KUSHALNAGAR CO OPERATIVE BANK LIMITED V. INCOME TAX OFFICER

WP/155/2025

AI Insights

The case involves Kushalnagar Cooperative Bank Limited, which filed a writ petition against the Income Tax Officer and the National Faceless Assessment Centre, challenging an ex-parte assessment order and subsequent attachment orders for the Assessment Year 2022-23. The petitioner argued that due to a change in their Chartered Accountant and failure to update the primary email on the e-filing portal, they did not receive crucial notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961, nor the show-cause notice under Section 144. The respondents acknowledged the ex-parte nature of the order but contended that the notices were sent to the last known email addresses. The court found merit in the petitioner's argument, noting the lack of opportunity for the petitioner to participate in the proceedings, and thus quashed the assessment and attachment orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 746987 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 08-01-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP; M THIRUMALESH
• Assessee Lawyers: RAVISHANKAR
• Keywords: Assessment Order; Ex-parte; Income Tax; Non-receipt of notices; Writ petition; Change of Chartered Accountant
• Section: 144; 142(1); 143(2); 144B

Judgement Text

" - 1 - NC: 2025:KHC:572 WP No. 155 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 155 OF 2025 (T-IT) BETWEEN: KUSHALNAGAR CO OPERATIVE BANK LIMITED NO.1, M M MAIN ROAD, KUSHALNAGAR, KODAGU- 571234. PAN: AAAAK5448B ALSO AT: LOKESH B. B., S/O BASAVANNA, MAJOR, R/AT SHIRANGALA VILLAGE AND POST, KUSHALNAGAR, KODAGU -571234. …PETITIONER (BY SRI. RAVI SHANKAR S. V., ADV.) AND: 1. INCOME TAX OFFICER WARD - 1 MADIKERI-571201. 2. NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:572 WP No. 155 of 2025 JAWAHARLAL NEHRU STADIUM, DELHI-110003. …RESPONDENTS (BY SRI.DILIP M. & SRI M.THIRUMALESH, ADVS.) THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO I) QUASHING THE ORDER PASSED UNDER SECTION 144 R.W.S 144B OF THE ACT DATED 23/03/2024 BEARING ITBA/AST/S/144/2023- 24/1063275568(1) ISSUED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2022-23 HEREIN MARKED AS ANNEXURE- A AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT ORAL ORDER The petitioner, a Co-operative Bank is before this Court, questioning the assessment order passed under Section 144 read with 144B of the Income Tax Act, 1961 (for short “1961 Act”) dated 23.03.2024 for the Assessment Year 2022-23 and also consequential attachment orders. 2. Heard Sri.Ravishankar, learned counsel for the petitioner and Sri.M.Dilip learned counsel for respondents. Perused the writ petition papers. - 3 - NC: 2025:KHC:572 WP No. 155 of 2025 3. Learned counsel for the petitioner Sri.Ravishankar would submit that the assessee-Bank filed its returns for the assessment year 2022-23 on 31.10.2022. Thereafter, notice under Section 143(2) as well as notice under Section 142(1) of 1961 Act was issued and the petitioner failed to file reply or participate in the proceedings due to various unavoidable reasons. It is submitted that the petitioner was audited by a Chartered Accountant for the assessment year 2022-23 whose e-mail was listed as the primary e-mail on the e-filing portal. But, subsequently, the petitioner had to change the Chartered Accountant for the following year and new Chartered Accountant failed to change the primary e-mail, which had resulted in non- receipt of notices stated above. Learned counsel would submit that since the petitioner had not received the notices issued under Section 143(2) and 142(1) or subsequently issued show-cause notice under Section 144 of 1961 Act, he could not reply to any of the notices and could not participate in the proceedings. Therefore, he submits that the petitioner be provided an opportunity to - 4 - NC: 2025:KHC:572 WP No. 155 of 2025 participate in the proceedings and thereafter the respondent-authorities be directed to pass appropriate assessment order. 4. Per contra, learned counsel for respondents would not dispute that the Assessment Order is ex-parte order, but he submits that the respondent-authorities were not aware of the change of Chartered Accountant and since no e-mail address was changed, notices were issued as per Data available, to the e-mail address provided by the assessee as well as his Chartered Accountant. Therefore, he submits that when the petitioner has not utilized the opportunity provided, now it is not open for the petitioner to contend that they need an opportunity to participate in the proceedings. 5. Having heard the learned counsel for the parties and on perusal of the writ petition papers, I am of the view that in the present fact situation, the petitioner is to be provided an opportunity to submit their reply and to - 5 - NC: 2025:KHC:572 WP No. 155 of 2025 participate in the proceedings initiated in pursuance of the notice issued under Section 143(2) of 1961 Act. 6. From the narration of facts, it appears that the petitioner has not received notices issued under Sections 143(3) or 142(1) of 1961 Act, apparently because they had changed the Chartered Accountant which contention requires to be believed in the peculiar circumstances of the case. As the petitioner had no opportunity to file reply or objections or to participate in the proceedings, I deem it appropriate to quash the assessment order and subsequent attachment orders passed, so as to provide an opportunity to the petitioner to file objections to the notices and to participate in the proceedings. 7. Hence the following order: (i) The writ petition is allowed. (ii) Annexure-A bearing No.ITBA/RCV/S/226(3)- 1/2024-25/1071175395(1) dated 12.12.2024; Annexure- A1 bearing No.ITBA/PNL/F/272A(1)(d)/ 2024- 25/1068232683(1) dated 31.08.2024, Annexure-A2 - 6 - NC: 2025:KHC:572 WP No. 155 of 2025 bearing No.ITBA/PNL/F/271AAC(1)/ 2024- 25/1068231642(1) dated 31.08.2024, Annexure-A3 bearing No.ITBA/PNL/F/270A/2024-25/1068232690(1) dated 31.08.2024, Annexure-F bearing No.ITBA/RCV/S/226(3)-1/2024-25/ 1071171291 (1) dated 12.12.2024, Annexure-F1 bearing No.ITBA/RCV/S/226(3)- 1/2024-25/ 1071171293 1) dated 12.12.2024, Annexure- F2 bearing No.ITBA/RCV/S/226(3)-1/2024-25/ 1071171297(1) dated 12.12.2024, Annexure-G bearing No.ITBA/RCV/S/226(3)-1/2024-25/ 1071171294(1) dated 12.12.2024, Annexure-G1 bearing No.ITBA/RCV/S/226(3)- 1/2024-25/ 1071171294(1) dated 12.12.2024, Annexure- G2 bearing No.ITBA/RCV/S/226(3)-1/2024-25/ 1071175395(1) dated 12.12.2024 are quashed. (iii) Fifteen days time is granted to file reply to the notice issued under Section 143(2) of 1961 Act and thereafter respondent No.2 is directed to proceed further in accordance with law and pass appropriate assessment order. - 7 - NC: 2025:KHC:572 WP No. 155 of 2025 (iv) If the respondents have recovered any amount in pursuance of attachment orders as at Annexure-F series and Annexure-G series, the recovered amount would be subject to the outcome of the fresh assessment order that would be passed by respondent No.2. All contentions of the parties are left open. Sd/- (S.G.PANDIT) JUDGE MPK CT:bms List No.: 1 Sl No.: 47 "