Shri. Chandrashekar Hebbale V. Additional/Joint/Deputy Asst. Commissioner of Income-Tax/Income Tax Officer, National Faceless Assessment Centre, Income Tax Department and Income Tax Officer, Ward 1, Bidar and Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Income Tax Department

WP/201172/2024

AI Insights

The case involves Shri. Chandrashekar Hebbale, the petitioner, who contested an ex-parte assessment order and subsequent appellate order concerning the assessment year 2015-16. The petitioner argued that he did not receive proper notice of the assessment and appellate proceedings due to administrative errors, which led to an ex-parte order being passed against him. Despite his appeals and submissions highlighting these issues, the notices continued to be sent to an incorrect email address, and he was unable to respond due to health issues during the relevant period. The respondents, including the Income Tax Officer and the Commissioner of Income Tax (Appeals), maintained that the petitioner did not diligently prosecute his appeal. The High Court found merit in the petitioner's arguments, noting the procedural lapses in notifying him and the genuine health issues that prevented his participation in the proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798251 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-11-2024
• Assessment Year: misc
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: TIRUMALESH
• Assessee Lawyers: SANDEEPANI NEGLUR; KRUPA SAGAR PATIL
• Keywords: Appeal; Assessment Order; Coercive Steps; Ex parte order; Hearing Notice; Income Tax; Recovery Demand
• Section: 147; 144; 250; 271(1)(c); 274; 144B; 226; 227

Judgement Text

" - 1 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 6TH DAY OF NOVEMBER, 2024 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.201172 OF 2024 (T-IT) BETWEEN: SHRI. CHANDRASHEKAR HEBBALE S/O SHIVRAJ, AGE: 63 YEARS, HAVING ADDRESS AT: H.NO.15-2-95/1, BASAVA SANDESH KUMBARWADA ROAD, GANESH NAGAR, BIDAR-585 403, KARNATAKA. ALSO AT: 9-7-104, GANDHI GUNJ, GANDHI GUNJ S.O, BIDAR-585 403, KARNATAKA. …PETITIONER (BY SRI. SANDEEPANI A. NEGLUR & SRI KRUPA SAGAR PATIL, ADVOCATES) AND: 1. ADDITIONAL/JOINT/ DEPUTY ASST. COMMISSIONER OF INCOME-TAX/ INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, JAWAHARLAL NEHRU STADIUM, NEW DELHI-110 003. 2. INCOME TAX OFFICER, WARD 1, BIDAR, Digitally signed by LUCYGRACE Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 CMC NO.8-10-269, BASAVA SRI COMPLEX, STADIUM ROAD, BIDAR-585 401, KARNATAKA. 3. COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, ROOM NO.245-A, NORTH BLOCK, NEW DELHI-110 001. …RESPONDENTS (BY SRI. TIRUMALESH, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO, (I) SET ASIDE THE IMPUGNED EX-PARTE ORDER BEARING DIN NO.ITBA/ NFAC/S/ 250/2023-24/ 1061133811(1) DATED 19.02.2024 PASSED BY RESPONDENT NO.3 UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 IN APPEAL NO.NFAC/2014-15/10155571 FOR THE ASSESSMENT YEAR 2015-16 (ANNEXURE ‘A’); (II) DIRECT RESPONDENT NO.3 OR THE CONCERNED APPELLATE AUTHORITY TO RECONSIDER THE APPEAL FILED BY THE PETITIONER BEARING APPEAL NO.NFAC/2014- 15/10155571 (ANNEXURE ‘L-1’), AGAINST THE ASSESSMENT ORDER DATED 26.03.2022, IN ACCORDANCE WITH LAW AND AS EXPEDITIOUSLY AS POSSIBLE AFTER ISSUING HEARING NOTICES UNDER SECTION 250 OF THE ACT TO THE REGISTERED PRIMARY EMAIL ADDRESS OF THE PETITIONER, NAMELY ‘[e-mail]’ AS WELL AS VIA REGISTERED POST TO THE REGISTERED ADDRESS OF THE PETITIONER AS MENTIONED IN THE CAUSE TITLE AND AS - 3 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 WELL AVAILABLE ON HIS INCOME TAX PORTAL, AND TO PROVIDE A FRESH AND REASONABLE OPPORTUNITY OF HEARING TO THE PETITIONER AND TO ALSO PROVIDE WITH A REASONABLE AND EFFECTIVE OPPORTUNITY TO FILE WRITTEN SUBMISSION/DOCUMENTS IN SUPPORT OF HIS APPEAL; (III) RESTRAIN RESPONDENT NO.1 AND RESPONDENT NO.2 FROM TAKING ANY COERCIVE STEPS TO RECOVERY THE DEMAND ARISING OUT OF THE ASSESSMENT ORDER BEARING NO.ITBA/ AST/S/ 147/2021-22/ 1041608748(1) DATED 26.03.2022 PASSED BY RESPONDENT NO.1 UNDER SECTION 147 READ WITH SECTION 144 READ WITH SECTION 144B OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2015-16 TILL THE DISPOSAL OF THE APPEAL BY RESPONDENT NO.3 OR THE CONCERNED APPELLATE AUTHORITY (ANNEXURE H-1) AND TILL SUCH TIME AS THE PERIOD OF LIMITATION TO FILE AN APPEAL TO THE ITAT AGAINST THE FRESH APPELLATE ORDER EXPIRES; (IV) RESTRAIN THE AUTHORITIES OF THE INCOME TAX DEPARTMENT FROM PROCEEDING ANY FURTHER WITH RESPECT TO THE SHOW CAUSE NOTICE DATED 26.03.2022 BEARING DIN & NOTICE NO.ITBA/PNL/S/271(1)(C)/2021- 22/1041608893(1) ISSUED BY RESPONDENT NO.1 UNDER SECTION 271(1)(C) READ WITH SECTION 274 OF THE ACT FOR THE ASSESSMENT YEAR 2015-16 (ANNEXURE ‘J’) TILL THE DISPOSAL OF THE APPEAL BY RESPONDENT NO.3 OR THE CONCERNED APPELLATE AUTHORITY (ANNEXURE H-1) AND TILL SUCH TIME AS THE PERIOD OF LIMITATION TO FILE AN - 4 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 APPEAL TO THE ITAT AGAINST THE FRESH APPELLATE ORDER EXPIRES; (V) 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 INTEREST OF JUSTICE AND EQUITY. 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 (PER: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR) In this petition, the petitioner seeks the following reliefs: “(i) Set aside the impugned ex-parte order bearing DIN no.ITBA/ NFAC/S/ 250/2023-24/ 1061133811(1) dated 19.02.2024 passed by respondent No.3 under Section 250 of the Income-Tax Act, 1961 in Appeal No.NFAC/2014-15/10155571 for the Assessment Year 2015-16 (Annexure ‘A’); (ii) Direct respondent No.3 or the concerned Appellate Authority to reconsider the appeal filed by the petitioner bearing Appeal - 5 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 No.NFAC/ 2014-15/ 10155571 (Annexure ‘L-1’), against the Assessment Order dated 26.03.2022, in accordance with law and as expeditiously as possible after issuing hearing notices under Section 250 of the Act to the registered primary email address of the petitioner, namely ‘[e-mail]’ as well as via registered post to the registered address of the petitioner as mentioned in the cause title and as well available on his Income Tax Portal, and to provide a fresh and reasonable opportunity of hearing to the petitioner and to also provide with a reasonable and effective opportunity to file written submission/documents in support of his appeal; (iii) Restrain respondent No.1 and respondent No.2 from taking any coercive steps to recovery the demand arising out of the Assessment Order bearing No.ITBA/ AST/S/ 147/2021-22/ 1041608748(1) dated 26.03.2022 passed by respondent No.1 under Section 147 read with Section 144 read with Section 144B of the Income-tax Act, 1961 for the Assessment Year 2015-16 till the disposal of the appeal by respondent No.3 or the concerned Appellate Authority (Annexure H-1) and till such time as the period of limitation to - 6 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 file an appeal to the ITAT against the fresh appellate order expires; (iv) Restrain the authorities of the Income Tax Department from proceeding any further with respect to the Show Cause Notice dated 26.03.2022 bearing DIN & Notice No.ITBA/ PNL/S/ 271(1)(c)/ 202122/ 1041608893(1) issued by respondent No.1 under Section 271(1)(c) read with Section 274 of the Act for the Assessment Year 2015-16 (Annexure ‘J’) till the disposal of the appeal by respondent No.3 or the concerned Appellate Authority (Annexure H-1) and till such time as the period of limitation to file an appeal to the ITAT against the fresh appellate order expires; and (v) 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 interest of justice and equity.” 2. Heard the learned counsel for the petitioner and the learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that, aggrieved by the exparte Assessment Order dated - 7 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 26.03.2022 passed by the respondents, the petitioner filed an appeal on 20.06.2022 along with written submissions. In the said appeal, the petitioner contended that the earlier notices and assessment order had been issued/sent not to the petitioner or his registered e-mail address, but to the e-mail address of one Kashinath Barule, as a result of which, the petitioner did not receive the notices preceding the Assessment Order on account of which, he could not submit replies, nor contest the proceedings, which culminated in the exparte Assessment Order. It is contended that despite the said specific contention urged by the petitioner in the appeal, the respondents sent/issued the hearing notices dated 04.04.2023, 20.06.2023 and 10.07.2023 once again to the aforesaid incorrect e-mail address of Kashinath Barule and did not send the same to the petitioner or his registered e-mail address. It is also contended that subsequently, the petitioner was hospitalized and was under bed rest due to health issues and as such, the hearing notice dated 12.01.2024 issued under Section 250 of the Income Tax - 8 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 Act sent to his registered e-mail ID could not be replied to by him pursuant to which, the 3rd respondent No.3 proceeded to pass the impugned ex-parte order dated 19.02.2024 at Annexure-A, dismissing the appeal filed by the petitioner by noticing his absence, without providing sufficient or reasonable opportunity to the petitioner, who is before this Court by way of the present petition. 4. It is contended that the inability and omission on the part of the petitioner to appear before the respondents in the appeal was due to the aforesaid bonafide reason, unavoidable circumstances and sufficient cause and as such, it is necessary to set aside the impugned exparte order and remit the matter back to the 3rd respondent – Appellate Authority for reconsideration of the appeal filed by the petitioner on 20.06.2022 afresh in accordance with law, after providing sufficient and reasonable opportunity to the petitioner and hearing him. - 9 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 5. Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 6. A perusal of the material on record including the impugned order passed by the 3rd respondent – Appellate Authority will indicate that it is specifically held that the appellant did not appear and prosecute the appeal diligently, as a result of which, the 3rd respondent passed the impugned exparte order, dismissing the appeal filed by the petitioner. 7. Under these circumstances, in the light of the specific assertion on the part of the petitioner that his inability and omission to appear before the 3rd respondent – Appellate Authority and prosecute the appeal on merits was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to set aside the impugned order at Annexure-A dated 19.02.2024 and remit the matter back to the - 10 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 3rd respondent for reconsideration afresh in accordance with law. 8. In the result, I pass the following: ORDER i. The petition is allowed. ii. The impugned order at Annexure-A dated 19.02.2024 passed by the 3rd respondent and the consequent notices are hereby set aside. iii. The matter is remitted back to the 3rd respondent – Appellate Authority for reconsideration of the appeal at Annexure-L1 dated 20.06.2022 filed by the petitioner afresh after providing sufficient and reasonable opportunity to the petitioner and hearing him and in accordance with law as expeditiously as possible. iv. It is further directed that till disposal of the appeal by the 3rd respondent-Appellate Authority, the respondents shall not take any - 11 - NC: 2024:KHC-K:8122 WP No. 201172 of 2024 precipitative/coercive steps against the petitioner. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV/LG List No.: 1 Sl No.: 32 "