MR B S UDAY SHETTY V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP/8585/2022

AI Insights

The case involves Mr. B.S. Uday Shetty, the petitioner, who challenged a penalty order and a notice of demand issued by the Assistant Commissioner of Income-Tax, Hassan. The penalty and notice were issued following an assessment order for the year 2018-19, which the petitioner contested. The primary contention was the validity of a single acknowledgment generated for appeals related to two different assessment years, 2018-19 and 2019-20. The petitioner argued that despite the common acknowledgment, the appeal for the assessment year 2018-19 was validly filed. The court, after considering the arguments and the procedural aspects, decided to quash the penalty and the notice, allowing for further verification of the appeal's validity.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 695419 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 21-04-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: ANNAMALAI
• Keywords: Appeal; Assessment Order; Covid-19 pandemic; Notice of demand; Penalty order; Automation; Valid appeal
• Section: 143(3); 274; 270A; 156; 226; 227

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF APRIL 2022 BEFORE THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD WRIT PETITION NO.8585/2022 (T-IT) BETWEEN : MR.B.S.UDAY SHETTY SON OF SRI.B.G.SHRIKANTA SHETTY AGED ABOUT 36 YEARS # 1, SKS ARECANUT TRADING CO., STATION ROAD, BIRUR TALUK CHIKMAGALUR DISTRICT – 577 116 PRESENTLY RESIDING AT # 79/A, 2ND CROSS KOLEGOTE, INDUSTRIAL AREA CHITRADURGA – 577 501. ... PETITIONER (BY SRI. ANNAMALAI.S., ADVOCATE) AND : THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, HASSAN AAYAKAR BHAVAN, 2ND STAGE, BELUR ROAD HASSAN – 573 201 KARNATAKA …RESPONDENT (BY SRI.K.V.ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE PENALTY ORDER PASSED BY THE 2 RESPONDENT UNDER SECTION 270A OF THE INCOME TAX ACT, 1961 DATED 29.03.2022 HEREIN MARKED AS ANNEXURE-A1 AND ETC., THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R The petitioner has impugned the penalty order dated 29.03.2022 under Section 270A of the Income Tax Act, 1961 [for short “I.T. Act”] and the notice of demand under Section 156 of the I.T. Act. The petitioner’s grievance with the impugned order and the notice of demand is that these are notwithstanding the petitioner’s appeal as against the subject assessment order dated 16.04.2021. The petition is taken up for final disposal with the consent of Sri Annamalai, learned counsel for the petitioner, and Sri K V Aravind learned Standing 3 counsel who accepts notice for the respondent given the limited nature of the controversy. After the Assessment Order dated 16.04.2021 under Section 143(3) of the I.T. Act for the assessment year 2018-19, the petitioner is issued with the notice under Section 274 read with Section 270A of the I.T. Act. The petitioner has responded to the show cause notice stating inter alia that the petitioner, being aggrieved by the Assessment Order dated 16.04.2021, proposed to file an appeal before the competent Appellate Authority, but could not file such appeal immediately because of the Covid-19 pandemic and certain technical reasons. However, the petitioner has filed the appeal on 03.09.2021. The petitioner has also filed an appeal against the Assessment Order for the Assessment Year 2018-19. The petitioner’s case is that for the reasons that the petitioner cannot explain, a common 4 acknowledgement has been generated for the Assessment Years 2018-19 and 2019-20. The impugned order is in the premise that there cannot be a single acknowledgement for two appeals and therefore, the appeal by the petitioner would not be a valid appeal, as such, the penalty proceedings has been initiated. Sri Annamalai S., learned counsel for the petitioner, relying upon Form 35 and the acknowledgement, submits that it would be indisputable that the petitioner in terms of the acknowledgement dated 03.09.2021 has availed the appellate remedy insofar as the Assessment Order for the Assessment Year 2018-19 and this would be a valid appeal. Sri. Annamalai states that the petitioner cannot state, without filing an appeal for both the Assessment Years, that a common acknowledgement is filed. 5 On the other hand, Sri K V Aravind, learned counsel for the respondent, submits that it would be difficult to believe that with the automation, there can be two acknowledgements for the two appeals against different Assessment Orders. However, the fact whether the petitioner has filed necessary appeal in time for the Assessment Year 2018-19 can be easily verified and there need not be any hyper-technical approach. Therefore, the petition is disposed of quashing the impugned order dated 29.03.2022 and the consequential notice of demand under Section 156 of the I.T. Act dated 29.03.2022 vide Annexures A1 and A2 with the observation that notice under Section 274 read with Section 270A of the I.T. Act is saved for further decision upon ascertaining whether a valid appeal has been filed or not. It would be open to the Assessing Officer to ascertain about the validity of the appeal and the Assessing Officer can also so ascertain upon calling 6 necessary information from the petitioner and then proceed in accordance with law. Sd/- JUDGE mv "