Akbar Hassan V. Assessment Unit, Income Tax Department and Income Tax Officer, Ward 1 and TPS, Udupi

WP/2402/2025

AI Insights

The case involves Akbar Hassan, the petitioner, who challenged the penalty order and demand notices issued by the Income Tax Department under Section 270A and 271AAC of the Income Tax Act, 1961, for the assessment year 2020-2021. The petitioner had previously filed an appeal against the assessment order, which was not considered by the respondents before issuing the penalty. The main legal contention was whether the penalty could be imposed while the assessment order was under appeal, as per Section 275 of the Act. The respondents argued that the petitioner did not timely inform them about the appeal and failed to respond to the notices, leading to the penalty imposition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 817188 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-02-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH; M DILIP
• Assessee Lawyers: S ANNAMALAI
• Keywords: Appeal; Assessment Order; Income Tax Act; Penalty order; Section 270A; Section 275
• Section: 246; 271AAC; 270A; 253; 275; 226; 227

Judgement Text

" - 1 - NC: 2025:KHC:5300 WP No. 2402 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 2402 OF 2025 (T-IT) BETWEEN: AKBAR HASSAN S/O SRI. HASANABBA, AGED ABOUT 44 YEARS, D. NO. 3-22-1-5-1B, SM ORCHID, VTC MULOOR, UCHILA, UDUPI 574 117. OFFICE AT S.M. NURSERY, NH 66, MULOOR, UCHILA, UDUPI 574 117. PAN: ABWPH5107N. …PETITIONER (BY SRI. S. ANNAMALAI, ADVOCATE) AND: 1. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, REP. BY ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME-TAX/ INCOME-TAX OFFICER, INCOME-TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:5300 WP No. 2402 of 2025 2. THE INCOME TAX OFFICER, WARD 1 AND TPS, UDUPI, AAYAKAR BHAVAN, MAPLE ROAD, AADIUDUPI, AMBALAPADI (PO), UDUPI-576 103. …RESPONDENTS (BY SRI. M. THIRUMALESH AND SRI. M. DILIP, ADVOCATES) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO 1) QUASHING THE PENALTY ORDER PASSED UNDER SECTION 270A OF THE ACT DATED 20/03/2023 BEARING DIN-ITBA/PNL/F/270A/2022- 23/1051011292(1) PASSED BY THE RESPONDENT FOR THE AY 2020-21 HEREIN MARKED AS ANNEXURE - A1 AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT ORAL ORDER 1. Heard Sri S. Annamalai, learned counsel for the petitioner and Sri M. Thirumalesh and Sri M. Dilip, learned counsel for the respondents. Perused the writ petition papers. - 3 - NC: 2025:KHC:5300 WP No. 2402 of 2025 2. Learned counsel for the petitioner would submit that petitioner is before this Court under Article 226 of the Constitution of India, questioning the correctness and legality of the order of penalty passed under Section 270A of the Income Tax Act, 1961 (for short 'the Act') as at Annexures-A1 to A3 dated 20.03.2023 for the assessment year 2020-2021 and also computation sheet and demand notices at Annexures B1 to B3 dated 20.03.2023. Learned counsel would further submit that assessment order as at Annexure D was passed against the petitioner on 13.09.2022, and against the said assessment order, the petitioner filed appeal before the Commissioner of Income Tax (Appeals). On 16.11.2022 (Annexure-F) the said filing of appeal was intimated to the 1st respondent/authority under Annexure-H and Annexure-K dated 09.03.2023. But the respondent proceeded to pass penalty order under Section 270A, 270AAC of the Act. Learned counsel placing reliance on Section 275 of the Act, submits that no order imposing penalty could have been passed, when the subject matter is in appeal under - 4 - NC: 2025:KHC:5300 WP No. 2402 of 2025 Section 246 of the Act. Thus he prays for quashing penalty order as well as the demand notices. 3. Per contra, Sri Thirumalesh, learned counsel for the respondent/revenue would submit that petitioner failed to inform the filing of appeal in time. Further he submits that even to the notices, the petitioner failed to reply, as such the respondent/authorities proceeded to pass order under Section 270A and 271AAC of the Act. However, it is submitted that Commissioner has disposed of the appeal and against that, petitioner has filed an appeal before the Tribunal under Section 253 of Act, which is pending consideration. Thus it is prayed to pass appropriate order. 4. Having heard the learned counsel for the parties and on perusal of the entire writ petition papers, I am of the view, that impugned order of penalty and demand notices are opposed to Section 275 of the Act. It is not in dispute that the assessment order was passed against the petitioner on 13.09.2022 and against the said assessment - 5 - NC: 2025:KHC:5300 WP No. 2402 of 2025 order, the petitioner filed appeal on 16.11.2022. Penalty proceedings were initiated by issuance of notice under Annexures-E1 and E2 dated 13.09.2022. The filing of appeal against the assessment order was intimated to respondent/authority only on 09.03.2023. However, Section 275 of the Act makes it clear that no order imposing penalty shall be passed in a case, where the relevant assessment order or other order is subject matter of appeal to the Joint Commissioner (Appeals) or to Commissioner (Appeals) under Section 246 of the Act. 5. In the instant case, in view of filing of appeal by the petitioner against the assessment order dated 13.09.2022, the respondents could not have proceeded with the penalty proceedings. The action of the respondents in imposing the penalty is contrary to the above stated provision. Hence the following :- ORDER a. Writ petition is allowed in part. - 6 - NC: 2025:KHC:5300 WP No. 2402 of 2025 b. Annexure A1 dated 20.03.2023 bearing No.ITBA/PNL/F/270A/2022-23/1051011292(1), Annexure A2 dated 20.03.2023 bearing No.ITBA/PNL/S/270A/2022-23/1045575677(1), Annexure A3 dated 20.03.2023 bearing No.ITBA/PNL/S/156/2022-23/1051005480(1), Annexure B1 dated 20.03.2023 bearing No.ITBA/PNL/F/271AAC(1)/2022-23/1051011296(1), Annexure B2 dated 20.03.2023 bearing No.ITBA/PNL/S/271AAC(1)/2022-23/1045575615(1) and Annexure B3 dated 20.03.2023 bearing No.ITBA/PNL/S/156/2022-23/1051005485(1), are quashed. c. The proceedings initiated by issuance of notice at Annexure E1 dated 13.09.2022 bearing No.ITBA/PNL/d/270/2022-23/1045575677(1) and Annexure E2 dated 13.09.2022 bearing No.ITBA/PNL/S/271AAC(1)/2022-23/1045575615(1), - 7 - NC: 2025:KHC:5300 WP No. 2402 of 2025 shall be proceeded depending on the outcome of the appeal, that is pending before the Tribunal. Sd/- (S.G.PANDIT) JUDGE NG List No.: 1 Sl No.: 44 CT:SNN "