MMG Constructions LLP V. Assessment Unit, Income Tax Department and Assistant Commissioner of Income Tax, Circle 1 (1) and TPS and Joint/Addl CIT, Range - 1, Mysuru and Commissioner of Income Tax Range - 1, Mysuru

WP/12410/2023

AI Insights

The case involves MMG Constructions LLP, which challenged a penalty order issued by the Income Tax Department under Section 271D of the IT Act for the Assessment Year 2018-19. The petitioner argued that the penalty was imposed without a specified time for response to a notice dated 19.05.2023, and despite having prepared a response, it was submitted only after the penalty was imposed. The court found merit in the petitioner's argument, noting the absence of a stipulated response time in the notice and the prompt submission of the response following the notice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 810916 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-06-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: IMDER PAUL BANSAL; VIVEK BANSAL BALACHANDRAN
• Keywords: Assessment year 2018-19; Income Tax Act; Notice; Penalty order; Response
• Section: 271D; 226; 227

Judgement Text

" - 1 - NC: 2023:KHC:22372 WP No. 12410 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JUNE, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12410 OF 2023 (T-IT) BETWEEN: MMG CONSTRUCTIONS LLP, 617, FIRST FLOOR, NEW KANTHARAJA, URS ROAD, CHAMARAJA MOHALLA, KUVEMPUNAGAR, MYSURU - 560 023, PAN: AASFM2837M, (A LIMITED LIABILITY PARTNERSHIP REGISTERED UNDER THE LIMITED LIBAILITY PARTNERSHIP ACT, 2008) THROUGH ITS: MANAGING PARTNER, MR. JAYARAMU, S/O RAMEGOWDA, AGED ABOUT 43 YEARS, OCCUPATION: SERVICE; RESIDING AT: 09, MMG PARADISE, SY NO. 117/1A1, OLD 117/1, SRIRAMPURA, MYSURU - 570 008. ALSO AT: R/O NO. 1597, 2ND CROSS, 'C' BLOCK, NEAR OLD MAMADAVADI ROAD, MAHADEVAPURA, MYSORE. …PETITIONER (BY SRI. IMDER PAUL BANSAL, ALONG WITH SRI. VIVEK BANSAL BALACHANDRAN B S AND AMKYR, ADVOCATES) Digitally signed by SUCHITRA M J Location: High Court of Karnataka - 2 - NC: 2023:KHC:22372 WP No. 12410 of 2023 AND: 1. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, REPRESENTED BY ITS INCOME TAX OFFICER, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI - 110 001. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1 (1) AND TPS, ROOM NO. 113, 1ST FLOOR, REAC, MYSORE REAC, MYSURU - 570 008, KARNATAKA. 3. JOINT/ ADDL CIT, RANGE - 1, MYSURU, REAC, MYSORE REAC, MYSURU - 570 008, KARNATAKA. 4. COMMISSIONER OF INCOME TAX RANGE - 1, MYSURU, REAC, MYSORE REACH, MYSURU - 570 008, KARNATAKA. …RESPONDENTS (BY SRI. E I SANMATHI, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH ANNEXURE H - IMPUGNED PENALTY ORDER DATED 26/05/2023 PASSED BY THE R1 UNDER SECTION 271D OF THE IT ACT FOR THE AY 2018-19 IN DIN NO ITBA/PNL/F/271D/2023-24/1053225863(1) AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - NC: 2023:KHC:22372 WP No. 12410 of 2023 ORDER The petitioner has called in question the correctness of the penalty order dated 26.05.2023 passed under Section 271D of the Income Tax Act, 1961 (for short 'IT Act') for the Assessment Year - 2018-19 at Annexure-H; computation sheet at Annexure-H1 and the Demand Notice dated 26.05.2023 at Annexure-H2. 2. It is submitted that the notice at Annexure-G dated 19.05.2023 was issued but however, no time was specified for furnishing of reply and while the petitioner was getting ready with a detailed reply, the penalty order itself came to be passed on 26.05.2023 at Annexure-H. It is further submitted that in the penalty order at Para-3.7, it is observed that the assessee has not responded to the letter issued on 19.05.2023. 3. Learned counsel for the petitioner submits that to demonstrate their bonafides they were getting ready to respond to the letter dated 19.05.2023 and in fact, response was ready and the petitioner has uploaded the said response at Annexure-J dated 27.05.2023. It is submitted that in the absence of the notice stipulating time within which response to - 4 - NC: 2023:KHC:22372 WP No. 12410 of 2023 be made and as the petitioner was gathering evidence in support of the response, an opportunity may be granted by setting aside the impugned order of penalty at Annexure-H and granting fresh opportunity to make out his case in respect to the notice dated 19.05.2023. 4. Learned counsel Sri. E.I.Sanmathi for the revenue asserts that opportunity has been granted. However, taking note of the notice dated 19.05.2023, in which there is no stipulation of time within which reply was to be made and also taking note that within eight days of the notice, the reply has been uploaded which is one day after the impugned penalty order, case is made out for affording another opportunity for the petitioner to put forth his case. 5. Accordingly, penalty order dated 26.05.2023 at Annexure-H is set aside. Consequently, orders at Annexures- H1 and H2 are set aside. The matter is remitted back to the stage post notice of 19.05.2023. The respondent-Authority to consider the reply filed by the petitioner at Annexure-J and grant an opportunity to file further evidence in support of the said reply at Annexure-J and request for personal hearing. - 5 - NC: 2023:KHC:22372 WP No. 12410 of 2023 If such opportunity is sought for, it may be granted and considered orders to be passed. Accordingly, petition is disposed off. It is needless to state that the order passed requires to consider all contentions of the petitioner. All contentions raised by the petitioner are kept open. Sd/- JUDGE SMJ List No.: 1 Sl No.: 36 "