Mr. Sunil H. Ashar and Mrs. Alpa H. Ashar and M/s. Vardhman Metals and Mrs. Jagruti S. Ashar and M/s Kothari Metals V. Income Tax Officer Ward 9(3) and Income Tax Officer Ward 1(4)

WP/7001/2015

AI Insights

This case involves multiple writ petitions filed by different petitioners against the reassessment orders and demand notices issued by the Income Tax Officer for the assessment years 2007-08 and 2009-10. The petitioners challenged the reassessment orders under Articles 226 and 227 of the Constitution of India, claiming that the orders were passed without providing them an opportunity to respond to the allegations based on statements made by third parties. The court examined whether the reassessment proceedings adhered to the principles of natural justice, particularly focusing on the lack of opportunity given to the petitioners to contest the basis of the reassessment. The court's decision emphasized the necessity of fair hearing and due process in tax assessment proceedings.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 671736 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-06-2015
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND; JEEVAN NEERALGI
• Assessee Lawyers: HARISH
• Keywords: Assessment Order; Income Tax; Natural Justice; Reassessment; Writ petition
• Section: 147; 148; 143(3)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 24th DAY OF JUNE, 2015 BEFORE THE HON'BLE MR. JUSTICE RAM MOHAN REDDY WRIT PETITION NO. 7001/2015 C/W WP NOS. 7003/2015, 7933/2015, 7002/2015, 7931/2015,7936/2015 (T-IT) IN WP NO. 7001/2015 BETWEEN: MR. SUNIL H. ASHAR S/O LATE HARIDAS ASHAR, AGED ABOUT 45 YEARS, RESIDING AT - C/O A-1 CORPORATION, NO.17, SRI BLAJI MARKET, 199/200, R.T STREET, BANGALORE – 560 053. ... PETITIONER (By Sri. HARISH V.S, ADV.,) AND INCOME TAX OFFICER WARD 9(3), 3RD FLOOR, JEEVAN SAMPIGE, LIC BUILDING, SAMPIGE ROAD, MALLESHWARAM, BANGALORE – 560 003. ... RESPONDENT (By Sri. K.V ARAVIND, ADV.,) 2 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT U/S.143 (3) R.W. SECTION 147 OF THE INCOME TAX ACT, 1961, DTD.31.7.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e., ANNEX-C AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESPONDENT, DTD.31.7.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e., ANNEX-D. IN WP NO 7003 OF 2015 BETWEEN MRS ALPA H ASHAR W/O HIREN ASHR AGED ABOUT 45 YEARS RESIDING AT C/O A-1 CORPORATION NO.17, SRI BALAJI MARKET 199/200, T STREET BANGALORE 560 053 ... PETITIONER (By Sri. HARISH V.S, ADV.,) AND INCOME TAX OFFICER WARD 9(3), 3RD FLOR JEEVAN SAMPIGE, LIC BUILDING SAMPIGE ROAD MALLESHWARAM BANGALORE 560 003 ... RESPONDENT (By Sri. K.V ARAVIND, ADV.,) 3 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT U/S.143(3) R.W. SECTION 147 OF THE INCOME TAX ACT, 1961, DTD.31.7.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e., ANNEX-C AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESPONDENT, DTD.31.7.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e., ANNEX-D & ETC., WP NO 7933 OF 2015 BETWEEN M/S. VARDHMAN METALS OMKAR HOUSE, NO. 8/1 4TH CROSS, KALASIPALYAM NEW EXTENSION, BANGALORE-560002. REPRESENTED BY ITS PROPRIETOR MR. DEVI CHAND KOTHARI S/O SHA POONAMCHAND GALBAJI AGED ABOUT 44 YEARS ... PETITIONER (By Sri. HARISH V.S., ADV.,) AND INCOME TAX OFFICER WARD 1(4), NO. 59 HMT BHAVAN, 6TH FLOOR BELLARY ROAD, BANGALORE-560032. ... RESPONDENT (By Sri. JEEVAN J NEERALGI, ADV.,) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO 4 QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT U/S.143 (3) R.W. SECTION 147 OF THE INCOME TAX ACT, 1961, DTD.31.10.2014 FOR THE ASSESSMENT YEAR 2009- 10 i.e., ANNEX-B AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESPONDENT DTD.31.10.2014 FOR THE ASSESSMENT YEAR 2009- 10 i.e., ANNEX-C. IN WP NO 7002 OF 2015 BETWEEN MRS. JAGRUTI S ASHAR W/O SUNIL H ASHAR, AGED ABOUT 42 YEARS, RESIDING AT C/O A-1 CORPORATION, NO.17, SRI BALAJI MARKET 199/200, R.T STREET, BANGALORE-560053 ... PETITIONER (By Sri. HARISH V.S., ADV.,) AND INCOME TAX OFFICER WARD 9(3), 3RD FLOOR, JEEVAN SAMPIGE, LIC BUILDING, SAMPIGE ROAD, MALLESHWARAM, BANGALORE-560003. ... RESPONDENT (By Sri. K.V ARAVIND, ADV.,) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT U/S 143[3] R.W. 5 SECTION 147 OF THE INCOME TAX ACT 1961 DATED 31.7.2014 FOR THE ASSESSMENT YEAR 2007-08, i.e. ANN-C AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESONDENT DATED 31.7.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e. ANN-D & ETC., IN WP NO 7931 OF 2015 BETWEEN M/S. VARDHAMAN METALS OMKAR HOUSE, NO. 8/1 4TH CROSS, KALASIPALYAM NEW EXTENSION, BANGALORE-560002 REPRESENTED BY ITS PROPRIETOR MR DEVI CHAND KOTHARI S/O SHA POONAMCHAND GALBAJI AGED ABOUT 44 YEARS ... PETITIONER (By Sri. HARISH V.S., ADV.,) AND INCOME TAX OFFICER WARD 1(4), NO. 59 HMT BHAVAN, 6TH FLOOR BELLARY ROAD BANGALORE-560032 ... RESPONDENT (By Sri. K.V ARAVIND, ADV.,) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT U/S 143[3] R.W. SECTION 147 OF THE INCOME TAX ACT 1961, DATED 31.10.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e. VIDE ANN-B, AND CONSEQUENTIAL NOTICE OF 6 DEMAND ISSUED BY THE RESPONDENT, DATED 31.10.2014 FOR THE ASSESSMENT YEAR 2007-08 i.e. ANN-C IN WP NO 7936 OF 2015 BETWEEN M/S KOTHARI METALS OMKAR HOUSE, NO. 8/1, 4TH CROSS, KALASIPALYAM NEW EXTENSION, BANGALORE 560002. RERESENTED BY ITS PROPRIETOR MR. SURESH KUMAR KOTHARI, S/O. SHA POONAMCHAND GALBAJI AGED ABOUT 40 YEARS ... PETITIONER (By Sri. HARISH V.S., ADV.,) AND INCOME TAX OFFICER WARD 1 (4) NO.59, HMT BHAVAN, 6TH FLOOR, BELLARY ROAD, BANGALORE - 560032. ... RESPONDENT (By Sri. JEEVAN J NEERALGI, ADV.,) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT U/S 143[3] R.W. SECTION 147 OF THE INCOME TAX ACT 1961, DATED 31.10.2014 FOR THE ASSESSMENT YEAR 2009-10 i.e. VIDE ANN-B, AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESPONDENT, DATED 7 31.10.2014 FOR THE ASSESSMENT YEAR 2009-10 i.e. ANN-C & ETC., THESE WRIT PETITIONS COMING ON FOR PRLY. HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Common questions of law and fact arise for decision making, hence by consent of learned counsel for the parties, petitions are clubbed together, finally heard and disposed of by this order. 2. According to learned counsel for petitioners, having filed return of income for the assessment year 2007-08, and for assessment year 2009-10, though accepted, the assessing authority reopened the assessments by issuing notice under Section 148 of the Income Tax Act (for short the ‘Act’), on the premise that certain persons made statements of certain monies having been paid to the petitioners which were not accounted for in their return for the said assessment years. It 8 is the allegation of the petitioners that proceedings of re- assessment orders when concluded and passed were without extending an opportunity of hearing to the petitioners over the alleged statements made by certain persons. The allegation is not seriously controverted by the Revenue. 3. Undoubtedly, violation of principles of natural justice is palpable since a copy of the statement of person the basis for the notice under Section 148 of the Act, is not made available to the petitioners. 4. Suffice it to state that the proceedings culminating in the reassessment orders, impugned, without notice to the petitioners over the statement of certain persons, is illegal and cannot be sustained. 5. Petitions are accordingly allowed. Impugned reassessment orders are quashed. Liberty is reserved to the assessing authority to issue notice to the petitioners, furnish 9 copies of the statements, the basis of such notices, and extend reasonable opportunity of hearing to the petitioners and thereafterwarads pass orders in accordance with law. Since parties are represented by learned counsel, are directed to be present before the assessing officer on 13th July 2015 at 3.00 p.m. without further notice. Sd/- JUDGE Ia "