KLE SOCIETY HOSPITAL AND V. PRINCIPAL COMMISSIONER OF INCOME TAX

WP/110318/2019

AI Insights

The case involves KLE Society Hospital and Medical Research Centre, which challenged a demand notice issued by the Income Tax Department for the financial year 2011-12. The petitioner argued that the show cause notice was not received in time to prepare for the hearing, as it was received only a day before the scheduled date. The respondents contended that they had sent an email extending the time for response, but the court found this insufficient as the order was passed the very next day after the notice was received. The court's decision emphasized the need for adherence to the principles of natural justice, particularly the right to a fair hearing.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 761211 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-09-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: GANGADHAR M
• Keywords: Income Tax; Natural Justice; Show cause notice; Survey Proceedings; Writ of Certiorari
• Section: 201(1); 201(1A); 133A(2A)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 9TH DAY OF SEPTEMBER, 2019 BEFORE THE HON’BLE MR. JUSTICE S. SUNIL DUTT YADAV WRIT PETITION NO.110318 OF 2019 (T-IT) BETWEEN KLE SOCIETY HOSPITAL AND MEDICAL RESEARCH CENTRE, NEHRU NAGAR, BELAGAVI-590010, REPRESENTED BY ITS SECRETARY. ... PETITIONER (BY SRI.GANGADHAR J M, ADV.) AND 1. PRINCIPAL COMMISSIONER OF INCOME TAX FEROJ KHIMJIBHAI COMPLEX, OPP: CIVIL HOSPITIAL, DR.AMBEDKAR ROAD, BELAGAVI-590001. 2. ASSISTANT COMMISSIONER OF INCOME TAX (TDS) CIRCLE PANAJI, PUNDALIK NIWAS, GROUND FLOOR, RUO-DE-QUREM PANAJI-GOA. ... RESPONDENTS (BY SRI.Y V RAVIRAJ, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE ORDER DATED 26.03.2019 PASSED BY THE SECOND RESPONDENT PRODUCED AS ANNEXURE-C AND REMIT THE MATTER TO THE SECOND RESPONDENT TO RECONSIDER THE CASE AFTER AFFORDING THE PETITIONER A FAIR OPPORTUNITY. 2 THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING-B GROUP THIS DAY, THE COURT, MADE THE FOLLOWING: ORDER The petitioner who is an assessee has assailed the demand at Annexure-‘D’ whereby the assessee has been called upon to pay Rs.2,16,70,347/- with respect to financial year 2011-12, pursuant to survey proceedings under Section 133A(2A) of Income Tax Act, 1961. 2. It is stated that show cause notice came to be issued at Annexure-‘A’ dated 15.03.2019 calling upon the petitioner to provide for information with respect to financial year 2011-12. It is contended that the said notice was received by the petitioner on 23.03.2019 at 3 p.m. and reference to the same is found in e-mail addressed by the petitioner to the Department on 23.03.2019. Hence, it is submitted that the 3 appearance on 22.03.2019 as stipulated under Annexure-A was not possible. 3. Learned counsel for the respondent- Authority would point out that there was an intimation regarding the hearing on 22.03.2019 by way of e-mail sent to the petitioner on 23.03.2019 and enlarging time till 25.03.2019. However, it is to be noticed that the order itself has been passed on 26.03.2019. The purpose of show cause notice is to provide reasonable opportunity to the assessee to submit his reply. In light of the hearing itself being fixed on 22.03.2019 and petitioner himself receiving the notice on 23.03.2019 and also taking note of the said e-mail which was sent to the petitioner on 23.03.2019, the facts would make out a case that no sufficient opportunity for the petitioner to show cause as regards to the notice at Annexure-A, was afforded. 4 4. Learned counsel appearing for the petitioner also submits that in light of the contradictory communication, there was confusion also as regards the date fixed, it is submitted that the said submission is made without prejudice to the other contentions raised. The facts as narrated above make out of a case of affording fresh opportunity to the petitioner and there after passing an order under Section 201(1) & 201(1A) of Income Tax Act, 1961. In light of violation of principles of natural justice, the order at Annexure-‘D’ is set aside with a direction to pass fresh order after affording an opportunity of hearing to the petitioner. 5. Petitioner to submit necessary reply to the show cause notice at Annexure-A within a period of one week from the date of receipt of certified copy and avail of opportunity from the authority within a week thereafter. The necessary order to be passed thereafter 5 by respondent-Authority. Accordingly, petition is disposed of. Contentions of the parties are kept open. SD/- JUDGE Hmb "