M/S AKASH FALCON VENTURES V. INCOME TAX OFFICER CIRCLE 4(1)(1)

WP/20853/2022

AI Insights

The case involves M/s Akash Falcon Ventures, a partnership firm, which filed a writ petition against the Income Tax Officer and other officials, challenging the assessment order and penalty notices issued for the assessment year 2017-18. The petitioner contended that the Show Cause Notice and the earlier notice under Section 148 of the Income Tax Act were not served, thus violating the principles of natural justice. The court, upon finding that the notices were indeed not served, set aside the assessment and penalty orders and remitted the matter back for fresh consideration.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753909 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 04-11-2022
• Assessment Year: misc
• Laws Referred To: Indian Partnership Act 1932, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: VANI
• Keywords: Assessment Order; Ex parte order; Natural Justice; Penalty notice; Writ of Certiorari
• Section: 147; 148; 271F; 271AAC(1); 156; 226; 227

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 4TH DAY OF NOVEMBER, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.20853 OF 2022 (T-IT) BETWEEN: M/S AKASH FALCON VENTURES A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT 1932, HAVING ITS OFFICE AT NO.448, 1ST FLOOR, 2ND CROSS, 9TH MAIN, HAL 3RD STAGE, BANGALORE-560 075. REPRESENTED BY ITS PARTNER, SRI VENKATARAMANA P V, S/O SRI VENKATAPPA, AGED ABOUT 61 YEARS. ...PETITIONER (BY SMT. VANI.H., ADVOCATE) AND: 1 . INCOME TAX OFFICER CIRCLE 4(1)(1) BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK,KORAMANGALA, BENGALURU-560 095. 2 . ADDITIONAL/JOINT/DEPUTY /ASSISTANT COMMISSIONER OF INCOME TAX NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001 …RESPONDENTS (BY SRI. E.I. SANMATHI., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF CERTIORARI TO SET-ASIDE THE ASSESSMENT ORDER BEARING NO.ITBA/AST/S/147/2021-22 / 1041075035(1) DATED 19.03.22 FOR THE ASSESSMENT YEAR 2017-18 ALONG WITH THE CONSEQUENTIAL DEMAND NOTICE UNDER SECTION 156 OF THE ACT AT ANNEXURE-E PASSED BY THE SECOND RESPONDENT AND ETC. 2 THIS W.P. COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER In this petition, petitioner has sought for the following reliefs: a) Issue a writ of certiorari or direction in the nature of writ of certiorari to set-aside the assessment order bearing No.ITBA / AST / S / 147 / 2021-22 / 1041075035 (1) dated 19.03.2022 for the assessment year 2017-18 along with the consequential demand notice under Section 156 of the Act at Annexure-E passed by the second respondent; b) Issue a writ of certiorari or direction in the nature of writ of certiorari to set-aside the order bearing No.ITBA / PNL / F / 271F / 2022-23 / 1045374539(1) dated 10.09.22 levying penalty under Section 271 F of the Act at Annexure-F and order bearing No.ITBA / PNL / F / 271AAC(1) / 2022-23 / 1045787760(1) dated 21.09.2022 levying penalty under section 271AAC(1) of the Act at Annexure-G for the assessment year 2017-18 both passed by the first respondent; c) Issue a writ of mandamus or a direction in the nature of writ of mandamus directing the respondents to afford reasonable opportunity to petitioner to rebut the proposals and to pass 3 appropriate orders afresh in accordance with law for the assessment year 2017-18 and d) To pass any other order or direction as deemed fit by this Honourable Court, to meet the ends of justice and equity. 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. It is the specific contention of the petitioner that the Show Cause Notice dated 07.03.2022 said to have been issued by the respondents was not served upon the petitioner and as such, the impugned order passed without providing sufficient or reasonable opportunity to the petitioner to file objections / reply to the Show Cause Notice, is violative of principles of natural justice and the same deserves to be quashed. It is also submitted that even the earlier notice dated 28.03.2021 under Section 148 of the Income Tax Act was also not served upon the petitioner and as such, the impugned Assessment Order and consequential penalty notice deserves to be quashed. 4 4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same deserves to be dismissed. 5. A perusal of the impugned Assessment Order at Annexure – E dated 19.03.2022 will indicate that the same is an ex-parte order, which is passed without the petitioner submitting a reply / response to the Show Cause Notice or producing any documents before the respondents. Under these circumstances, by adopting a justice oriented approach and in view of the specific assertions on the part of the petitioner that neither the notice under Section 148 of the Income Tax Act dated 28.03.2021 at Annexure – A nor subsequent Show Cause Notice at Annexure – D dated 07.03.2022 was served upon the petitioner, in order to provide one more opportunity to the petitioner to submit a reply to the Show Cause Notice along with documents in support of its claim, I deem it just and proper to set aside the impugned assessment order and consequential penalty orders and remit the matter back 5 to the respondents for reconsideration afresh in accordance with law. 6. In the result, I pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned Assessment order dated 19.03.2022 at Annexure – E and consequential Penalty Orders dated 10.09.2022 and 21.09.2022 at Annexures – F and G, respectively, are hereby set aside. (iii) Matter is remitted back to the respondents for reconsideration afresh in accordance with law. (iv) Liberty is reserved in favour of the petitioner to submit its reply along with all relevant documents to the Notice at Annexure – A dated 28.03.2021 as well as Show Cause Notice at Annexure – D dated 6 07.03.2022, which shall be considered by the respondents, who shall pass appropriate orders in accordance with law after providing opportunity of personal hearing in the matter. Sd/- JUDGE SV "