Anjanadri Fuel Station, represented by its partner, Hanumanth Rao V. Income Tax Officer, Ward 3(2)(1) and Deputy Commissioner of Income Tax Circle 3(1)(1)

WP/6164/2024

AI Insights

The case involves Anjanadri Fuel Station, represented by its partner Hanumanth Rao, who filed a writ petition against the Income Tax Officer and the Deputy Commissioner of Income Tax. The petitioner challenged the penalty orders and demand notices issued for the Assessment Year 2018-19, arguing that these should be kept in abeyance due to the pending appeals against the original assessment order. The court referenced a similar case, B.S. Uday Shetty, where it was held that penalty orders should be stayed until the appeals are resolved. The respondents contended that the penalty orders were themselves appealable, and thus, the stay should not apply. However, the court sided with the petitioner, citing the precedent set in the Uday Shetty case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 817996 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 14-08-2024
• Assessment Year: misc
• Other Referred Cases: Mr. B.S. Uday Shetty Vs. The Assistant Commissioner of Income Tax - W.P.No.8585/2022 dated 21.04.2022
• Laws Referred To: Constitution of India, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M TIRUMALESH
• Assessee Lawyers: BALRAM RAO
• Keywords: Assessment year 2018-19; Demand notice; Income Tax; Penalty order; Writ petition; Abeyance of Penalty
• Section: 270A; 275; 272A(1)(d); 156; 226; 227

Judgement Text

" - 1 - NC: 2024:KHC:32762 WP No. 6164 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 6164 OF 2024 (T-IT) BETWEEN: ANJANADRI FUEL STATION, REPRESENTED BY ITS PARTNER, HANUMANTH RAO, S/O SRI SHANKAR RAO, AGED ABOUT 39 YEARS, R/A NO.109, DURGAPARAMESHWARI NAGAR, KEREPALYA, HOSAKEREHALLI, BANASHANKARI 3RD STAGE, BENGALURU-560 085. HAVING ITS OFFICE AT SY NO.28/2, KATHA NO. 349/348/308/434, AMRVTHANG MANI ROAD, KONANKUNTE, BENGALURU-560 062. PAN NO.ABHFA9006E …PETITIONER (BY SRI. BALRAM R. RAO, ADVOCATE) AND: 1. INCOME TAX OFFICER, WARD 3(2)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095. 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1), BMTC BUILDING, 80FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095. …RESPONDENTS (V.C.O DATED 14.06.2024, BY SRI.M TIRUMALESH, ADVOCATE) Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:32762 WP No. 6164 of 2024 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, CALLING FOR THE RECORDS OF THE PETITIONERS CASE AND AFTER EXAMINING THE LEGALITY AND VALIDITY THEREOF BE PLEASED TO QUASH AND SET ASIDE THE IMPUGNED ORDER UNDER SEC 270A OF ACT DTD 18.09.2023 IN DIN ITBA/PNL/F/270A/2023- 24/1056251767(1) (ANNEXURE-G) AND NOTICE OF DEMAND ISSUED U/S 156 OF THE ACT DTD 18.09.2023 IN DIN ITBA/PLN/S/156/2023-24/1056249880(1) (ANNEXURE-G1) FOR THE AY 2018-19 AND IMPUGNED ORDER UNDER SEC 272A(1)(d) OF ACT DTD 13.10.2023 IN DIN AND ORDER NO. ITBA/PNL/F/272A(1)(d)/2023-24/1057044932(1) (ANNEXURE-H) AND NOTICE OF DEMAND ISSUED U/S 156 OF THE ACT DTD 13.10.2023 IN DIN ITBA/PNL/S/156/2023-24/1057041710(1) (ANNEXURE-H1) FOR THE AY 2018-19 AND ETC., THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner seeks the following reliefs: “i) Writ of Certiorari or writ in the nature of certiorari or any other appropriate writ order or direction under Article 226 of the Constitution of India; calling for the records of the Petitioners case and after examining the legality and validity thereof be pleased to quash and set aside the impugned order under Section 270A of Act dated 18.09.2023 in DIN:ITBA/PNL/F/270A/2023-24/ 1056251767(1) (Annexure-G) and Notice of Demand issued u/s 156 of the Act dated 18.09.2023 in DIN ITBA/PLN/S/156/2023-24/1056249880(1) (Annexure-G1) for the AY 2018-19 and impugned order under Section 272A(1)(d) of Act dated 13.10.2023 in DIN and Order No. - 3 - NC: 2024:KHC:32762 WP No. 6164 of 2024 ITBA/PNL/F/272A(1)(D)/2023-24/1057044932(1) (Annexure-H) and Notice of Demand issued u/s 156 of the Act dated 13.10.2023 in DIN:ITBA/PNL/S/156/2023- 24/1057041710(1) (Annexure-H1) for the AY 2018-19. (ii) Writ of Mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction under Article 226 of Constitution of India ordering and directing the Respondents by themselves by their subordinates, servants or agents to withdraw and cancel the impugned order under Section 270a of Act dated 18.09.2023 in DIN: ITBA/PNL/F/270A/2023-24/ 1056251767(1) (Annexure-G) and Notice of Demand issued u/s 156 of the Act dated 18.09.2023 in DIN: ITBA/PNL/S/156/2023-24/1056249880(1) (Annexure-G1) for the AY 2018-19 and impugned order under Section 272A(1)(D) of Act dated 13.10.2023 in DIN and Order No. ITBA/PNL/F/272A(1)(D)/2023-24/1057044932(1) (Annexure-H) and Notice of Demand issued u/s 156 of the Act dated 13.10.2023 in DIN: ITBA/PNL/S/156/2023- 24/1057041710(1) (Annexure-H1) for the Ay 2018-19 (iii) A writ of Prohibition or a writ in the nature of Prohibition or any other appropriate writ, order or direction under Article 226 of Constitution of India prohibiting and restraining the Respondents by themselves their sub ordinates, servants and agents from taking any action in furtherance or consequent to impugned order under Section 270A of Act dated 18.09.2023 in DIN ITBA/PNL/F/270A/2023-24/1056251767(1) (Annexure-G) and Notice of Demand issued u/s 156 of the Act dated - 4 - NC: 2024:KHC:32762 WP No. 6164 of 2024 18.09.2023 in DIN: ITBA/PNL/S/156/2023- 24/1056249880(1) (Annexure-G1) for the AY 2018-19 and impugned order under Section 272A(1)(D) of Act dated 13.10.2023 in DIN and Order No. ITBA/PNL/F/272A(1) (D)/2023-24/1057044932(1) (Annexure-H) and Notice of Demand issued u/s 156 of the Act dated 13.10.2023 in DIN: ITBA/PNL/S/156/2023-24/1057041710(1) (Annexure- H1) for the AY 2018-19 of the Act for the Assessment Year 2015-16 passed by Respondents. (iv) Grant the interim relief in terms of prayer (iii) above, and (v) Issue such other order, writ or direction as this Hon’ble Court deems fit.” 2. Heard learned counsel for the petitioner, learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that aggrieved by the Assessment Order dated 30.03.2023 passed by the respondents for the Assessment Year 2018-19, the petitioner filed an appeal on 12.05.2023. It is the grievance of the petitioner that despite pendency of the appeal before the Appellate Authority, the respondents have proceeded to issue penalty notice and show- cause notice followed by the impugned penalty orders and demand - 5 - NC: 2024:KHC:32762 WP No. 6164 of 2024 notice, which are assailed in the present petition inter alia contending that since the appeals were pending, it would be necessary to keep the penalty orders and demand notices in abeyance till disposal of the appeals as held by this Court in the case of Mr. B.S. Uday Shetty Vs. The Assistant Commissioner of Income Tax - W.P.No.8585/2022 dated 21.04.2022. 4. Per contra, learned counsel for the respondents submits that even the impugned penalty orders are appealable orders and as such, keeping the penalty orders and demand notice in abeyance till disposal of the appeal would not arise in the facts and circumstances of the instant case and as such, there is no merit in the present petition and the same is liable to be dismissed. 5. A perusal of Section 275 of the I.T. Act will indicate that there is clear embargo/bar on proceeding to pass penalty order if an appeal is pending on the Assessment Order. As rightly contended by the learned counsel for the petitioner in B.S. Uday Shetty’s case (supra), under identical circumstances, where the petitioner-Assessee did not file an appeal against the Original Assessment Order, this Court came to the conclusion that till disposal of the appeals filed by the Assessee, it is necessary to - 6 - NC: 2024:KHC:32762 WP No. 6164 of 2024 keep the penalty orders and notices in abeyance. In view of the aforesaid facts and circumstances and the judgment of this Court in B.S. Uday Shetty’s case (supra), rendered under identical circumstances, the present petition also deserves to be disposed of keeping penalty orders and demand notices in abeyance till disposal of the appeals filed by the petitioner. 6. In the result, I pass the following: ORDER i. The Writ Petition is allowed. ii. The impugned orders at Annexures-G and H dated 18.09.2023 and 13.10.2023 respectively, and the demand notices at Annexure-G1 and H1 dated 18.09.2023 and 13.10.2023 are hereby kept in abeyance till disposal of the appeals filed by the petitioner. iii. Liberty is reserved in favour of the respondents to proceed further upon disposal of the appeals filed by the petitioner. Sd/- (S.R.KRISHNA KUMAR) JUDGE BMC List No.: 1 Sl No.: 39 "