SRI. MADANAPALLI SREE RAMAIAH SETTY AMARNATH V. INCOME TAX OFFICER WARD 7(2)(1) BANGALORE

WP/10314/2023

AI Insights

The case involves a writ petition filed by Sri. Madanapalli Sree Ramaiah Setty Amarnath against the Income Tax Officer, Ward 7(2)(1), Bangalore, challenging the assessment order and demand notice issued under Sections 143(3) and 156 of the Income Tax Act, 1961, respectively. The petitioner contested the order on the grounds of lack of due opportunity to present his case, particularly citing the injury of his auditor which prevented timely response to the notices. The High Court of Karnataka, after considering the submissions and the circumstances presented, decided to quash the impugned order and notice, restoring the matter for reconsideration, thereby granting the petitioner another opportunity to present his case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 761795 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 07-12-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: BALARAM RAO
• Keywords: Assessment Order; Demand notice; Income Tax; Writ petition; Due Opportunity
• Section: 143(3); 156; 226; 227

Judgement Text

" - 1 - NC: 2023:KHC:44391 WP No. 10314 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF DECEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 10314 OF 2023 (T-IT) BETWEEN: SRI. MADANAPALLI SREE RAMAIAH SETTY AMARNATH S/O LATE MADANAPALLI SREE RAMAIAH SETTY, AGED ABOUT 64 YEARS, RESIDING AT NO.18, PRABHAT JEWELLERS GOLD, 10TH D MAIN, JAYANAGAR 4TH BLOCK, BANGALORE-560011. …PETITIONER (BY SRI. BALARAM R RAO.,ADVOCATE) AND: INCOME TAX OFFICER WARD 7(2)(1) BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB, GAMES VILLAGE, KORAMANGALA, BENGALURU, KARNATAKA-560095. …RESPONDENT (BY SRI.M. DILIP, ADVOCATE) THIS WP IS FILED UNDER SECTION 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO (i)CALL FOR THE RECORDS OF THE PETITIONERS CASE AND AFTER EXAMINING THE LEGALITY AND VALIDITY THEREOF QUASH AND SET ASIDE THE IMPUGNED ORDER U/S 143(3) OF THE ACT DATED 17.03.2023 IN Digitally signed by ANAND N Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:44391 WP No. 10314 of 2023 DIN ITBA/AST/M/143(3)/2022-23/1050936070(1) ANNEXURE-F AND UNDATED NOTICE OF DEMAND ISSUED U/S 156 OF THE INCOME TAX ACT HAVING NO DIN ANNEXURE-G PASSED BY THE RESPONDENT, FOR THE ASSESSMENT YEAR 2012-13 PASSED BY THE RESPONDENT AND (ii) DIRECT THE RESPONDENTS BY THEMSELVES, THEIR SUBORDINATE, SERVANTS AND AGENTS TO WITHDRAW AND CANCEL IMPUGNED ORDER U/S 143(3) OF THE ACT DATED 17.03.2023 IN DIN ITBA/AST/M/143(3)/2022-23/1050936070(1) ANNEXURE-F AND UNDATED NOTICE OF DEMAND ISSUED U/S 156 OF THE INCOME TAX ACT HAVING NO DIN ANNEXURE-G PASSED BY THE RESPONDENT, FOR THE ASSESSMENT YEAR 2012-13 ISSUED/PASSED BY THE RESPONDENT. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has impugned the respondent’s order dated 17.03.2023 under Section 143(3) of the Income-Tax Act, 1961 [for short, the ‘IT Act’] and the consequential demand under Section 156 of the IT Act. The petitioner’s grievance against the impugned assessment order is essentially on the ground of lack of due opportunity. Sri Balaram R Rao, the learned counsel for the petitioner, and Sri M. Dilip, the - 3 - NC: 2023:KHC:44391 WP No. 10314 of 2023 learned Standing Counsel for the respondent, are heard for final disposal. 2. It is seen from the records that the petitioner’s appeal as against the Assessment Order dated 30.03.2015 under Section 143(3) of the IT Act relevant to the assessment year 2012-13 before the Commissioner of Income-tax [Appeals] is unsuccessful. However, the subsequent appeal before the Income Tax Appellate Tribunal, Bangalore in ITA No.710/Bang/2020 is partly allowed setting aside the assessment order dated 30.03.2015 and restoring the proceedings for reconsideration to ascertain whether the confirmation as furnished by the petitioner is true and ordering deletion of the addition of Rs.1,50,000/. 3. The addition is proposed because the petitioner could not produce the PAN of those who he contended had extended the loan to him. The petitioner is issued with notice on 11.01.2023, but the petitioner has not responded. The petitioner is - 4 - NC: 2023:KHC:44391 WP No. 10314 of 2023 issued with the Final Notice dated 11.03.2023 permitting the petitioner to file response, if any, by 16.03.2023. The petitioner on this day has filed response seeking adjournment on the ground that his auditor had suffered an injury and was not able to move about and he was in search of another auditor or a consultant to file his response. The respondent has rejected the petitioner’s request for adjournment only on the ground that despite ample opportunities being granted the petitioner has failed to prove the identity and capacity of the creditors. 4. It is obvious from this consideration that the respondent has failed to examine whether the petitioner’s case viz., that his auditor was injured and he had to secure the assistance of another auditor or a consultant was justified. The petitioner has furnished Medical Certificate/s to establish the veracity of this reason. At this stage, Sri M. Dilip, the learned counsel for the respondent, submits that if - 5 - NC: 2023:KHC:44391 WP No. 10314 of 2023 there is any interference restoring the proceedings on the ground that there must be another opportunity, this Court may observe that the petitioner, who has not availed opportunity from the month of January 2023, cannot raise the question of limitation in concluding the assessment. In rejoinder, Sri Balaram R Rao, the learned counsel for the petitioner, submits that with indulgence being granted, the petitioner would not raise the ground of limitation. In the light of the afore, the following: ORDER [A] The petition is allowed in part. [B] The impugned Assessment Order dated 17.03.2023 and the consequential Demand Notice [Annexures - F and G] are quashed and the proceedings are restored to the respondent for reconsideration. - 6 - NC: 2023:KHC:44391 WP No. 10314 of 2023 [C] The petitioner shall appear before the respondent on 08.01.2024, or such other date as may be informed by the respondent, and [E] The petitioner shall also be at liberty to file every document to justify its stand against the proposed addition. Sd/- JUDGE NV "