Calcutta High Court slaps ₹20,000 costs on Income Tax officer for issuing notice to non-existent entity twice
The Calcutta High Court recently imposed ₹20,000 as personal costs on an income tax Assessing Officer (AO), Bitan Roy, after the Court found that he had issued an assessment notice to a company that no longer existed after its amalgamation with another entity in 2019. [Orbit Projects Private Limited Vs Income Tax Officer, Ward 5(1), Kolkata & Ors.]
Justice Md. Nizamuddin also found that this was not the first time that AO Roy had issued such a notice to the same non-existing entity.
Rather, it was noted that earlier, in March 2022, the High Court had quashed another notice under Section 148 of the Income Tax Act, 1961 which was issued by the same officer to the same non-existing entity.
The AO’s repeated lapse was not taken well by the Court.
“…. in spite of quashing of such notice by this court on earlier occasion, again the assessing officer has issued the impugned notice dated 27th May, 2022 against the very same non-existing entity. Such conduct reflect, total non-application of mind by the Assessing Officer, namely Bitan Roy, Ward No.V(1), Kolkata, and rather it is contumacious also and in total disregard and defiance of earlier of the order of this court,” the Court said in its March 2 order.
This led Justice Nizamuddin to quash the challenged notice and impose personal costs of ₹20,000 on Roy, which was ordered to be recovered from his salary and paid to the petitioner-company.
This was not the first time that AO Roy found himself at the receiving end of the Court’s ire.
Last month, Justice Nizamuddin imposed costs of ₹10,000 on the same officer for a Section 148 notice issued to another assessee, Silvertoss Vanijya Private Limited.
The Silvertoss case concerned an assessment notice issued to the company by the AO, despite the High Court having quashed similar assessment proceedings in November 2021.
Justice Nizamuddin had criticised the AO for his non-application of mind in the November 2021 order as well.
In the February 8, 2023 order passed subsequently, the judge went on to observe,
“Conduct of the officer as appears that he is not mentally in a position to discharge his duty and that the reason best known to him as appears from his conduct that he is harassing the petitioner by inviting for this unnecessary litigation and cost of which is to be incurred by the petitioner and by the Government also from public exchequer for defending such type of cases.”
This aspect was also factored in by the judge in his March 2 order.
The Court has now also directed that the matter be communicated to the higher authorities for necessary steps.
“Let a copy this order be communicated to the Principal Chief CIT, West Bengal and Sikkim, by the office of the Ministry of Law and Justice, who will take note of this order about the affairs going on in his department and take necessary steps", the latest order stated.
Advocates Avra Mazumder, Ramesh Patodia, Megha Agarwal, and Samrat Das appeared for the petitioner-company. Advocate Smita Das De appeared for the respondents.