Primary Co-operative Agriculture and Rural Development Bank Limited, Siruguppa V. National Faceless Assessment Centre and Assessment Unit, Regional Faceless Assessment Centre and Income Tax Officer, Ward-1 and TPS and Principal Commissioner of Income Tax

WP/103167/2024

AI Insights

The case involves M/S Primary Co-operative Agriculture and Rural Development Bank Limited, which filed a writ petition against the National Faceless Assessment Centre and other respondents, challenging the ex-parte assessment orders and subsequent attachment orders issued against them. The petitioner argued that the assessments were made without providing an opportunity of hearing and were based on provisions (Sections 143(3A) and 143(3B)) that had been deleted prior to the issuance of the orders. The respondents contended that the petitioner was given a reasonable opportunity to participate in the proceedings. The court found that the orders were not sustainable in law as they were based on outdated provisions and lacked procedural fairness.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 799588 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-07-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, Karnataka Co-operative Societies Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ROOPA ANVEKAR; M TIRUMALESH
• Assessee Lawyers: M V SESHACHALA; GANGADHAR; PRAVEEN TARIKAR
• Keywords: Assessment Year; Ex-parte assessment order; Natural Justice; Opportunity of Hearing; Writ of Certiorari
• Section: 144; 139; 143(3A); 143(3B); 143(3D)

Judgement Text

" - 1 - NC: 2024:KHC-D:10344 WP No. 103167 of 2024 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 23RD DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO.103167 OF 2024 (T-IT) BETWEEN: M/S PRIMARY CO-OPERATIVE AGRICULTURE AND RURAL DEVELOPMENT BANK LIMITED, SIRUGUPPA PLD BANK BUILDING, SADASIVANAGAR, SIRUGUPPA-563121, R/BY ITS SECRETARY/MANAGER, SRI. TIPPANNA M. BANASODE, AGE: 48 YEARS. … PETITIONER (BY SRI M.V. SESHACHALA, SENIOR COUNSEL FOR SRI GANGADHAR J.M., ADVOCATE AND SRI PRAVEEN P. TARIKAR, ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE, NO.412-413, IST FLOOR, OPP. METRO PILLAR NO.793, DWARKA MOR, NEW DELHI-110059, R/BY ASSESSING OFFICER. 2. ASSESSMENT UNIT, REGIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001. 3. INCOME TAX OFFICER, WARD-1 AND TPS, AAYAKAR BHAVAN, STAFF ROAD, FORT, BELLARI-583102. 4. PRL. COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, SEDAM ROAD, KALBURGI-585105. … RESPONDENTS (BY SMT. ROOPA ANVEKAR, ADVOCATE FOR YASHAVANT NARAYANKAR Digitally signed by YASHAVANT NARAYANKAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2024.07.25 11:24:23 +0530 - 2 - NC: 2024:KHC-D:10344 WP No. 103167 of 2024 SRI M. TIRUMALESH, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI TO QUASH ALL ATTACHMENT ORDERS DATED 04.04.2024, IDBI BANK BEARING ITBA/COM/F/17/2024- 25/1063886608(1) ANNEXURE-H, BELLARY DCC BANK LTD., BEARING NO.ITBA/COM/F/17/2024-25/1063886495(1) ANNEXURE- H1 AXIS BANK LTD., BEARING NO.ITBA/COM/F/17/2024- 25/1063886548(1) ANNEXURE-H2 KOTAK MAHINDRA BANK LTD., BEARING NO.ITBA/COM/F/17/2024-25/1063886349 (1) ANNEXURE- H3 AND ING VYSYA BANK BEARING NO.ITBA/COM/F/17/2024- 25/1063886665 (1) ANNEXURE-H4 ALL PASSED BY THE ASSESSING OFFICER THIRD RESPONDENT AND ETC.,. THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: ORDER 1. Heard learned senior counsel Sri.M.V.Seshachala on behalf of Sri.Gangadhar J.M., for the petitioner and Sri M. Tirumalesh, learned counsel for respondent Nos. 1 to 4. 2. Petitioner is a co-operative society registered under the Karnataka Co-operative Societies Act. The object of the petitioner society was to provide long term credit for the agricultural and rural development to taluka level by providing various loans to it’s members by following the guidelines of the NABARAD for the betterment of the Farmers in the taluka level. Petitioner has been assessed for the year 2012-2013 and it has filed returns of income under Section 139 of the Income Tax Act (for short the - 3 - NC: 2024:KHC-D:10344 WP No. 103167 of 2024 Act), so also the petitioner in respect of the assessment year 2018-2019 filed his returns of income under Section 139(1) of the Act. It is the case of the petitioner that despite filing the returns for the assessment years 2017 onwards, the respondents authorities passed an ex-parte assessment order for the years 2018-2019 and 2020-2021 without providing an opportunity of hearing to the petitioner and action was initiated under Section 144 R/w 143 (3A) and 143 (3B) of the Act, by order dated 16.4.2021. Thereafter, another order came to be passed by passing under Section 144 R/w 144(B) of the Act for the respective years. 3. It is contended by learned senior counsel representing for the petitioner that the assessment order passed by the respondents/authorities is illegal, arbitrary, without jurisdiction and the same is not sustainable for the reason that order is passed subsequent to 1.4.2021, wherein Sections 143 (3A) and 143 (3B) of the Act have been deleted as contained in Section 143 3(D). Therefore, initiation of the proceedings itself is bad in law, so also no opportunity was given as an ex-parte order came to be passed against the petitioner. - 4 - NC: 2024:KHC-D:10344 WP No. 103167 of 2024 4. It is further contended by the learned senior counsel representing for the petitioner that vide order dated 7.6.2024, this Court granted interim order of stay of further proceedings of attachment order, but despite which, the petitioner is unable to operate the bank account and disburse the salary to the employees. It is also contended by learned senior counsel that the assessment order for both the years i.e. 2018-2019 and 2020-2021 would have to be set aside solely on the ground of not providing opportunity of hearing and violation of principle of natural justice. Therefore, he contends that the matter has to go back to the respondents/authorities and the authorities be directed to provide suitable opportunity to the petitioner to participate in the proceedings and establish it’s case. 5. Learned counsel for the respondents Sri.M.Tirumalesh contends that there is no violation or illegality in the order passed by the respondents/authorities as reasonable opportunity has been provided to the petitioner to participate in the proceedings. Since, it has not availed the opportunity, the order impugned is sustainable in law and does not require any interference. - 5 - NC: 2024:KHC-D:10344 WP No. 103167 of 2024 6. Having heard learned counsel for both the parties and having perused the provision of Section 143 (3D) of the Act, which clearly states as under: [(3D) Nothing contained in sub-section (3A) and sub-section (3B) shall apply to the assessment made under sub-section(3) or under section 144, as the case may be, on or after the 1st day of April, 2021.] 7. It is also noted by this Court that the impugned order is passed on 16.4.2021. The provision of Section 143 (3D) of the Act has come into effect and any order that is passed on or after 1.4.2021 under the provisions of Section 143 (3A) and (3B) of the Act shall not be applicable to the assessment order passed thereafter and admittedly, the impugned order is passed on 16.4.2021. Under the circumstances, the impugned order was not sustainable in law, in view of Section 143 (3D) of the Act and the matter will have to be remitted to the respondents/authorities for consideration afresh and the respondents/authorities shall provide reasonable opportunity of hearing to the petitioner and thereafter, decide the matter in accordance with law. Accordingly, I pass the following: - 6 - NC: 2024:KHC-D:10344 WP No. 103167 of 2024 ORDER i) The writ petition is disposed of. ii) The assessment order for the assessment year 2018-2019, dated 16.4.2021 vide Annexure-E and consequential penalty order dated 28.1.2022 and the Assessment order for the assessment year 2020-2021, dated 16.9.2022 vide Annexure-F2 and consequently penalty order 14.2.2023 vide Annexure G1 are hereby quashed. iii) Matter is remitted back to the authorities to reconsider afresh by providing opportunity of hearing to the petitioner. iv) The respondents are at liberty to issue notice in accordance with law and pursue the matter thereafter. v) In view of the quashing the orders at Annexures-E and F2, the consequential attachment orders at Annexures-H, H1, H2, H3 and H4 stand quashed. vi) Petitioner is at liberty to operate it’s accounts. Sd/- JUDGE VB/CT:BCK LIST NO.: 1 SL NO.: 17 "