SRI. RUDRAYYA GURUPADAYYA BELURMATH V. THE PRINCIPAL COMMISSIONER OF INCOME TAX

WP/103816/2021

AI Insights

The case involves Sri. Rudrayya Gurupadayya Belurmath, the petitioner, who challenged an ex-parte assessment order passed by the Assistant Commissioner of Income Tax, Central Circle, Hubli. The petitioner argued that the order was passed in violation of the principles of natural justice, as he was not given sufficient time to gather and submit the required documents due to the short notice period provided by the department. The department contended that the notice was part of a continuing proceeding and that the petitioner had previously been reminded to submit documents, thus justifying the quick assessment. The court, however, found that the petitioner was not given a fair opportunity to respond adequately, leading to the quashing of the assessment order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 761075 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-10-2021
• Assessment Year: misc
• Laws Referred To: Articles 226 & 227 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ; TULAJAPPA KALABURGI
• Assessee Lawyers: MALLAHAR RAO; H R KAMBIYAVAR; PATRI SHASHIKALA
• Keywords: Ex-parte assessment order; Natural Justice; Writ of Certiorari; Writ of Mandamus; Writ of prohibition; Assessment order quashing
• Section: 144

Judgement Text

" : 1 : IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 28TH DAY OF OCTOBER, 2021 BEFORE THE HON’BLE MR.JUSTICE SURAJ GOVINDARAJ WRIT PETITION No.103816/2021 (T-TT) BETWEEN: SRI. RUDRAYYA GURUPADAYYA BELURMATH, S/O. GURUPADAYYA BELURMATH, AGE. 46 YEARS, R/AT. GOUDAR ONI, SAIDAPUR, DHARWAD, KARNATAKA-580001 PAN NO.ABWPB6104B. …PETITIONER (BY SHRI.MALLAHAR RAO, SHRI H.R.KAMBIYAVAR AND SMT.PATRI SHASHIKALA, ADVOCATE) AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME TAX, HUBLI. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, C.R. BUILDING, NAVA NAGAR, HUBLI, KARNATAKA-580005. ..RESPONDENTS (BY SHRI.Y.V.RAVIRAJ AND SHRI TULAJAPPA KALABURGI, ADVOCATES FOR R1 AND R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE WRIT OF CERTIORARI OR WRIT IN THE LIKE NATURE OF QUASHING THE IMPUGNED EX-PARTE ASSESSMENT ORDER PASSED BY RESPONDENT NO.2 DATED 20.09.2021, PASSED IN DIN AND : 2 : ORDER NO.ITBA/AST/S/144/2021-22/1035746644(1), PASSED BY RESPONDENT NO.2, VIDE ANNEXURE-C AND ETC., THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER 1. The petitioner is before this Court seeking for the following reliefs: i) Issue Writ of Certiorari or writ in the like nature of quashing the impugned ex-parte assessment order passed by respondent No.2dated 20.09.2021, passed in DIN & Order No.: ITBA/ AST/ S/ 144/ 2021-22/ 1035746644(1); passed by respondent No.2, vide ANNEXURE - C; (ii) Issue Writ of Mandamus or writ in the like nature of direction, directing the respondent authorities to refrain from initiation of further proceedings in respect of the impugned ex parte assessment order passed by respondent No.2 dated 20.09.2021, passed in DIN & Order No.: ITBA/ AST/ S/ 144/ 2021-22/ 1035746644(1); passed by respondent No.2, vide ANNEXURE - C; (iii) Issue a Writ of Prohibition, or a writ in the like nature of prohibition, prohibiting the respondents herein or any authorities thereof, refraining them from initiating recovery proceedings on the basis of the above impugned ex-parte assessment order passed by respondent No.2 dated 20.09.2021, passed in DIN & Order No.: ITBA/ AST/ S/ 144/ 2021- 22/ 1035746644(1); passed by respondent No.2, vide ANNEXURE - C; (iv) Grant such other reliefs or further orders as this Hon’ble Court may deem fit in the facts and circumstances of this case, in the interests of justice and equity. : 3 : 2. Vide Annexure-A being a notice dated 13.09.2021, the petitioner had been called upon to furnish the ledger copies of the creditors and subsequent payment letters, confirmation letter from creditors, Pan number, names and address, contact numbers, balance sheet etc., and appear for hearing on 17.09.2021 at 10:30 a.m. It is in reply thereof, that the the petitioner electronically sought for four additional days’ time upto 21.09.2021 on the ground that the petitioner would require time to gather the information from the multiple sources. Despite the said request having been made, there was no reply to the said request. Instead, assessment order was passed on 20.09.2021 vide Annexure-C and it is this assessment order, which is under challenge before this Court. 3. Shri Mallahar Rao, learned counsel for the petitioner would submit that principles of natural justice having been completely violated, inasmuch as what the petitioner sought for was only four days additional time and even though, it is contended : 4 : that the assessment would have got time barred on 29.09.2021, if time upto 21.09.2021 had been granted, it would not have materially affected the grounds raised by the department as regards the assessment becoming time barred. He therefore submits that the department has shown undue haste and hurry in the matter depriving the petitioner of a right to submit documents and present himself before their department and as such, he seeks for quashing of the same. 4. Shri Y.V.Raviraj, learned standing counsel for the department would submit that the show Cause Notice dated 13.09.2021 is a notice issued in a continuing proceeding, inasmuch as, reminder noticed was issued on 17.05.2021 and 09.08.2021 in response to which only partial documents had been furnished. Therefore, the further notice was issued on 13.09.2021 being a continuing notice, the petitioner ought to have furnished the documents within the given time frame. The respondent being compelled to complete the assessment within the given time frame, the : 5 : respondent could not grant the time sought for. On these grounds, he submits that the petition is liable to be dismissed. 5. Heard Shri Mallahar Rao, learned counsel for the petitioner and Sri Y.V.Raviraj, learned counsel for the respondent-department. 6. This is not a stray case. This Court is coming across several matters where show Cause Notices are issued just at the end of the limitation period calling upon the assessee to furnish several documents in a short time frame. The department having tremendous resources at its disposal both in terms of manpower and the IT infrastructure available, the department is well aware of the possibility of an assessment being time barred and the date on which it would be time barred. It is therefore required that any show Cause Notice as regards reassessment or otherwise issued well within time so as to provide an opportunity to the assessee to defend the same properly, the issuance of show Cause Notice cannot only become an : 6 : empty formality inasmuch as adequate opportunity and time is required for the assessee who apart from replying to the department is also engaged in its business activities and other activities which require expending of time. 7. This case is also a pointer in that direction inasmuch as the notice was issued on 13.09.2021 fixing the hearing on 17.09.2021 and calling upon the petitioner to produce vouchers, books of accounts, ledger copies of the creditors, subsequent payment ledgers, letter of confirmation from the creditors, the PAN number, name and address and contact particulars of the creditors, the balance sheets of the petitioner and the creditors. This itself would indicate that the petitioner was required to obtain documents from third parties which would take sometime. It cannot be expected of an assessee to approach various creditors and get the above information within a period of four days in the present case. The petitioner having received the show Cause Notice on 16.09.2021 and on 17.09.2021 : 7 : electronically sought for extension of time still 21.09.2021 to gather the material from the multiple sources and furnish the documents. Admittedly, there is no reply to the said request at Annexure-B, instead the impugned assessment order has been passed on 20.09.2021. This in my considered opinion is a gross violation of the principles of natural justice, moreso, when fiscal orders are going to be passed which have a direct consequence and impact on an assessee like the petitioner. 8. Perusal of the assessment order does not also refer to the request for an adjournment and/or the refusal or acceptance of the said request. In the present case, even if time had been granted till 21.09.2021 as sought for by the petitioner, the limitation period for passing the assessment orders would not have got adversely affected. In that, the assessment would not have got time barred. It was for the department to have provided adequate time to the petitioner moreso when the request was within the limitation period. : 8 : 9. For all the multiple reasons aforesaid, the petition is allowed. A certiorari is issued and the assessment order dated 20.09.2021 at Annexure-C is quashed. The petitioner is permitted to furnish all the documents on or before 10.11.2021 and appear before the 2nd respondent at 10:30 a.m on 10.11.2021 and submit his documents. The 2nd respondent will also provide a hearing to the petitioner and pass necessary orders thereafter strictly in accordance with law. [Sd/-] JUDGE Jm/- "