Sri. Kanaka Credit Co Operative Society Ltd V. Union of India Department of Revenue Ministry of Finance Income Tax Department and Income Tax Officer Ward-1, Chitradurga and Income Tax Officer Ward-3, Davanagere

WP/14658/2020

AI Insights

The case involves Sri. Kanaka Credit Co Operative Society Ltd, represented by its president, challenging an assessment order and a subsequent demand notice issued by the Income Tax Department. The petitioner argued that the demand for a 20% deposit to consider a stay on the demand was unjust, citing a previous case (WP No.1879/2020) and a Division Bench order (ITA No.5006/2013) which supported their claim for benefits under Section 80P. The court found the order demanding the deposit to be cryptic and lacking in detailed reasoning, leading to its decision to set aside the order and remand the matter for reconsideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 803827 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 15-06-2023
• Assessment Year: misc
• Other Referred Cases: WP No.1879/2020, ITA No.5006/2013
• Laws Referred To: Article 226 of the Constitution of India, Section 80-P
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: KIRAN
• Keywords: Assessment Order; Cryptic order; Natural Justice; Reconsideration; Stay of demand
• Section: 80(P); 226

Judgement Text

" - 1 - NC: 2023:KHC:20664 WP No. 14658 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JUNE, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14658 OF 2020 (T-IT) BETWEEN: SRI. KANAKA CREDIT CO OPERATIVE SOCIETY LTD HAVING OFFICE AT SRI KANAKA CREDIT CO.OPERATIVE SOCIETY MAIN ROAD HOSADURGA CHITRADURGA DISTRICT-577527 REPRESENTED BY ITS PRESIDENT B G GOVINDAPPA S/O GALI POOJAPPA AGED ABOUT 66 YEARS …PETITIONER (BY SRI. KIRAN J., ADVOCATE) AND: 1. UNION OF INDIA DEPARTMENT OF REVENUE MINISTRY OF FINANCE INCOME TAX DEPARTMENT NEW DELHI-110011 REP BY ITS SECRETARY 2. INCOME TAX OFFICER WARD-1, CHITRADURGA NEAR GADDADA THIMMAREDDY HOUSE 2ND CROSS MUNICIPAL COLONY CHITRADURGA-577527 3. INCOME TAX OFFICER WARD-3, DAVANAGERE 9TH MAIN, 5TH CROSS B BLOCK DAVANAGERE-577002 …RESPONDENTS (BY SRI. E.I. SANMATHI ., ADVOCATE) Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:20664 WP No. 14658 of 2020 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 11.12.2019 PASSED BY THE R-3 AS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE VIDE ANNX-A AND ETC. THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has called in question the correctness of the order at Annexure-A, which is a assessment order, as well as sought for quashing of the notice at Annexure-B dated 20.2.2020, whereby respondent No.2 has ordered for deposit of 20% of the demand for the purpose of consideration of request for stay of the demand. 2. Learned counsel for the petitioner submits that the present writ petition can be confined to the relief insofar as Annexure-B is concerned. 3. It is contended that the order at Annexure-B is a cryptic order and reliance is placed on the order passed in WP No.1879/2020 to contend that insofar as the availability of benefit under Section 80-P as the same is - 3 - NC: 2023:KHC:20664 WP No. 14658 of 2020 covered by the order of Division Bench in ITA No.5006/2013, the authority ought not to insist for payment of 20%. Insofar as other deposits are concerned, it is submitted that the deposits made during the demonetization period or deposits by the depositors has been forwarded to the Nationalized Bank and the same cannot be treated as income. Other contentions have also been raised and it is contended that the order at Annexure-B requires reconsideration with due application of mind. 4. Heard both sides. 5. The order at Annexure-B is cryptic and requires re-consideration and the same is set aside. While reconsidering insofar as benefit under Section 80P is concerned, the authority not to insist on any demand in the light of the order passed in WP No.1879/2020. As regards the other aspects, the authority to hear the petitioners and pass orders in - 4 - NC: 2023:KHC:20664 WP No. 14658 of 2020 accordance with law after due application of mind. Accordingly, the petition is disposed off. 6. The consideration is to be made by respondent No.3 or the concerned jurisdictional officer. Sd/- JUDGE SR List No.: 1 Sl No.: 22 "