JSR Logistics and Smt. S. Jyothi Lakshmi V. Assessing Officer, National Faceless Assessment Centre and Prl. Commissioner of Income Tax, National Faceless Assessment Centre and Jurisdictional Assessing Officer, Deputy Commissioner of Income Tax Circle-I and Jurisdictional Principal Commissioner of Income-Tax

WP/1570/2022

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The case involves JSR Logistics and Smt. S. Jyothi Lakshmi, who filed a writ petition against the recovery notice and assessment order issued by the National Faceless Assessment Centre for the Assessment Year 2018-2019. The petitioners argued that due to the death of a key partner and the subsequent operational challenges, they were unable to respond to the notices and communications from the tax authorities. The court considered the impact of the COVID-19 pandemic and technical glitches in communication, leading to the decision to set aside the assessment order and recovery notice, allowing the petitioners another opportunity to present their case.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 805828 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 02-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: ARAVIND CHAVAN
• Keywords: Assessment Order; Covid-19 pandemic; Faceless assessment; Recovery notice; Technical glitch; Unexplained deposit; Writ of Certiorari
• Section: 142(1); 68; 226; 227

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF FEBRUARY 2022 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.1570/2022 (T-IT) Between: 1. JSR Logistics No.82, Noor Manzil Raghavendra Colony I Block, Hussain Nagar Bellary - 583 101 Firm rep. by Partner Smt. S. Jyothi Lakshmi Business at Bellary closed operating from Bangalore from 2nd Petitioner address. 2. Smt. S. Jyothi Lakshmi W/o P.N. Saravana Aged 46 years R/at No.24, 2nd Cross, Basappa Layout Ramakrishna Ashram Back Gate Gavipuram Extension Bangalore - 560 019. … Petitioners (By Sri Aravind V. Chavan, Advocate) And: 1. Assessing Officer, National Faceless Assessment Centre No.412-413, 1st Floor, Opp. Metro Pillar No.793 Dwarka Mor, New Delhi - 110 059. 2 2. Prl. Commissioner of Income Tax, National Faceless Assessment Centre 4th Floor, Mayur Bhawan, Connaught Circus, New Delhi - 110 001. 3. Jurisdictional Assessing Officer, Deputy Commissioner of Income Tax Circle-I, Aayakar Bhavan, Staff Road Fort, Bellary - 583 102. 4. Jurisdictional Principal Commissioner of Income-Tax, Aayakar Bhavan, Sedam Road, Kalaburgi - 585 105. … Respondents (By Sri K.V. Aravind, Advocate for R1 to R4) This Writ Petition is filed under Articles 226 & 227 of Constitution of India, praying to quash the recovery notice dated 08.11.2021 Annexure-G2 and Assessment Order dated 26.04.2021 Annexure-G1, passed by the R-1 for A.Y. 2018-19 and etc. This Writ Petition coming on for orders this day, the Court made the following: ORDER The petitioner has sought for issuance of writ of certiorari to quash the recovery notice at Annexure-G2 dated 08.11.2021 and the Assessment Order dated 26.04.2021 at Annexure-G1 passed by the first respondent for the Assessment Year 2018-2019. 3 2. The petitioner submits that one of the main partners, Mr.P.Tangaraj died on 28.08.2013 and the Firm was left with other partners, who were wife and daughter and therefore they needed time to take over the business. It is submitted that practically the business has come to a stand still and the Firm continues only for the purpose of recovery of dues. It is further submitted that in respect of Assessment Year 2018-2019 for the previous Assessment Year 2017-2018, the petitioner had filed return of income declaring loss, as no business was carried on by the petitioner. It is submitted that the said return was taken up for scrutiny and notices have been issued. The assessee is stated to have furnished details regarding the initial queries. 3. It is further submitted that another show cause notice came to be issued under Section 142(1) of Income Tax Act dated 16.03.2021 calling for the details. Insofar as such show notice is concerned, the petitioner states that there has been some miscommunication and submits that the same would also have been due to the defect in the web 4 site and technical glitch during the relevant period of time and the judicial notice of which could be taken note of. 4. It is further submitted that there was also some confusion insofar as the e-mail address furnished at an earlier point of time related to an employee who had left and necessary steps were taken to furnish the e-mail IDs. to whom the communication ought to have been addressed. 5. Accordingly, it is submitted that in light of the above stated reasons and also in light of the circumstances arising from Covid-19 Pandemic there have been genuine difficulties and for bona fide reasons, the show cause notice dated 16.03.2021 has not been replied to. 6. Taking note of the Assessment Order having been passed while observing that assessee has not filed any reply or response to the notice under Section 142(1) of the Income Tax Act and that the Assessing Officer in terms of Section 68 of the Income Tax Act has treated the deposit of Rs.9,98,82,660/- as unexplained and treated it as deemed 5 income of the assessee and had directed to add the same to the income of the assessee for the Assessment Year 2018-2019, it would meet the interests of justice to provide another opportunity to the petitioner to explain and file his objections regarding the proposed addition of Rs.9,98,82,660/-. 7. Accordingly, taking note of the circumstances referred to above detailing the bona fide lapse on the part of the petitioner, the Assessment Order at Annexure-G1 dated 26.04.2021 is set aside and consequently, the recovery notice at Annexure-G2 dated 08.11.2021 is set aside. The matter is relegated to the first respondent to resume the proceedings from the stage of reply to the show cause notice dated 16.03.2021. With the above observations, the petition is disposed off. Sd/- JUDGE VGR "