M/S JSSMVP EMPLOYEES HOUSE BUILDING V. THE ADDL/JOINT/DEPUTY/ASST COMMISSIONER OF INCOME TAX

WP/1473/2022

AI Insights

The case involves M/s. JSSMVP Employees House Building Co-op Society No.1, represented by its president, challenging the recovery notices and assessment order issued by the Income Tax Department for the assessment year 2018-19. The petitioner argued that the newly elected board required time to understand and respond to the financial transactions in question, specifically a payment of Rs. 35 crores to M/s. Shambavi Developers. The court found that the petitioner was not given sufficient opportunity to explain the transactions and thus set aside the previous orders, remanding the case for a fresh assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 695337 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 02-02-2022
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: JINITA CHATTERJEE; S PARTHASARTHI
• Keywords: Assessment Order; Income Tax; Non compliance; Opportunity to be heard; Recovery notice; Writ of Certiorari
• Section: 144; 69C

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.1473/2022 (T-IT) BETWEEN: M/s. JSSMVP Employees House Building Co-op Society No.1, Dr. Rajkumar Road JSS Nagar, Mysore - 570 029, Represented by its President Sri. Puttarajappa S Aged about 61 years Son of Sri. Gurumallappa. … Petitioner (By Smt. Jinita Chatterjee & Sri. S. Parthasarthi, Advocates) AND: 1. The Addl/Joint/Deputy/ Asst. Commissioner of Income Tax Government of India Ministry of Finance Income-tax Department National Faceless Assessment Centre Delhi - 110 001. 2 2. The Asst/Deputy Commissioner of Income-tax, Circle 1(1) & TPS, Ministry of Finance Income-tax Department Room No.113, 1st Floor, Ayakar Bhavan REAC, Mysore - 570 008. Karnataka ...Respondents (By Sri. K.V.Aravind, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned recovery notice dtd 21.12.2021 issued by the R-2 for the Assessment Year 2018-19 (Annx.A) and etc., This Writ Petition coming on for Orders, this day, the Court made the following: O R D E R The petitioner has sought for issuance of writ of certiorari to quash the impugned recovery notice at Annexure-A dated 21.12.2021 for the assessment year 2018-19 and Annexure-B dated 28.12.2021 for the assessment year 2018-19. The petitioner has also sought for quashing of the impugned assessment order and demand 3 notice for the assessment year 2018-19 at Annexure-C8 and has sought for further direction to restrain the Department from initiating steps to enforce the demand. 2. The petitioner submits that after initial response to the Department, notice was issued to the assessee alongwith the questionnaire on 10.12.2019 and 31.12.2019 requiring the assessee to furnish details/documents/information regarding payment of Rs.35 crores made to M/s. Shambavi Developers. It is submitted that the assessee has requested for time, as the Board of Directors were newly elected and had taken charge recently and were required to understand the matter for which they required further time. Though subsequent to such request for adjournment, time was granted, the assessee has not furnished sources and details regarding the payments made to M/s. Shambavi Developers and details of expenditures. 3. Show cause notice was also issued on 04.03.2021, but the assessee has not responded to the 4 same and in light of the same, the Assessing Officer has proceeded and completed the assessment proceedings while placing reliance on Section 69C. The petitioner submits that sufficient opportunity ought to have been given in light of the peculiar facts including that the Board of Directors were newly elected and required some time to understand the case in detail. 4. Looking into the order passed, where the Assessing Officer has taken note of non-explanation by the assessee and has proceeded and completed the assessment proceedings under Section 144, it would be appropriate and would meet the interest of justice to afford another opportunity to the petitioner to put forth their case before the Assessing Officer. 5. Accordingly, the assessment order is set aside and matter is relegated to the stage of reply to the notices of the Department dated 22.01.2021, 11.02.2021 and 24.02.2021. The petitioner undertakes to co-operate for 5 expeditious conclusion of the assessment proceedings and is taken note of. Accordingly, the show cause notice cum draft assessment order at Annexure-C7 is set aside and consequently, the assessment order at Annexure-C8 is set aside and so also the recovery notices at Annexures-A and B are set aside. The matter is remitted back to respondent No.1 to commence the matter from the stage of reply to the notices dated 22.01.2021, 11.02.2021 and 24.02.2021. With the above observations, the petition is disposed off. Sd/- JUDGE RKA "