Indian Gymkhana V. National E Assessment/ Faceless Assessment Centre and Income Tax Officer Ward - 1(2)(1)

WP/22979/2022

AI Insights

The case involves M/s Indian Gymkhana, an association of persons, challenging various orders and notices issued by the Income Tax Department under the Income Tax Act, 1961, for the assessment year 2018-19. The petitioner sought to quash the assessment order, computation sheets, and demand notices issued by the respondents, citing violations of procedural norms and principles of natural justice. The core issue revolved around the adequacy of the time provided to respond to a show cause notice, which was found to be less than the stipulated seven days as per the Standard Operating Procedure for faceless assessments. The court referenced a similar case, Chowdappally Dattaprakash Ajay vs. Central Board of Direct Taxes, to support its decision to set aside the impugned orders and remit the matter for fresh consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822395 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-12-2025
• Assessment Year: misc
• Other Referred Cases: Shri. Chowdapally Dattaprakash Ajay vs. Central Board of Direct Taxes and others - W.P.No.12923/2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: RAVI RAJ; M DILIP
• Assessee Lawyers: ANNAMALAI
• Keywords: Assessment Order; Income Tax; Natural Justice; Show cause notice; Writ of Certiorari
• Section: 143(3); 270A; 143(3A); 143(3B); 156

Judgement Text

" - 1 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 22979 OF 2022 (T-IT) BETWEEN: M/S INDIAN GYMKHANA AN ASSOCIATION OF PERSONS REGISTERED UNDER THE MYSORE SOCIETIES REGISTRATION NO. III OF 1904, REPRESENTED BY ITS SECRETARY, SRI. M GOPAL REDDY, S/O SRI. MUNIKRISHNA REDDY, AGED ABOUT 74 YEARS, NO. 05, INDIAN GYMKHANA WHEELERS ROAD, COX TOWN, BENGALURU - 560 005 PAN: AAAAI1252M …PETITIONER (BY SRI. ANNAMALAI S, ADVOCATE) AND: 1. NATIONAL E ASSESSMENT/ FACELESS ASSEMENT CENTRE REP. BY ADDL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2nd FLOOR E RAMP, JAWAHARLAL NEHRU STADIUM DELHI - 110 003. Printed from counselvise.com Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 2. THE INCOME TAX OFFICER WARD - 1(2)(1) BMTC BUILDING , 80 FEET ROAD, 6tH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE - 560 095 …RESPONDENTS (BY SRI. RAVI RAJ Y.V, ADVOCATE AND SRI. M. DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER PASSED BY THE R1 U/S 143(3) READ WITH SECTIONS 143(3A) AND 143(3B) OF THE INCOME TAX ACT,1961 DATED 14.03.2021 BEARING DIN NO- ITBA/AST/S/143(3)/2020-21/1031467475(1) HEREIN MARKED AS ANNEXURE-A1 AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER 1. In this petition, the petitioner seeks the following reliefs: \"a) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the assessment order passed by the Respondent No.1 under section 143(3) read with sections 143(3A) and 143(3B) of the Income Tax Act, 1961 dated 14.03.2021 for the assessment year 2018-19 bearing DIN No. ITBA/AST/S/143(3)/2020- 21/1031467475(1) herein marked as Annexure-A1. b) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the computation sheet issued by the Respondent No.1 dated 14.03.2021 Printed from counselvise.com - 3 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 bearing DIN & Document No. ITBA/AST/S/185/2020- 21/1031467482(1) in respect of the assessment year 2018-19 herein marked as Annexure-A2. c) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice of demand issued under section 156 of the Act by the Respondent No.1 dated 14.03.2021 DIN & Notice No. ITBA/AST/S/156/2020-21/1031467496(1) in respect of the assessment year 2018-19 herein marked as Annexure-А3. d) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order passed under section 270A of the Act by the Respondent No.1 dated 05.02.2022 bearing DIN No. ITBA/PNL/F/270A/2021-22/1039438276(1) in respect of the assessment year 2018-19 herein marked as Annexure-A4. e) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the computation sheet issued by the Respondent No.1 dated 05.02.2022 bearing DIN & Order No. ITBA/PNL/S/270A/2020- 21/1031467524(1) in respect of the assessment year 2018-19 herein marked as Annexure-A5. f) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice of demand issued under section 156 of the Act by the Respondent No.1 dated 04.02.2022 bearing DIN & Notice No. ITBA/PNL/S/156/2021-22/1039434264(1) in respect of the assessment year 2018-19 herein marked as Annexure-A6. g) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.\" Printed from counselvise.com - 4 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 2. Heard learned counsel for the petitioner and learned counsel for respondents and perused the materials on record. 3. In addition to reiterating various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned show cause notice dated 05.03.2021 in order to point out that the said notice stipulate the period of less than 07 days since the petitioner has been called upon to submit his reply by 23.59 hours of 08.03.2021 which is less than stipulated period of 07 days as contained in the Standard Operating Procedure applicable to the impugned show cause notice. It is submitted that in the light of the Order of the Coordinate Bench of this Court in the case of Shri. Chowdapally Dattaprakash Ajay vs. Central Board of Direct Taxes and others - W.P.No.12923/2023 dated 06.07.2023, the impugned Assessment order at Annexure - A1 deserves to be set aside and the matter be remitted back to the concerned Printed from counselvise.com - 5 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 respondents from the stage of petitioner submitting its reply to the show cause notice dated 05.03.2021 and to proceed further in accordance with law. 4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 5. In Chowdappally’s case supra, the co-ordinate Bench of this Court held as under: \"The petitioner has sought for setting aside of the assessment order dated 19.05.2023 passed by respondent No.2 under Section 147 read with Section 144B of the Income Tax Act, 1961 (for short, 1961 Act') at Annexure-A1, setting aside of the computation sheet at Annexure-A2, setting aside of the notice of demand at Annexure-A3 and has also sought for setting aside of the penalty notice at Annexure-A4. The petitioner has also sought for setting aside of the notice under Section 148 of 1961 Act at Annexure-B1, setting aside of notice under Section 148A(b) of 1961 Act at Annexure-B2, setting aside of notice under Section 148A(d) of 1961 Act at Annexure-B3 and the notice under Section 148 of 1961 Act at Annexure-B4. The petitioner has also sought for setting aside the Instruction bearing No.1/2022 dated 11.05.2022 at Annexure-C. 2. Learned counsel for the petitioner submits that the assessment order is liable to be set aside on the sole ground of violation of principles of natural justice as the show cause notice at Annexure-J was issued on Printed from counselvise.com - 6 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 10.05.2023 seeking for reply before 15.05.2023, which time for response is contrary to the SOP applicable for faceless assessment, copy of which is produced at Annexure-T. 3. Attention is drawn to Clause N.1.3 which observes that the time for response to a show cause notice ought to be 7 days from the issue of show cause notice. He submitted that in the assessment order it was observed that there was no reply to the show cause notice and the Assessing Officer has proceed without any reply from the petitioner. It is submitted that in the light of the inadequate time that is available to make out a response which time limit is contrary to the SOP relating to time to be given for response to the show cause notice, it is submitted that the assessment order may be set aside and fresh opportunity may be accorded to the petitioner to make out reply to the show cause notice. 4. Perused the show cause notice at Annexure-J. 5. It is clear that the notice has been issued on 10.05.2023 by 18.14 hours. The response was directed to be made by 15.05.2023. The time that is stipulated for response is in clear violation of the applicable SOP at Clause N.1.3 which requires that at least 7 days time to be given for the purpose of making out a response. 6. It is clear that the plea of prejudice caused to the petitioner and violation of principles of natural justice is a contention that requires acceptance. Accordingly, on the sole ground, the matter is remanded to the stage post show cause notice at Annexure-J dated 10.05.2023. The petitioner is at liberty to make out his reply to the show cause notice at Annexure-J and the Authority to afford all opportunities as is permissible under the law to complete the proceedings. All contention of the petitioner are kept open. Printed from counselvise.com - 7 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 8. Learned counsel for the petitioner submits that the aspect of limitation is also to be kept open. Said submission of the petitioner is taken note of. Accordingly, Annexures-A1 to A4 are set aside. The matter is disposed off subject to the above observations.\" 6. In the instant case, a perusal of the show cause notice would indicate that the same was issued on 05.03.2021 calling upon the petitioner to submit its reply by 23.59 hours of 08.03.2021, which is less than 07 days from the date of issuance of a show cause notice and the same being violative of standard operative procedure as held by the Co-ordinate Bench of this Court in the aforesaid case, I am of the considered opinion that the impugned assessment order and further notices deserve to be set aside and the matter be remitted back to the concerned respondent for reconsideration afresh from the stage of issuing show cause notice in accordance with law. 7. In the result, pass the following: ORDER (i) Petition is allowed. Printed from counselvise.com - 8 - HC-KAR NC: 2025:KHC:52404 WP No. 22979 of 2022 (ii) The impugned orders / Notices at Annexures – A1, A2, A3, A4, A5 and A6 passed / issued by the respondents are hereby set aside. (iii) Matter remitted back to the stage of petitioner submitting reply/additional reply to the notice dated 05.03.2021 issued by respondents with liberty to file additional pleadings, documents etc., which shall be considered by the concerned respondents after providing sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law. Sd/- (S.R.KRISHNA KUMAR) JUDGE GH List No.: 2 Sl No.: 60 Printed from counselvise.com "