Calcutta High Court penalizes income tax officer for issuing notice to non-existent entity twice

Calcutta High Court penalizes income tax officer for issuing notice to non-existent entity twice

The assessing officer Bitan Roy has been ordered to pay a fine of Rs.20,000

As a disciplinary action, the Calcutta High Court has imposed a penalty on an income tax officer. It observed that he issued an assessment notice to a company that no longer existed after its amalgamation in 2019 with another entity.

In the Orbit Projects Private Limited vs Income Tax Officer, Ward 5(1), Kolkata & Ors case, Justice Md. Nizamuddin also found that it was not the first time that the Assessing Officer (AO) Bitan Roy had issued such a notice to the same non-existing entity.

The court noted that in March 2022, another notice was quashed under the Income Tax Act, 1961. The same officer had issued the notice to the same non-existing entity. Hence, the court did not appreciate the repeated lapse of the AO.

The bench stated, “In spite of quashing such notice by this court earlier, again the AO issued the impugned notice dated 27 May 2022, against the same non-existing entity. Such conduct reflects total non-application of mind by the AO, namely Bitan Roy, Ward No.V (1), Kolkata. It is contumacious and in total disregard and defiance of the earlier court order.”

Thus, Justice Nizamuddin quashed the challenged notice and imposed a personal cost of Rs.20,000 on Roy. He ordered the amount to be recovered from Roy’s salary and paid to the petitioner company.

This was not the first time that the AO was at the receiving end of the court’s ire. Recently, Justice Nizamuddin imposed Rs.10,000 fine on Roy for a Section 148 notice issued to Silvertoss Vanijya Private Limited, another assessee.

Despite the court quashing similar assessment proceedings in November 2021, the AO had again sent an assessment notice to Silvertoss.

Then too, the court had criticized the AO while observing, “The conduct of the officer appears that he is not mentally in a position to discharge his duty. It 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 the public exchequer for defending such type of cases.”

Directing that the matter be communicated to the higher authorities, the high court bench has now stated, “Let a copy of 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."

While advocates Avra Mazumder, Ramesh Patodia, Megha Agarwal, and Samrat Das appeared for the petitioner company, the respondents were represented by advocate Smita Das De.