High Court · 2025

W.P.No.20492 of 2025IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 10.06.2025Coram:The Honourable Mr.Justice KRISHNAN RAMASAMYW.P.No.20492 of 2025and W.M.P.Nos.23139 & 23140 of 2025M/s.Pravena Creations,8/3018, Karuparayan Kovil 1st Street,Pandian Nagar,Tirupur – 641 602.Represented by its Partner Mr.Sivagnanamoorthi...PetitionerVersusAssessment Unit,Faceless Assessment Department,Income Tax Department,2nd Floor, E-Ramp,Jawaharlal Nehru Stadium,New Delhi – 110 003. ...Respondent Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorari calling for the records of the Respondent leading to issuance of impugned order dated 09.03.2023 (vide ITBA/AST/S/147/2022-23/1050541676(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271A/2023-24/1055960503(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271B/2023-24/1055960504(1)) and consequential order dated 25.09.2023 (vide ITBA/PNL/F/270A/2023-24/1056522864(1)) and quash the same.1/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025For Petitioner:Mr.K.M.C.ArunmokanFor Respondent:Dr.B.Ramaswamy,Senior Standing CounselORDERDr.B.Ramaswamy, learned Senior Standing Counsel takes notice for the respondent.

2. With the consent of both sides, this writ petition is taken up for final disposal.

3. The relief sought in this writ petition is to quash the impugned order dated 09.03.2023 (vide ITBA/AST/S/147/2022-23/1050541676(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271A/2023-24/1055960503(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271B/2023-24/1055960504(1)) and consequential order dated 25.09.2023 (vide ITBA/PNL/F/270A/2023-24/1056522864(1)) passed by the respondent.2/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 20254. The brief facts of the case are that the petitioner firm was engaged in the business of manufacturing and supplying of garments. While so, the petitioner firm had incurred heavy loss in their business and that the petitioner firm had surrendered their GST Registration, pursuant to which, the petitioner's GST Registration was cancelled by the Department vide order dated 03.01.2023.

5. Thereafter, the petitioner firm was not involved in any business activities. Hence, the petitioner firm did not file its returns and also, did not check the Income Tax Portal from the year 2023.

6. In this background, the petitioner came to know that its Bank Account was attached by the respondent. When the petitioner enquired the same with its Banker, the petitioner was informed about the issuance of Show Cause Notice dated 26.02.2023 and the impugned Assessment Order dated 09.03.2023 passed by the respondent. Subsequently, the petitioner was issued with the consequential Penalty Proceedings dated 11.09.2023 & 25.09.2023 under Section 271A, 271B and 270A of the Income Tax Act, 1961 (hereinafter referred to as “IT Act”) respectively by the respondent. 3/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025Hence, the petitioner has filed this writ petition.

7. The learned counsel for the petitioner submitted that the show cause notice, impugned order and the consequential penalty proceedings were merely uploaded in the Income Tax Portal. Since the petitioner firm had surrendered their GST Registration and the petitioner's GST Registration was cancelled by the Department as early as on 03.01.2023, the petitioner could not have access over the Income Tax Portal.7.

1. It is further submitted that the petitioner came to know about the attachment of its Bank Account, issuance of show cause notice and the impugned Assessment Order passed by the respondent only through its Banker.7.

2. Therefore, it is submitted that the impugned order and the consequential penalty proceedings passed by the respondents suffer from violation of the principles of natural justice since prior to the passing of impugned order, no opportunity of hearing was provided to the petitioner. 4/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 20257.

3. The learned counsel for the petitioner also submitted that the petitioner is ready and willing to pay a sum of Rs.15 Lakhs to the respondent-Department, in the event, this Court is inclined to quash the impugned order and remand the case back to the respondent for fresh consideration.

8. The learned Senior Standing Counsel appearing for the respondent fairly submitted that since the petitioner has voluntarily come forward to pay a sum of Rs.15 Lakhs to the respondent-Department, the prayer sought for by the petitioner may be considered.

9. Taking into consideration of the submissions made by the learned counsel on either side and upon perusing the materials available on record, there is no dispute on the aspect that show cause notice, impugned order and the consequential penalty proceedings were merely uploaded in the Income Tax Portal which were unnoticed by the petitioner and hence, the petitioner could not file reply to the show cause notice and appear for the personal hearing. 5/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 202510. The facts on record reveal that since the petitioner firm had surrendered their GST Registration and the petitioner's GST Registration was cancelled by the Department as early as on 03.01.2023, the petitioner could not have access over the Income Tax Portal and the petitioner came to know about the attachment of its Bank Account, issuance of show cause notice and the impugned Assessment Order passed by the respondent only through its Banker.

11. In the present case, the respondent has passed the impugned order without even affording any opportunity of hearing to the petitioner. As rightly pointed out by the learned counsel for the petitioner that the impugned order and the consequential penalty proceedings passed by the respondent suffers from violation of the principles of natural justice.

12. Thus, once the order is passed in violation of the principles of natural justice, this Court cannot impose any condition requiring the petitioner to make any deposit. However, since the petitioner has voluntarily come forward to pay Rs.15 Lakhs to the respondent-Department, to which, the learned Senior Standing Counsel for the respondent are also 6/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025agreeable, this Court is inclined to issue the following directions:-(i) The impugned order dated 09.03.2023 and consequential penalty proceedings dated 11.09.2023 & 25.09.2023 passed by the respondent are quashed.(ii) Consequently, the case is remanded back to the respondent for fresh consideration.(iii) Liberty is granted to the petitioner to pay a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs Only) to the respondent-Department, within a period of two weeks from the date of receipt of a copy of this order.(iv) Thereafter, the petitioner shall file its Reply along with supporting documents, within a period of two weeks.(v) On filing of such Reply by the petitioner, the respondent shall consider the same and issue a 14 days clear notice affording an opportunity of personal hearing to the petitioner and thereafter, the respondent shall decide the case in accordance with law, as expeditiously as possible.(vi) So far as the attachment made in petitioner's Bank Account is concerned, it is needless to state that once the impugned order is quashed, the order of attachment cannot survive any longer and the same has to be given a go-by by the respondent-Department. Hence, the respondent-7/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025Department is directed to issue appropriate direction to the petitioner's Banker to de-freeze the petitioner's Bank Account forthwith.

13. With the above directions, this Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petitions are closed.10.06.2025mrr Index: Yes/NoNeutral Citation: Yes/NoSpeaking Order (or) Non-Speaking OrderToAssessment Unit,Faceless Assessment Department,Income Tax Department,2nd Floor, E-Ramp,Jawaharlal Nehru Stadium,New Delhi – 110 003.8/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025KRISHNAN RAMASAMY, J.mrrW.P.No.20492 of 202510.06.20259/9

W.P.No.20492 of 2025IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 10.06.2025Coram:The Honourable Mr.Justice KRISHNAN RAMASAMYW.P.No.20492 of 2025and W.M.P.Nos.23139 & 23140 of 2025M/s.Pravena Creations,8/3018, Karuparayan Kovil 1st Street,Pandian Nagar,Tirupur – 641 602.Represented by its Partner Mr.Sivagnanamoorthi...PetitionerVersusAssessment Unit,Faceless Assessment Department,Income Tax Department,2nd Floor, E-Ramp,Jawaharlal Nehru Stadium,New Delhi – 110 003. ...Respondent Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorari calling for the records of the Respondent leading to issuance of impugned order dated 09.03.2023 (vide ITBA/AST/S/147/2022-23/1050541676(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271A/2023-24/1055960503(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271B/2023-24/1055960504(1)) and consequential order dated 25.09.2023 (vide ITBA/PNL/F/270A/2023-24/1056522864(1)) and quash the same.1/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025For Petitioner:Mr.K.M.C.ArunmokanFor Respondent:Dr.B.Ramaswamy,Senior Standing CounselORDERDr.B.Ramaswamy, learned Senior Standing Counsel takes notice for the respondent.

2. With the consent of both sides, this writ petition is taken up for final disposal.

3. The relief sought in this writ petition is to quash the impugned order dated 09.03.2023 (vide ITBA/AST/S/147/2022-23/1050541676(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271A/2023-24/1055960503(1)), consequential order dated 11.09.2023 (vide ITBA/PNL/F/271B/2023-24/1055960504(1)) and consequential order dated 25.09.2023 (vide ITBA/PNL/F/270A/2023-24/1056522864(1)) passed by the respondent.2/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 20254. The brief facts of the case are that the petitioner firm was engaged in the business of manufacturing and supplying of garments. While so, the petitioner firm had incurred heavy loss in their business and that the petitioner firm had surrendered their GST Registration, pursuant to which, the petitioner's GST Registration was cancelled by the Department vide order dated 03.01.2023.

5. Thereafter, the petitioner firm was not involved in any business activities. Hence, the petitioner firm did not file its returns and also, did not check the Income Tax Portal from the year 2023.

6. In this background, the petitioner came to know that its Bank Account was attached by the respondent. When the petitioner enquired the same with its Banker, the petitioner was informed about the issuance of Show Cause Notice dated 26.02.2023 and the impugned Assessment Order dated 09.03.2023 passed by the respondent. Subsequently, the petitioner was issued with the consequential Penalty Proceedings dated 11.09.2023 & 25.09.2023 under Section 271A, 271B and 270A of the Income Tax Act, 1961 (hereinafter referred to as “IT Act”) respectively by the respondent. 3/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025Hence, the petitioner has filed this writ petition.

7. The learned counsel for the petitioner submitted that the show cause notice, impugned order and the consequential penalty proceedings were merely uploaded in the Income Tax Portal. Since the petitioner firm had surrendered their GST Registration and the petitioner's GST Registration was cancelled by the Department as early as on 03.01.2023, the petitioner could not have access over the Income Tax Portal.7.

1. It is further submitted that the petitioner came to know about the attachment of its Bank Account, issuance of show cause notice and the impugned Assessment Order passed by the respondent only through its Banker.7.

2. Therefore, it is submitted that the impugned order and the consequential penalty proceedings passed by the respondents suffer from violation of the principles of natural justice since prior to the passing of impugned order, no opportunity of hearing was provided to the petitioner. 4/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 20257.

3. The learned counsel for the petitioner also submitted that the petitioner is ready and willing to pay a sum of Rs.15 Lakhs to the respondent-Department, in the event, this Court is inclined to quash the impugned order and remand the case back to the respondent for fresh consideration.

8. The learned Senior Standing Counsel appearing for the respondent fairly submitted that since the petitioner has voluntarily come forward to pay a sum of Rs.15 Lakhs to the respondent-Department, the prayer sought for by the petitioner may be considered.

9. Taking into consideration of the submissions made by the learned counsel on either side and upon perusing the materials available on record, there is no dispute on the aspect that show cause notice, impugned order and the consequential penalty proceedings were merely uploaded in the Income Tax Portal which were unnoticed by the petitioner and hence, the petitioner could not file reply to the show cause notice and appear for the personal hearing. 5/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 202510. The facts on record reveal that since the petitioner firm had surrendered their GST Registration and the petitioner's GST Registration was cancelled by the Department as early as on 03.01.2023, the petitioner could not have access over the Income Tax Portal and the petitioner came to know about the attachment of its Bank Account, issuance of show cause notice and the impugned Assessment Order passed by the respondent only through its Banker.

11. In the present case, the respondent has passed the impugned order without even affording any opportunity of hearing to the petitioner. As rightly pointed out by the learned counsel for the petitioner that the impugned order and the consequential penalty proceedings passed by the respondent suffers from violation of the principles of natural justice.

12. Thus, once the order is passed in violation of the principles of natural justice, this Court cannot impose any condition requiring the petitioner to make any deposit. However, since the petitioner has voluntarily come forward to pay Rs.15 Lakhs to the respondent-Department, to which, the learned Senior Standing Counsel for the respondent are also 6/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025agreeable, this Court is inclined to issue the following directions:-(i) The impugned order dated 09.03.2023 and consequential penalty proceedings dated 11.09.2023 & 25.09.2023 passed by the respondent are quashed.(ii) Consequently, the case is remanded back to the respondent for fresh consideration.(iii) Liberty is granted to the petitioner to pay a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs Only) to the respondent-Department, within a period of two weeks from the date of receipt of a copy of this order.(iv) Thereafter, the petitioner shall file its Reply along with supporting documents, within a period of two weeks.(v) On filing of such Reply by the petitioner, the respondent shall consider the same and issue a 14 days clear notice affording an opportunity of personal hearing to the petitioner and thereafter, the respondent shall decide the case in accordance with law, as expeditiously as possible.(vi) So far as the attachment made in petitioner's Bank Account is concerned, it is needless to state that once the impugned order is quashed, the order of attachment cannot survive any longer and the same has to be given a go-by by the respondent-Department. Hence, the respondent-7/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025Department is directed to issue appropriate direction to the petitioner's Banker to de-freeze the petitioner's Bank Account forthwith.

13. With the above directions, this Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petitions are closed.10.06.2025mrr Index: Yes/NoNeutral Citation: Yes/NoSpeaking Order (or) Non-Speaking OrderToAssessment Unit,Faceless Assessment Department,Income Tax Department,2nd Floor, E-Ramp,Jawaharlal Nehru Stadium,New Delhi – 110 003.8/9 https://www.mhc.tn.gov.in/judis W.P.No.20492 of 2025KRISHNAN RAMASAMY, J.mrrW.P.No.20492 of 202510.06.20259/9