Mr. Narayanasetty Srinivasa V. Income Tax Officer, Ward 6 (2)(2) and Assistant Commissioner of Income Tax, Circle 6(2)(1) and National Faceless Assessment Centre and Deputy Commissioner of Income Tax Central Circle 1(3) BLR

WP/23728/2024

AI Insights

The case involves Mr. Narayanasetty Srinivasa, the petitioner, who challenged multiple notices and an assessment order issued by various authorities of the Income Tax Department. The primary contention was that the show cause notice and subsequent orders were issued without proper service and did not provide adequate opportunity for the petitioner to respond, violating the principles of natural justice. The High Court, after hearing the arguments and reviewing the materials, decided to set aside the assessment order and remand the case for a fresh assessment, allowing the petitioner to submit his responses and documents.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 672809 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 30-08-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: ALOKE MADAPPA
• Keywords: Assessment Order; Income Tax; Natural Justice; Show cause notice
• Section: 143(2); 271(1)(c); 156

Judgement Text

" - 1 - NC: 2024:KHC:35080 WP No. 23728 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. 23728 OF 2024 (T-IT) BETWEEN: MR. NARAYANASETTY 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. INCOME TAX OFFICER, WARD 6 (2)(2), INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(2)(1),INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 3. NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E RAMP, JAWARHARLAL NEHRU STADIUM, DELHI 110 003. REP BY ADDITIONAL/JOINT/DEPUTY/ ASST. COMMISSIONER OF INCOME TAX. 4. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(3) BLR, CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU 560 001. …RESPONDENTS (BY SRI.M. DILIP, ADVOCATE) Digitally signed by LEELAVATHI S R Location: High Court of Karnataka - 2 - NC: 2024:KHC:35080 WP No. 23728 of 2024 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED SHOW CAUSE NOTICE DTD. 24.12.2018 BEARING NO. ITBA/AST/F/143(3) (SCN)/20/18-19/1014554659(1) ISSUED BY THE R-2 (ANNX-A) 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 impugned Show Cause Notice dated. 24.12.2018 bearing No.ITBA/AST/F/143(3) (SCN)/20/18- 19/1014554659(1) issued by the 2nd Respondent (ANNXURE- A). ii) Quash the impugned Notice issued under Section 274 read with Section 271 (1)(c) dated 29.12.2018 bearing No. ITBA/PNL/S/271(1)(c)/2018-19/1014661568(1) issued by the 2nd Respondent (ANNEXURE-B). iii) Quash the impugned Notice issued under Section 274 read with Section 271 (1)(c) dated 30.12.2018 bearing No. ITBA/PNL/S/271(1)(c)/2019-20/1016294781(1) issued by the 2nd Respondent (ANNEXURE-C). iv) Quash the impugned Assessment Order bearing No. ITBA/AST/S/143(3)/2018-19/1014661559(1) (ANNEXURE-D) along with Computation sheet bearing No. ITBA/AST/S/114/2018-19/1014661564(1) both dated 30.12.2018 (ANNEXURE-D1) both passed by the 2nd Respondent. v) Quash the impugned Notice of Demand under Section 156 dated 30.12.2018 bearing No. ITBA/AST/S/156/2018- - 3 - NC: 2024:KHC:35080 WP No. 23728 of 2024 19/1014661565(1) issued by the 2nd Respondent (ANNEXURE- D2). vi) Quash the impugned Show Cause Notice for Penalty dated 17.01.2022 under Section 271(10(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)(c)/2021- 22/1038779328(1) issued by the 3rd Respondent (ANNEXURE- E). vii) Quash the impugned Notice for Penalty dated 22.08.2022 under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)(C)/2022- 23/1044843934(1) issued by the 4th Respondent (ANNEXURE-- F). viii) quash the impugned Notice for Penalty dated 22.08.2022 under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)9C)/2022- 23/1044847719(1) issued by the 4th Respondent (ANNEXURE-- G). ix) 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, 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 - 4 - NC: 2024:KHC:35080 WP No. 23728 of 2024 non-speaking order, the details as regards how and when the show cause notice dated 24.12.2018 under Section 143(2) of the Income Tax Act, 1961 (for short, ‘the I.T.Act’) was allegedly served upon the petitioner are conspicuously absent in the impugned order and the 2nd respondent has proceeded to pass the impugned 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. 3.1 Learned counsel for the petitioner submits that he would unconditionally withdraw the appeal filed by him before the appellate authority in relation to the impugned order. The said submission is placed on record. 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 2nd 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 - 5 - NC: 2024:KHC:35080 WP No. 23728 of 2024 paragraph-3 of the impugned assessment order, except stating that the show cause notice under Section 143(2) of the I.T. Act was issued to the petitioner, the 2nd 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 and reasonable opportunity to the petitioner, thereby violating the 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 143(2) 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 six years from the date of the impugned order, in the event, the 2nd respondent passes an order against the petitioner after remand by virtue of this order, the 2nd respondent would be entitled to claim interest on the amount in terms of the Notice of Demand at Annexure-D2 dated 30.12.2018. - 6 - NC: 2024:KHC:35080 WP No. 23728 of 2024 6. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned assessment order at Annexure-D dated 30.12.2018 passed by the 2nd respondent is hereby set aside. (iii) The matter is remitted back to the *4th respondent for reconsideration afresh in accordance with law. (iv) Liberty is reserved in favour of the petitioner to submit his response/reply along with the documents to the *4th respondent, who shall consider the same and proceed further in accordance with law. (v) In the event, the *4th respondent does not accept the response/reply of the petitioner and passes an order against the petitioner, the *4th respondent would be entitled to claim interest on the amount in terms of the Notice of Demand at Annexure-D2 dated 30.12.2018. Sd/- (S.R.KRISHNA KUMAR) JUDGE Srl. *Corrected vide court order dated 17.01.2025. "