7385/2022	Positive	Exhibit P7 judgment illustrating the five-to-seven day debate and supporting the mandatory seven-day requirement.
Writ Petition No. 2154/2022 (Mumbai High Court)	Writ Petition No. 2154/2022	Positive	Exhibit P8 judgment used to support the view that insufficient notice period violates due process.
WPC 13984/2023	WPC 13984/2023	Mentioned Only	Judgment dated 23.08.2023 cited in appendix; not explicitly relied upon in the reasoning presented in the extract.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 25[TH] DAY OF SEPTEMBER 2023 / 3RD ASWINA, 1945 ## WP(C) NO. 28069 OF 2023 ## PETITIONER/S: KOYAMBRATH PUTHIYAPURAYIL MOHAMMED KUNHIAGED 52 YEARS S/O KAMAL HAJI, NASEEMA MANZIL, PAVANNOORMOTTA, MAYYIL, THALIPARAMBA, KANNUR, PIN - 670602 BY ADV S.ARUN RAJ ## RESPONDENT/S: - 1 THE INCOME TAX OFFICER, WARD-3, KANNURAAYAKAR BHAVAN, KONNOTHUMCHAL, CHOVVA P.O, PIN - 670006 - 2 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, ASSESSMENT UNIT, NATIONAL E-ASSESSMENT CENTREINCOME TAX DEPARTMENT, 2ND FLOOR, E- RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 - 3 THE PRINCIPAL COMMISSIONER OF INCOME TAXAAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE, PIN - 673001 ## OTHER PRESENT: CHRISTOPHER ABRAHAM-SC-IT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.P.(C) No.28069/2023** **-2-** ## J U D G M E N T Heard Mr S Arun Raj learned Counsel for the petitioner and Mr Christopher Abraham learned Standing Counsel for the Department. 2. The present writ petition under Article 226 of the Constitution of India has been filed by the petitioner for quashing Ext.P1 notice under Section 148A(b), consequential Ext.P2 order passed under Section 148A(d), and issuance of Ext.P3 notice under Section 148 of the Income Tax Act 1961 (for short, ‘IT Act’) issued by the 1[st] respondent. 3. The petitioner is a Non-Resident Indian working in Oman. The 1[st] respondent issued notice dated 19.03.2022 to the petitioner under Section 148A(b) of the IT Act for the Assessment Year 2018-19 informing the petitioner that the income of the petitioner chargeable to tax for the Assessment Year 2018-19 has escaped assessment for the reasons that the **W.P.(C) No.28069/2023** **-3-** petitioner had purchased immovable properties worth Rs.1 crore, Rs.70 lakhs, Rs.2 crore and also purchased a vehicle for Rs.69 lakhs. The petitioner had not filed returns of his income. Therefore, sources of cash utilised for purchasing the immovable properties and vehicles remained unexplained. 4. The case of the petitioner is that the petitioner was unaware of the issuance of Ext.P1 notice dated 19.03.2022 under Section 148A(b) of the IT Act. So, the petitioner could not respond to the above notice. The assessment order, in the on absence of the petitioner's response, was finalised _ex parte_ 30.03.2022 under Section 148A(d) of the IT Act, holding that the petitioner had not filed returns of his income and the source of cash utilised for purchasing the immoveable properties and vehicle remained unexplained. 4.1 The petitioner was also issued with notice dated 30.03.2022 under Section 148 of the IT Act. The petitioner **W.P.(C) No.28069/2023** **-4-** submitted that the petitioner was unaware of the issuance of the Ext.P2 order under Section 148A(d) and Ext.P3 notice under Section 148 of the IT Act. In the meantime, on 26.03.2023, the assessment order under Section 147, read with Sections 144 and 144B of the IT Act, was passed, making an addition of Rs.4,39,00,000/-. 4.2 Learned Counsel for the petitioner submits that the petitioner would confine his argument regarding violation of statutory prescription of seven days' notice under Clause (b) of Section 148A of the IT Act. The said notice Ext.P1 is dated 19.03.2022 and the petitioner was granted time for uploading the reply to the said show cause notice on the e-portal of the Department up to 24.03.2022. 4.3 Learned Counsel for the petitioner submits that Section 148A lays down certain conditions for passing an order under Section 148. Section 148A provides for conducting the **W.P.(C) No.28069/2023** **-5-** inquiry, providing an opportunity before issuing notice under Section 148. Those steps are to be adhered to. Otherwise, notice under Section 148 would be rendered illegal. Subclause (b) of Section 148A specifically provides that show cause notice has to be served to the petitioner by providing an opportunity to be heard within the time not less than seven days and not exceeding thirty days from the date on which such notice is issued. 4.4 In the present case, admittedly, only four days’ time was granted to the petitioner to reply to the show cause notice under Section 148A(b) of the IT Act. Learned Counsel for the petitioner therefore submits that since the mandatory provision of a minimum of seven days’ time was not adhered to by the 1[st] respondent, subsequent proceedings have got vitiated. 4.5 Learned Counsel for the petitioner has placed **W.P.(C) No.28069/2023** **-6-** reliance on the judgment of this Court in _Hosdurg Beedi Workers Industrial Service Type co-operative Society Ltd v. The Income Tax Officer, Kasaragod_[1] . This Court had quashed the assessment order under the same circumstances where the minimum time of seven days was not provided in a notice issued under Section 148A(b). In the said case, the notice was dated 18.03.2022, and time was granted till 24.03.2022 for filing the reply to the show cause notice and hearing. This Court held that five days’ time granted in the show cause notice for filing a reply was against the statutory mandate under Section 148A(b). 5. Mr Christopher Abraham learned Standing Counsel for the Department does not dispute the fact that seven days' time was not granted to the assessee for filing the reply to the notice under Section 148A(b) inasmuch as the notice dated > 1 Judgment dated 23.08.2023 in WPC 13984/2023 **-7-** ## **W.P.(C) No.28069/2023** 19.03.2022 and the assessee was granted time only up to 24.03.2022. 6. In view thereof, the present writ petition is allowed. Ext.P1 notice, Ext.P2 order, P3 notice and Ext.P4 assessment order are quashed. Respondents are directed to issue a fresh notice under Section 148A(b), giving seven days or more time to the petitioner, but not more than thirty days’ time as prescribed under Section 148A(b) for filing the reply and hearing. After considering the reply, the respondents may proceed in accordance with the law. Sd/- DINESH KUMAR SINGH JUDGE jjj **-8-** ## **W.P.(C) No.28069/2023** ## APPENDIX OF WP(C) 28069/2023 PETITIONER EXHIBITS - Exhibit P1 THE TRUE COPY OF THE NOTICE DATED 19-3-2022 ISSUED UNDER SECTION 148A (B) OF THE IT ACT FOR THE AY 2018-19 BY THE 1ST RESPONDENT - Exhibit P2 A TRUE COPY OF THE ORDER DATED 30-3-2022 ISSUED BY THE 1ST RESPONDENT U/S 148A (D) OF THE ACT FOR THE AY 2018-19 - Exhibit P3 A TRUE COPY OF THE NOTICE DATED 30-3-2022 OF THE 1ST RESPONDENT U/S 148 OF THE ACT FOR THE AY 2018-19 - Exhibit P4 A TRUE COPY OF THE ASSESSMENT ORDER DATED 263-2023 PASSED U/S 147 R.W.S 144 AND 144B OF THE ACT BY THE 2ND RESPONDENT FOR THE AY 2018-19 - Exhibit P5 A TRUE COPY OF THE NOTICE DATED 14-11-2023 ISSUED BY THE 2ND RESPONDENT - Exhibit P6 A TRUE COPY OF THE SHOW CAUSE NOTICE DATED 7- 3-2023 UNDER SECTION 144 OF THE ACT GENERATED BY THE 2ND RESPONDENT - Exhibit P7 A TRUE COPY OF THE JUDGMENT DATED 12-5-2022 IN WP(C) NO. 7385 OF 2022 PASSED BY THE HIGH COURT OF DELHI Exhibit P8 A TRUE COPY OF THE JUDGMENT DATED 20-9-2022 IN WRIT PETITION NO. 2154 OF 2022 PASSED BY THE HIGH COURT OF MUMBAI