SHRI CHIKKARANGAIAH GOVINDARAJU V. UNION OF INDIA

WP/17751/2021

AI Insights

The case involves Shri Chikkarangaiah Govindaraju, the petitioner, who filed a writ petition against the Union of India and other respondents challenging a show cause notice issued under Section 271AAC(1) of the Income Tax Act for the assessment year 2017-18. The petitioner argued that his replies and documents submitted in response to earlier notices were not considered, leading to an erroneous assessment. The court found that the non-consideration of the petitioner's submissions violated the principles of natural justice and thus quashed the assessment order and related notices, remitting the matter for fresh consideration.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 740794 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 16-12-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: ATUL ALUR
• Keywords: Assessment Order; Income Tax; Natural Justice; Show cause notice; Writ petition
• Section: 271AAC(1); 153(2); 153(1); 226; 227

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 16TH DAY OF DECEMBER, 2021 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.17751 OF 2021 (T-IT) BETWEEN: SHRI. CHIKKARANGAIAH GOVINDARAJU SON OF LATE CHIKKARANGAIAH AGED ABOUT 59 YEARS NO 1220/B, 7TH A CROSS 6TH MAIN ROAD KENGERI SATALITE TOWN BENGALURU - 560060 ...PETITIONER (BY SRI. ATUL K. ALUR, ADVOCATE) AND: 1. UNION OF INDIA REP BY ITS SECRETARY REVENUE DEPARTMENT OF FINANCE NORTH BLOCK, NEW DELHI - 110001 2. THE PRINCIPLE OF COMMISSIONER OF INCOME TAX, C.R. BUILDING NO.1 QUEENS ROAD BENGALURU - 560001 3. INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE NORTH BLOCK, NEW DELHI - 110001 4. THE INCOME TAX OFFICER WARD -3(2) (3), ROOM NO 113 1ST FLOOR BMTC BUILDING 80 FEET ROAD, 6TH BLOCK KORAMANGALA, BENGALURU - 560095 … RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE) 2 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE SHOW CAUSE NOTICE ISSUED BY THE R3 UNDER SECTION 271AAC(1) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2017-18 DATED 03.09.2021, AT ANNEXURE-K IN SO FAR AS THE PETITIONER IS CONCERNED AND ETC. THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER 1. In this petition, petitioner seeks quashing of the show cause notice dated 03.09.2021 at Annexure-K issued by respondent No.3 and for other reliefs. 2. Heard the learned counsel for the petitioner and the learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition, learned counsel for the petitioner submits that despite the petitioner submitting suitable replies to the notices issued by the respondents under Section 153(2) and 153(1) of the Income Tax Act, 1961 (for short, 'the said Act of 1961'), the respondents neither considered nor appreciated the objections, replies and documents submitted by the petitioner and this has resulted in erroneous conclusion. It is pointed out that though the 3 petitioner submitted reply by e-mail as well as hard copy/physical copy of the reply along with the documents on 25.11.2019 to the respondents, the respondents have not considered the same. It is further pointed out, perusal of the assessment order dated 29.11.2019 will indicate that the said reply submitted by the petitioner on 25.11.2019 and the documents produced by him have not been considered by the Assessing Officer before passing the impugned assessment order. It is also submitted that in addition to the documents already produced by the petitioner, the petitioner has recently discovered certain additional material/documents in support of his claim and the same would be produced by the petitioner, if one more opportunity is granted to the petitioner to submit the same by setting aside the impugned assessment order. Lastly, learned counsel for the petitioner submits that though the petitioner has already filed rectification application at Annexure-J dated 11.12.2019, in case this Court sets aside the impugned assessment order and provides one more 4 opportunity to the petitioner, the petitioner would withdraw the said rectification application. 4. Per contra, learned Counsel for the respondents submits that despite sufficient opportunity, the petitioner did not produce the documents sought for by the respondents and consequently the respondents was left with no option but to proceed to pass the impugned assessment order, which does not warrant any interference by this Court, in the present petition. 5. As rightly contended by the learned counsel for the petitioner, a perusal of the hard copy/physical copy of the reply dated 25.11.2019 will indicate that despite the petitioner submitting the same to the respondents, the respondents neither considered nor adverted to the same in the impugned assessment order, which is clearly illegal and arbitrary on account of non-consideration of the aforesaid reply dated 25.11.2019 thereby being violative of principles of natural justice. In fact, a perusal of the impugned assessment order at paragraph 2 will indicate that the respondents have made a factually incorrect 5 statement in coming to the conclusion that the petitioner has not submitted a reply to the notice dated 09.08.2018 and notice dated 07.11.2019, which is contrary to the material on record, which clearly indicates that the petitioner had responded/replied to both the notices. Under these circumstances, non-consideration of the replies/response submitted by the petitioner and documents submitted by him clearly tantamounts to violation of principles of natural justice and on this ground alone, the impugned assessment order deserves to be set aside. Further, in view of the assertion on the part of the petitioner that if one more opportunity is provided, the petitioner would produce additional documents and materials in support of his claim, I am of the considered opinion that the impugned assessment order deserves to be quashed and the matter needs to be remitted to the respondents for re-consideration afresh after providing one more opportunity to the petitioner to file additional objections and produce additional documents pursuant to which the respondents are to be directed to consider the entire material on record including the replies and 6 documents already submitted by the petitioner and the additional replies and documents to be submitted by the petitioner pursuant to this order. 6. So also, the submission made by the learned counsel for the petitioner that the petitioner would withdraw the rectification application is placed on record. 7. In result, I pass following ORDER i) The Writ Petition is hereby allowed. The impugned assessment order at Annexure-G dated 29.11.2019 passed by respondent No.4 is hereby quashed; ii) So also the consequential notice/computation sheet at Annexure-H dated 29.11.2019 and the show cause notice at Annexure-K dated 03.09.2021 also hereby quashed; iii) The matter is remitted back to the respondent No.4 for reconsideration afresh in accordance with law after providing an opportunity to the petitioner to produce additional documents and 7 submit additional objections to the notices issued by the respondents. Upon the petitioner submitting the said documents and objections to the respondent No.4, respondent No.4 is directed to consider the entire material on record including the earlier replies and documents submitted by the petitioner and the subsequent replies and documents to be submitted by the petitioner and conclude the proceedings in accordance with law. Sd/- JUDGE Prs* "