Mr. N Srinivasa, Son of Late Narayana Setty V. National E-Assessment Centre and National Faceless Assessment Centre and Deputy Commissioner of Income Tax Central Circle - 1 (3), Bengaluru

WP/23646/2024

AI Insights

In this case, the petitioner, Mr. N Srinivasa, challenged several orders and notices issued by the Income Tax Department, including a show cause notice and an ex-parte assessment order. The petitioner argued that these were issued without proper service and that he was not given adequate opportunity to respond, which violated the principles of natural justice. The respondents, representing the Income Tax Department, contended that the petition lacked merit. The court, after reviewing the submissions and the impugned orders, agreed with the petitioner that the procedural requirements were not met and thus set aside the orders and remanded the matter for fresh consideration.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 805944 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 30-08-2024
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: ALOKE MADAPPA
• Keywords: Ex-parte assessment order; Show cause notice; Violation of Principles of Natural Justice; Writ petition; Assessment Order Set Aside
• Section: 142(1); 270A; 271AAC(1); 272A(1)(d)

Judgement Text

" - 1 - NC: 2024:KHC:35076 WP No. 23646 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 23646 OF 2024 (T-IT) BETWEEN: MR. N SRINIVASA, SON OF LATE NARAYANA SETTY, AGED ABOUT 64 YEARS, RESIDING AT NO.296, 16TH CROSS, SADASHIVANAGAR, BENGALURU - 560 080. …PETITIONER (BY SRI. ALOKE MADAPPA.,ADVOCATE) AND: 1. NATIONAL E-ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL / JOINT/ DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401,2ND FLOOR, E - RAMP, JAWARHARLAL NEHRU STADIUM, DELHI - 110 003. 2. NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL / JOINT/ DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401,2ND FLOOR, E - RAMP, JAWARHARLAL NEHRU STADIUM, DELHI - 110 003. 3. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1 (3), BENGALURU , 3RD FLOOR, C.R. BUILDING, QUEENS ROAD, BENGALURU - 560 001. …RESPONDENTS (BY SRI.M DILIP,ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE SHOW CAUSE Digitally signed by LEELAVATHI S R Location: High Court of Karnataka - 2 - NC: 2024:KHC:35076 WP No. 23646 of 2024 NOTICE DATED 15.04.2021 BEARING NO. ITBA/AST/F/144(SCN)/2021- 22/1032439897(1) ISSUED BY THE 1ST RESPONDENT (ANNEXURE - A) AND QUASH THE EX-PARTE ASSESSMENT ORDER DATED 27.04.2021 BEARING NO. ITBA/AST/S/144/2021-22/1032689182(1) COMPUTATION SHEET DATED 27.04.2021 ALONG BEARING WITH NO. ITBA/AST/S/183/2021-22/1032689201(1) AND THE DE-MAND NOTICE DATED 27.04.2021 BEARING NO. ITBA/AST/S/156/2021- 22/1032689204(1), ISSUED BY THE 1ST RESPONDENT (ANNEXURE B, B1 AND B2) AND ETC., THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “i. Quash the Show Cause Notice dated 15.04.2021 bearing No. ITBA/AST/F/144(SCN)/2021-22/1032439897(1) issued by the 1st Respondent (ANNEXURE - A). ii. Quash the Ex-parte Assessment Order dated 27.04.2021 bearing No. ITBA/AST/S/144/2021-22/1032689182(1) along with Computation Sheet dated 27.04.2021 bearing No. ITBA/AST/S/183/2021-22/1032689201(1) AND the Demand Notice dated 27.04.2021 bearing No. ITBA/AST/S/156/2021- 22/1032689204(1), issued by the 1st Respondent (ANNEXURE B, B1 and B2). iii. Quash the Order under Section 271AAC(1) dated 22.01.2022 bearing No. ITBA/PNL/F/271AAC(1)/2021- 22/1038997655(1) passed by the 2nd Respondent (ANNEXURE - C). - 3 - NC: 2024:KHC:35076 WP No. 23646 of 2024 iv. Quash the Order under Section 272A(1) (d) dated 22.01.2022 bearing No.ITBA/PNL/F/272A(1)(D)/2021-22 /1038997728(1) passed by the 2nd Respondent (ANNEXURE-D). v. Quash the Order under Section 270A dated 29.01.2022 bearing No.ITBA/PNL/F/270A/2021.22/1039188957(1) passed by the 2nd Respondent (ANNEXURE-E). vi. Quash the Rectification Order dated 14.08.2023 bearing No. ITBA/REC/M/154/2023-24/1055827755(1) passed by the 3rd Respondent (ANNEXURE F) and consequent, Notice of Demand dated 14.08.2023 bearing No. ITBA/REC/M/154/2023- 24/1055827816(1) issued by the 3rd Respondent (ANNEXURE - F1) vii. Pass such other or further order as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity.” 2. Heard learned counsel for the parties and perused the material on record. 3. In addition to reiterating various contentions urged in the petition and referring to the material on record, the learned counsel for the petitioner invited my attention to the impugned order in order to point out that apart from the fact that the same is un-reasoned and non-speaking order, the details as regards how and when the notice dated 27.11.2020 under Section 142(1) of the Income Tax Act, 1961 (for short, ‘the I.T.Act’) was allegedly served upon the - 4 - NC: 2024:KHC:35076 WP No. 23646 of 2024 petitioner are conspicuously absent in the impugned order and the 1st respondent has proceeded to pass the impugned ex-parte assessment order without providing sufficient and reasonable opportunity to the petitioner to submit his reply along with the documents, thereby violating principles of natural justice and as such, the petitioner is before this Court by way of present petition. 4. Per contra, learned counsel for the respondents-revenue submits that there is no merit in the petition and that the same is liable to be dismissed. 5. A perusal of the impugned order will indicate that the 1st respondent has not stated the details as to the service of notice upon the petitioner or as to whether the same was uploaded on the portal or sent to the registered e-mail ID of the petitioner. In paragraph-2 of the impugned ex-parte assessment order, except stating that notice under section 142(1) of the I.T. Act was issued to the petitioner, the 1st respondent has not stated as to when the said notice was delivered/served upon the petitioner. Under these circumstances, I am of the considered opinion that the impugned notices, proceedings culminating in the impugned assessment order cannot be said to have been done after providing sufficient - 5 - NC: 2024:KHC:35076 WP No. 23646 of 2024 and reasonable opportunity to the petitioner, thereby violating principles of natural justice and consequently, the impugned order deserves to be set aside by adopting justice oriented approach and to provide one more opportunity to the petitioner to submit his reply to the said notice issued under Section 142 of the I.T.Act and with a direction to the respondents to proceed further in accordance with law. However, it is to be stated that since indulgence is being shown in favour of the petitioner after a lapse of almost three years from the date of the impugned order, in the event, the 1st respondent passes an order against the petitioner after remand by virtue of this order, the 1st respondent would be entitled to claim interest on the amount in terms of the Notice of Demand at Annexure-B2 dated 27.04.2021. 6. In the result, I pass the following:- ORDER (i) The petition is hereby allowed. (ii) The impugned assessment order at Annexure-B dated 27.04.2021 passed by the 1st respondent is hereby set aside. (iii) The matter is remitted back to the *3rd respondent for reconsideration afresh in accordance with law. * Corrected vide Court order dated: 17.01.2025. - 6 - NC: 2024:KHC:35076 WP No. 23646 of 2024 (iv) Liberty is reserved in favour of the petitioner to submit his response/reply along with the documents to the *3rd respondent, who shall consider the same and proceed further in accordance with law. (v) In the event, the *3rd respondent does not accept the response/reply of the petitioner and passes an order against the petitioner, the *3rd respondent would be entitled to claim interest on the amount in terms of the Notice of Demand at Annexure-B2 dated 27.04.2021. Sd/- (S.R.KRISHNA KUMAR) JUDGE Srl. *Corrected vide Court order dated: 17.01.2025. "