M/S M.E. ELECTRICALS PVT. LTD. V. COMMISSIONER OF INCOME TAX

WP/1916/2022

AI Insights

The case involves M/s. M.E. Electricals Pvt. Ltd., which filed a writ petition under Articles 226 and 227 of the Constitution of India against the Commissioner of Income Tax and the Assistant Commissioner of Income Tax. The petitioner sought to quash an assessment order and related documents issued by the tax authorities based on a return filed by a previously engaged chartered accountant, who was later found to be involved in fraudulent activities. The petitioner filed a revised return after re-auditing the books, which was delayed. The court considered the extraordinary circumstances of the case and the statutory provisions under the Income Tax Act for condonation of delay in filing the revised return.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 754203 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 08-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI; K V ARAVIND
• Assessee Lawyers: CHIDANANDA URS
• Keywords: Assessment Order; Condonation of delay; Re-audit; Revised return; Scrutiny assessment; Writ of Certiorari
• Section: 143(2); 119(2)(b); 226; 227; 119(2)(a); 132(B)

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF FEBRUARY, 2022 BEFORE THE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV WRIT PETITION NO.1916 OF 2022 (T - IT) BETWEEN: M/s. M.E. Electricals Pvt. Ltd., 356 & 359, 1st floor, 2nd Main Road, 11th Block, Nagarbhavi 2nd Stage, Bengaluru-560072. Rep. by its Director Sri.Gangadhar S S/p Late K. Somaiah, Aged about 52 years. … Petitioner (By Sri.Chidananda Urs B.G. Advocate) AND: 1. Commissioner of Income Tax, Central Circle 1 (2) Central Revenue Building, No.1, Queens Road, Bangalore-560001. 2. The Asst. Commissioner of Income Tax, Central Circle 1 (2) Central Revenue Building, No.1, Queens Road, 2 Bangalore-560001. ...Respondents (By Sri.E.I.Sanmathi, Advocate) ***** This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned assessment order vide Din and Order dated 17.04.2021 at Annexure-H 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 Assessment Order at Annexure-H issued by respondent No.2, to quash the Computation Sheet at Annexure-H1 and consequently, the Notice of Demand at Annexure-H2 issued by respondent No.2. The petitioner has also sought for condonation of delay in filing the return for the assessment year 2017-18 under section 132(b) of the Income Tax Act, 1961. 2. The petitioner submits that the return that has been filed on 30.10.2018 is through Sri. Nagesh Shastri on 3 behalf of M/s. SSK Associates, Group Auditors and Charted Accountants. It is further submitted that the department had proceeded to complete the assessment proceedings on the basis of the said return filed. It is stated that the petitioner was selected for scrutiny assessment under Section 143(2) of the Income Tax Act and Notice was issued. At that stage, it is stated that the petitioner came to know that the Charted Accountant through whom return was filed at the first instance on 30.10.2018 was engaged in fraudulent activities. Accordingly, steps were taken to re-audit the books of accounts and fresh return came to be filed on 14.07.2020. The present writ petition has been filed seeking for re-opening of the assessment proceedings that has been concluded on the basis of the return filed on 30.10.2018 and seeks the same to be re-done in terms of the return filed on 14.07.2020. 3. Learned counsel for the revenue would point out that the revised return filed was with delay and the Authority 4 for condonation of delay is as prescribed under Section 119(2)(a) and 119(2)(b) of the Income Tax Act. 4. Though the learned counsel for the petitioner submits that in extraordinary circumstance, the Court itself can condone the delay in filing of the revised return, in light of the statutory remedy available, it would be appropriate to relegate the petitioner to seek for condonation of delay in filing the revised return by approaching the Authority in terms of section 119(2)(b) of the Income Tax Act. 5. However, in light of the apprehension of the petitioner regarding recovery proceedings pursuant to the assessment order passed on the return filed on the earlier point of time on 30.10.2018, order could be passed to keep the assessment order passed on 17.04.2021 in abeyance, if the petitioner approaches the requisite authority within the period of two weeks from the date of release of the order and seeks for condonation of delay in filing the revised return. In the interregnum, it would secure the ends of 5 justice, if the petitioner is directed to deposit 10% of the demand at Annexure-H2. Learned counsel Sri. K.V.Aravind accepts notice for the respondents. It is clarified that the direction for deposit of 10% is made taking note of the facts of the present case and is not be construed as laying down a general condition to be imposed in like matters. Sd/- JUDGE PN "