M/S. KANAKADAS PATTIN SAHAKARI SANGH NIYAMIT V. THE INCOME TAX OFFICER

WP/146189/2020

AI Insights

The case involves M/s. Kanakadas Pattin Sahakari Sangh Niyamit, represented by its manager, Shri Prashanth, who filed a writ petition against the Tahasildar Office and various Income Tax authorities. The petitioner challenged the assessment order and subsequent recovery proceedings initiated under the Income Tax Act, 1961, for the assessment year 2017-18. The primary grievances were the rejection of the stay application by the first respondent and the issuance of a notice under Section 226(3) of the Act to the petitioner's bank. The court found that the appeal against the assessment order was not considered or disposed of, and the stay application was not properly addressed, leading to a violation of the principles of natural justice.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 754638 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-02-2021
• Assessment Year: misc
• Other Referred Cases: Flipkart India Pvt. Ltd. Vs. Assistant Commissioner of Income Tax (2017) 396 ITR 551
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: H R KAMBIYAVAR; PATRI SHASHIKALA
• Keywords: Assessment Order; Natural Justice; Recovery proceedings; Stay Application; Writ petition
• Section: 144; 270(A); 271 AAC(1); 226(3); 270(F)

Judgement Text

"IN THE HIGH COURT OF KARNATAKA BENGALURU BENCH DATED THIS THE 9TH DAY OF FEBRUARY 2021 BEFORE THE HON’BLE MR. JUSTICE ASHOK S. KINAGI W.P. NO.146189/2020(I-IT) BETWEEN M/S. KANAKADAS PATTIN SAHAKARI SANGH NIYAMIT OPP: TAHASILDAR OFFICE, POST: BADAMI, DIST: BAGALAKOTE, R/BY ITS MANAGER, SHRI.PRASHANTH S/O NAGUSHA SINGRI, AGED: ABOUT 33 YEARS. ...PETITIONER (BY SRI. H R KAMBIYAVAR, ADVOCATE AND SMT. PATRI SHASHIKALA, ADVOCATE) AND 1. THE INCOME TAX OFFICER WARD 1, C.R. BUILDING, NAVANAGAR, BAGALKOTE, 2. THE COMMISSIONER OF INCOME TAX (APPEALS) KIMJI BAI BUILDING, OPP-CIVIL HOSPITAL, BELAGAVI-590001. 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX (ADMINISTRATION), AAYKAR BHAVAN, NAVANAGAR, HUBBALLI-580024. …..RESPONDENTS (By SRI. Y V RAVIRAJ, ADVOCATE) 2 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT, ORDER OR DIRECTION: i) QUASH AS FAR AS THE PETITIONER IS CONCERNED BY AN APPROPRIATE WRIT OR ORDER IN THE NATURE OF CERTIORARI OR OTHERWISE THE IMPUGNED LETTER BEARING NO.AABAK7154M/57/W- 1/BGK/2019-20, 79, DT:29.01.2020 VIDE ANNEXURE-E AND THE NOTICE U/S 226(3) OF THE ACT TO THE MANAGER OF PETITIONER BANK DT:05.03.2020 VIDE ANNEXURE-G ISSUED BY THE 1ST RESPONDENT RESPECTIVELY AND ETC. THIS WRIT PETITION COMING ON FOR HEARING, THIS DAY THE COURT MADE THE FOLLOWING: ORDER The petitioner aggrieved by the order dated 29.01.2020 vide Annexure – E and also notice under Section 226(3) of Income Tax Act, 1961 (for short ‘I.T.Act’), dated 05.03.2020 vide Annexure-G filed this writ petition. 2. The brief facts of the case of the petitioner is that, the first respondent has passed assessment order under Section 144 of I.T. Act, 1964 for the assessment year 2017-18. The petitioner has filed an application for staying the assessment order passed under Section 144 of I.T.Act, 1964 before the first 3 respondent. The application filed by the petitioner for keeping the abeyance the further proceedings against the penalty notice under Section 270(F) of the Act and also penalty notice under Section 271 AAC(1) of the Act and also penalty notice under Section 270(A) of the Act. The petitioner aggrieved by the assessment order passed by the first respondent has preferred the appeal before the second respondent. 3. The petitioner has filed application seeking for stay of the demand for the assessment year 2017- 18 against the assessment order before the first respondent. The first respondent vide order dated 29.01.2020 rejected the stay application. After rejection of application for stay, the first respondent has issued a notice under Section 226(3) of the Act to the Manager of the petitioner Bank on 05.03.2020. The petitioner being aggrieved by the same, has filed this writ petition. 4 4. Heard the learned counsel appearing for the petitioner and also learned counsel appearing for the respondent. 5. The learned counsel appearing for the petitioner submits that the first respondent without considering the contention of the application and memorandum of appeal has passed the impugned order rejected the application for stay. He further submits that the second respondent without considering the law laid down by this court in the case of Flipkart India Pvt. Ltd., Vs. Assistant Commissioner of Income Tax reported in (2017) 396 ITR 551, has passed the impugned order. 6. The learned counsel appearing for the respondent fairly conceded that the second respondent without hearing the petitioner has passed 5 the impugned order. Thus, the impugned order is incontravention of principles of natural justice. 7. After careful evaluation of material available on record, it emerges that the petitioner has filed appeal against the impugned assessment order passed by the assessment authority i.e., first respondent before the second respondent. The said appeal is neither considered, nor disposed of till today and now the first respondent has proceeded to initiate the recovery proceedings. Therefore, in the interest of justice and to safeguard the interest of both the parties without expressing any opinion on merits, it would suffice for this court, if direction would be issued to the second respondent for disposing of the case and if direction issued to the first respondent to consider the stay application afresh and pass appropriate order in accordance with law. 6 8. Accordingly, writ petition is allowed. The impugned order at Annexures- E and G are set aside. 9. The matter is remitted to the first respondent with a direction to reconsider the application for stay and pass appropriate order in accordance with law within one month from the date of receipt of copy of this order. Meanwhile, the respondents are directed not to precipitate in the matter till the disposal of the application for stay. Liberty is also reserved to the petitioner to move the matter before the third respondent. The third respondent is directed to dispose of the said application after hearing the parties. Sd/- JUDGE MNS/ "