M E Forge Tech V. The Deputy Commissioner of Income Tax Circle-6(1)(1) and National Faceless Assessment Centre

WP/14823/2024

AI Insights

The case involves M/S M E Forge Tech, a partnership firm, represented by its partner Mr. George Robinson, challenging the validity of an order and penalty notices issued under the Income Tax Act, 1961 for the Assessment Year 2022-2023. The petitioner argued that the show cause notice issued on 11.03.2024 allowed an inadequate response time, exacerbated by the illness of the managing partner, leading to non-compliance. The court agreed that the short response time could have caused prejudice and thus remitted the case for fresh consideration, emphasizing the need to provide sufficient opportunity for the petitioner to respond.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 797073 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 19-06-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: RAVI SHANKAR V
• Keywords: Assessment year 2022-23; Fresh consideration; Income Tax; Penalty notices; Show cause notice
• Section: 143(3); 144B

Judgement Text

" - 1 - NC: 2024:KHC:21938 WP No. 14823 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14823 OF 2024 (T-IT) BETWEEN: 1. M/S M E FORGE TECH A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER MR GEORGE ROBINSON PLOT NO. 234, 11TH MAIN, 3RD CROSS, 3RD PHASE PEENYA INDL. AREA, BANGALORE - 560 058, ALSO AT: G. ROBINSON, S/O GEORGE, AGED 58 YEARS NO. 35A AND 36, GRAPHS GARDEN, PRIMER PATTEL HOTEL, S M ROAD, BANGALORE NORTH, BANGALORE-560 057 … PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-6(1)(1) BANGALORE-560 095 2. NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:21938 WP No. 14823 of 2024 COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003 … RESPONDENTS (BY SRI. M. DILIP, JUNIOR STANDING COUNSEL) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE ORDER PASSED U/S 143(3) R.W.S 144B DTD 22.03.2024 BEARING ITBA/AST/S/143(3)/2023-24/1063144592(1) ISSUED BY THE R-2 FOR THE ASSESSMENT YEAR 2022-23 HERIEN MARKED AS ANNEXURE-A AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has called in question the validity of the order passed under Section 143(3) read with Section Annexure 144B of the Income Tax Act, 1961 for the Assessment Year 2022-2023 at Annexure-'A' dated 22.03.2024. The petitioner has also challenged the penalty notices at Annexures-'A1' and 'A2', both dated 22.03.2024. - 3 - NC: 2024:KHC:21938 WP No. 14823 of 2024 2. Learned counsel for the petitioner submits that during the assessment proceedings, the show cause notice came to be issued on 11.03.2024 fixing the date of compliance by making out reply on 15.03.2024. 3. It is submitted that the period of four days was inadequate and in light of illness of the Managing partner within such time, no reply could have made out, though reply was made out to the earlier notice. 4. It is submitted that the order is passed while observing that assessee is non-responsive to the show cause notice and there have been additions as detailed in para-7.1 and disallowance of expenditure as per the observations made in para 7.2. 5. In light of the admitted fact borne out from the records that show cause notice is dated 11.03.2024 and time for compliance is given only till 15.03.2024, the time period made available being insufficient, the contention of learned counsel for the petitioner that prejudice is caused by such short window provided, requires acceptance. - 4 - NC: 2024:KHC:21938 WP No. 14823 of 2024 6. In light of the nature of conclusion drawn which according to the petitioner could be explained as being untenable on facts, the matter requires to be remitted for fresh consideration. 7. Accordingly, the order at Annexure-'A' dated 22.03.2024 and the penalty notices at Annexures-'A1' and 'A2', both dated 22.03.2024 are set aside. The matter is remitted for fresh consideration to the stage of reply to the show cause notice dated 11.03.2024. 8. However, it is needless to state that the petitioner needs to be afforded sufficient opportunity to make out his reply to the show cause notice. All contentions are kept open. Accordingly, the petition is disposed off. Sd/- JUDGE VGR "