R.R. Traders V. NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT and INCOME TAX OFFICER WARD-1(1) MANGALORE

WP/12324/2024

AI Insights

The case involves R.R. Traders, a partnership firm, challenging an ex-parte assessment order issued by the National Faceless Assessment Centre under the Income Tax Act, 1961. The petitioner contended that due to a technical glitch, they were unable to submit a complete reply to the notices, and they did not receive the Show Cause Notice, which led to the impugned order. The respondents supported the validity of the impugned order. The court found merit in the petitioner's arguments, noting the short time granted for response and the technical issues faced, thus setting aside the assessment order and remitting the matter for fresh consideration.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 688173 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 04-09-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH; Y V RAVIRAJ
• Assessee Lawyers: SHEETAL BORKAR
• Keywords: Ex-parte assessment order; Natural Justice; Quash; Show cause notice; Technical glitch
• Section: 143(3); 144B

Judgement Text

" - 1 - NC: 2024:KHC:36039 WP No. 12324 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 12324 OF 2024 (T-IT) BETWEEN: R.R. TRADERS 101, JASMINE BLOCK D NO.4-5-484/33 PRESIDENCY PARK KARANGALPADY MANGALORE KARNATAKA INDIA - 575 003 PAN-ABCFR1850J PARTNER-H RAMESH SHENOY REGISTERED UNDER PARTNERSHIP ACT …PETITIONER (BY SMT. SHEETAL BORKAR, ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT BANGALORE - 560 500 2. INCOMET TAX OFFICER WARD-1(1) MANGALORE - 575 001 …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE AND SRI. Y.V. RAVIRAJ, ADVOCATES FOR R1 AND R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO-QUASH THE IMPUGNED EX-PARTE ASSESSMENT ORDER DATED 11.03.2024 BEARING DIN AND ORDER NO ITBA/AST/S/143(3)/2023- 24/1062393028(1) PASSED UNDER SECTION 143(3) READ WITH Digitally signed by MADHURI S Location: High Court of Karnataka - 2 - NC: 2024:KHC:36039 WP No. 12324 of 2024 SECTION 144B OF THE ACT IN RESPECT OF THE RELEVANT AY 2022-23, UNDER THE INCOME TAX ACT, 1961 VIDE ANNEXURE-K PASSED BY THE R-1 AUTHORITY DIRECT, DIRECTING THE RESPONDENT AUTHORITIES TO REFRAIN FROM INITIATING ANY KIND OF PROCEEDINGS, WITH RESPECT TO THE IMPUGNED EX- PARTE ASSESSMENT ORDER DATED 11.03.2024 BEARING DIN AND ORDER NO. ITBA/AST/S/143(3)/2023-24/1062393028(1) PASSED UNDER SECTION 143(3) READ WITH SECTION 144B OF THE ACT, IN RESPECT OF THE RELEVANT AY 2022-23 UNDER THE INCOME TAX ACT, 1961 VIDE ANNEXURE-K PASSED BY THE R-1 AUTHORITY. THIS PETITION, COMING ON FOR ORDERS, 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) Issue a Writ of Certiorari or in the like nature of quashing the impugned ex-parte assessment order dated 11.03.2024, bearing DIN & Order ITBA/AST/S/143(3)/2023-24/1062393028(1); No.: passed U/s.143(3) R/w. Section 144B of the Act, in respect of the relevant assessment year 2022-23, under the Income Tax Act, 1961, vide ANNEXURE - K, passed by the respondent No.1 authority; (ii) Issue Writ of Mandamus or in the like nature of writ of direction, directing the respondent authorities to refrain from initiating any kind of proceedings, with respect to the impugned ex-parte assessment order dated 11.03.2024, bearing DIN & Order No.: ITBA/AST/S/143(3)/2023-24/1062393028(1);passed U/s.143(3) R/w. Section 144B of the Act, in respect of the relevant assessment year 2022-23, under the Income Tax Act, 1961, vide ANNEXURE- K, passed by the respondent No.1 authority; (iii) Issue Writ of Mandamus, directing the concerned respondent authorities to refrain any further activities and such initiatives in respect of coercive - 3 - NC: 2024:KHC:36039 WP No. 12324 of 2024 recovery in respect of impugned demand under the impugned ex-parte assessment order dated 11.03.2024, bearing DIN & Order ITBA/AST/S/143(3)/2023-24/1062393028(1); No.: passed U/s.143(3) R/w. Section 1448 of the Act, in respect of the relevant assessment year 2022-23, under the Income Tax Act, 1961, vide ANNEXURE - K, passed by the respondent No.1 authority; (iv) Issue Writ of Prohibition, prohibiting the concerned respondent authorities in taking further action, measures or steps and such initiatives in respect of recovery in respect of impugned demand under the impugned ex-parte assessment order dated 11.03.2024, bearing DIN & Order ITBA/AST/S/143(3)/2023-24/1062393028(1); No.: passed U/s.143(3) R/w. Section 144B of the Act, in respect ofthe relevant assessment year 2022-23, under the Income Tax Act, 1961, vide ANNEXURE - K, passed by the respondent No.1 authority; (v) Issue any other writ, order or direction in favour of the Petitioner, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case in the interest of justice. 2. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record. 3. A perusal of the material on record will indicate that it is the specific contention of the petitioner that due to technical glitch in the website/portal of the respondent, petitioner could not submit detailed reply to the notices dated 07.08.2023, 18.09.2023 and 08.01.2024 and only part/portion of reply was sent and only - 4 - NC: 2024:KHC:36039 WP No. 12324 of 2024 part/portion of the reply was taken up by the respondent. It is also contended that Show Cause Notice dated 23.02.2024 was not received by the petitioner in its registered email on account of which the petitioner was not in a position to submit a reply along with documents to the said Show Cause Notice, which culminated in the impugned order, which is violation of the principles of natural justice warranting interference of this Court in the present petition. 4. Per contra, learned counsel for the respondents would support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed. 5. A perusal of the material on record will indicate that apart from the fact that an extremely short/small period of five days was granted to the petitioner to submit reply to the Show Cause Notice, the impugned order reveals that the only a part/portion of reply was considered/taken into account by the respondent to the notices dated 07.08.2023, 18.09.2023 and 18.01.2024. It is also an undisputed fact that the petitioner did not submit any reply to the Show Cause Notice dated 23.02.2024, which culminated in the impugned order. - 5 - NC: 2024:KHC:36039 WP No. 12324 of 2024 6. Under these circumstances, in the light of the fact that the petitioner did not contest Show Cause Notice or the impugned proceedings, by adopting justice oriented approach and in order to provide one more opportunity to the petitioner to submit reply and contest the proceedings, I deem it just and appropriate to set aside the impugned assessment order at Annexure-K dated 11.03.2024 and remit the matter back to the respondent for reconsideration afresh from the stage of petitioner submitting reply/response to the Show Cause Notice. 7. In the result, I pass the following: ORDER i) The petition is hereby allowed. ii) Impugned assessment order at Annexure-K dated 11.03.2024 is hereby set aside. iii) The matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law to the stage of petitioner submitting reply to the Show Cause Notice at Annexure-J dated 23.02.2024. - 6 - NC: 2024:KHC:36039 WP No. 12324 of 2024 iv) The petitioner shall submit reply along with documents to the Show Cause Notice within a period of one month from today. v) Upon the petitioner submitting a reply/documents etc., the respondent shall provide sufficient and reasonable opportunity to the petitioner and grant personal hearing and proceed further in accordance with law. vi) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS List No.: 1 Sl No.: 9 "