Succeeding Officer Should Put Assessee on Notice & Hear Assessee Before Cancellation of Registration | HC

Case Details: Ajit Associates Architectural Consultants (P.) Ltd. v. Assistant Commissioner - [2023] 153 taxmann.com 269 (Kerala)

Judiciary and Counsel Details

• • T.R. Ravi, J.
  • Harisankar V. Menon, Smt Meera V. Menon, R. Sreejith & K. Krishna, Advs. for the Petitioner. 
  • Dr Thushara James & S. Manu for the Respondent.

Facts of the Case

The assessee was an architectural services provider and it had been filing their returns and paying tax regularly till August, 2017. Thereafter, there was a default in filing of returns and it received notice due to non-filing of return. After receipt of notice, it started taking steps to regularise returns but its registration was cancelled during year 2021 pursuant to a show cause notice issued in 2017. It filed writ petition against the cancellation of registration.

High Court Held

The Honorable High Court noted that the concerned accountant of assessee did not file an effective reply to show cause. However, the assessee had since filed returns of defaulted periods and returns had been regularised till February 2021. But, there had been no hearing by the proper officer who issued cancellation order.

Also, it was settled law that if an authority is succeeded by another authority, the succeeding officer should inform assessee about proposal to continue proceedings. The Court further noted that the requirement that succeeding Officer should put assessee on notice is better emphasised by usage of words “proper Officer” in proviso to section 29(2). Therefore, it was held that the petitioner was entitled to relief and cancellation order was liable to be quashed and since petitioner had already submitted returns for periods of default, necessary order should be issued treating petitioner’s registration as not cancelled.

List of Cases Reviewed

• • CIT v. Smt. Chitra Mukerjee [1981]5 Taxman 297/127 ITR 252 (Cal.);
  • Anantha Naganna Chetty v. CIT [1970] 78 ITR 743 (A.P.);
  • Commissioner of Wealth Tax v. Smt. Azizunnissa Begum [1979] 119 ITR 376 (A.P.);
  • CIT v. M.Sreedharan [1992] 62 Taxman 344/[1991] 190 ITR 604 (Ker.) and
  • Commissioner of Wealth-tax v. Sri Jagdish Prasad Choudhary [1995] 211 ITR 472 (Pat.) (para 10) followed.

List of Cases Referred to

• • Commissioner of Wealth-tax v. Sri Jagdish Prasad Choudhary [1995] 211 ITR 472 (Pat.) (para 5),
  • CIT v. Smt. Chitra Mukerjee [1981] 5 Taxman 297/127 ITR 252 (Cal.) (para 5),
  • Commissioner of Wealth Tax v. Smt. Azizunnissa Begum [1979] 119 ITR 376 (A.P.) (para 5),
  • Anantha Naganna Chetty v. CIT [1970] 78 ITR 743 (A.P.) (para 5) and
  • CIT v. M.Sreedharan [1992] 62 Taxman 344/[1991] 190 ITR 604 (Ker.) (para 9).