SBR Promoters V. Assessment Unit Income Tax Department and Deputy Commissioner of Income-Tax Circle 3(1)(1) and Principal Commissioner of Income-Tax-3

WP/22395/2022

AI Insights

The case involves M/s. SBR Promoters, a partnership firm, which filed a writ petition against the Income Tax Department challenging the assessment order, demand notice, and penalty notice issued for the assessment year 2020-21. The petitioner argued that the assessment order was passed without a proper personal hearing, despite multiple requests for such a hearing via video conferencing. The court found that the respondents had not adhered to the principles of natural justice by ignoring the petitioner's requests, leading to the quashing of the contested orders and a directive for a fresh assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 687922 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-11-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: MANSA ANANTHAN
• Keywords: Assessment Order; Demand notice; Natural Justice; Penalty notice; Quash
• Section: 143(3); 144B; 271AAC(1); 156; 271

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 24th DAY OF NOVEMBER, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.22395 OF 2022 (T-IT) BETWEEN: M/S. SBR PROMOTERS ( A PARTNERSHIP FIRM REGISTERED UNDER THE INDIA PARTNERSHIP ACT, 1932) NO.52, 4TH FLOOR, CHAITANYA PLAZA, D.V.G. ROAD, BANGALORE-560 004, REPRESENTED HEREIN BY ITS PARTNER, SRI. AKKISETTY RATHNAM PRASAD. …PETITIONER (BY SMT. MANSA ANANTHAN, ADVOCATE ) AND: 1 . ASSESSMENT UNIT INCOME TAX DEPARTMENT, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. 2 . THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 3(1)(1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE-560 095. 3 . THE PRINCIPAL COMMISSIONER OF INCOME-TAX-3 5TH FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE-560 095. …RESPONDENTS (BY SRI. E.I. SANMATHI., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED:27.09.2022(ANNEXURE-R) BEARING DIN ITBA/AST/S/143 (3)/2022-23/1046011997 (1) PASSED BY THE R1 U/S 143(3) READ WITH SECTION 144B OF THE ACT FOR THE A Y 2020-21 AND ETC. 2 THIS W.P. COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER In this petition, the petitioners have sought for the following reliefs: a. Quashing the order dated 27.09.2022 (Annexure-R) bearing DIN ITBA/AST/S/143(3)/2022-23/1046011997(1) passed by the 1st Respondent under Section 143(3) read with Section 144B of the Act for the assessment year 2020-21. b. Quashing the demand notice dated 27.09.2022 (Annexure-S) bearing ITBA/AST/S/156/2022- 23/1046012228(1) issued by the 1st Respondent under Section 156 of the Act for the assessment year 2020-21; c. Quashing the notice dated 27.09.2022 (Annexure-T) issued by the 1st Respondent proposing to levy penalty under Section 271AAC(1) read with Section 271 of the Act for the assessment year 2020-21 during the pendency of the writ petition; d. Pass an exparte order in terms of (a) and (b) above; and e. Pass such other or further orders this Hon’ble Court may deem fit in the facts and 3 circumstances of the case, in the interests of justice and equity. 2. Heard learned counsel for the petitioners and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the Memorandum of Petition and referring to the documents produced by the petitioner, learned counsel for the petitioner invites my attention to the show cause notice at Annexure-J dated 02.09.2022 issued by respondent No.1 in order to point out that the petitioner had not only filed objections for the said show cause notice, but requested for personal hearing in its reply dated 09.09.2022. It is also submitted that subsequently, respondent No.1 issued one more show cause notice dated 12.09.2022, to which the petitioner once again reiterated its submission and once again asked for an opportunity of personal hearing by way of video conferencing by submitting a reply dated 16.09.2022. It is the grievance of the petitioner that when the petitioner tried to log in, he could not do so and the petitioner made a request on 4 16.09.2022 as can be seen from Annexure-Q the screen shot of the said request and despite the same, the respondent did not accede to the request of the petitioner and proceeded to pass the impugned assessment order on the erroneous premise that the petitioner had not made a request for video conferencing, which is contrary to the material on record. It is therefore submitted that the impugned assessment order is violative of principles of natural justice and the same deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh in accordance with law. 4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 5. As rightly contended by the learned counsel for the petitioner, a conjoint reading and cumulative effect of the replies at Annexure-Q and L dated 16.09.2022 and 09.09.2022 respectively, coupled with the screen shot dated 16.09.2022 will clearly indicate that despite the petitioner requesting an opportunity of personal hearing, 5 the respondents did not accede to the said request and has proceeded on the erroneous ground that no such request has been made, which is clearly contrary to the material on record, thereby rendering the impugned assessment order illegal, invalid and arbitrary, being violative of principles of natural justice and consequently, the impugned assessment order deserves to be set aside and the matter be remitted back to the concerned respondent for reconsideration afresh in accordance with law. 6. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned assessment order dated 27.09.2022 at Annexure-R and the consequential demand notice dated 27.09.2022 at Annexure-S and the notice dated 27.09.2022 at Annexure-T are hereby quashed. (iii) The matter is remitted back to respondent No.1 for reconsideration afresh in 6 accordance with law after providing sufficient opportunity of personal hearing to the petitioner. (iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, representation, relevant documents etc., which in turn shall be considered by respondent No.1 and respondent No.1 shall pass appropriate orders in accordance with law. Sd/- JUDGE Bmc "