Sterling Urban Ventures Private Limited V. Assessment Unit Income Tax Department, National Faceless Assessment Centre and Deputy/Assistant Commissioner of Income Tax Circle 6(1)(1)

WP/13061/2024

AI Insights

The case involves M/s. Sterling Urban Ventures Private Limited, which filed a writ petition against the assessment order and related notices issued by the Income Tax Department under various sections of the Income Tax Act, 1961. The petitioner contended that the show cause notice issued on 16.03.2024 required a response by 20.03.2024, which was in violation of the SOP that mandates a minimum of 7 days for such replies. The court found merit in the petitioner's argument regarding the violation of natural justice principles and procedural norms, leading to the setting aside of all contested orders and notices.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 799716 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-06-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: ANNAMALAI
• Keywords: Faceless assessment; Natural Justice; Show cause notice; Standard Operating procedure
• Section: 143(3); 274; 144B; 270(A); 156

Judgement Text

" - 1 - NC: 2024:KHC:23326 WP No. 13061 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 13061 OF 2024 (T-IT) BETWEEN: 1. M/S. STERLING URBAN VENTURES PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 2013, REPRESENTED BY ITS MANAGING DIRECTOR, SMT SHWETA RAMANI SASTRI, W/O KIRAN JOHN, AGED ABOUT 40 YEARS, NO. 8, PRESTIGE NEBULA, LEVEL - 5, CUBBON ROAD, OPP TO IT OFFICE BUILDING, BENGALURU - 560 001. … PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE) AND: 1. ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, REP. BY ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME - TAX/ INCOME TAX OFFICER, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:23326 WP No. 13061 of 2024 JAWAHARLAL NEHRU STADIUM, DELHI - 110 003. 2. THE DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX CURCLE 6(1)(1) BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. … RESPONDENTS (BY SRI. E.I. SANMATHI., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO i) QUASH THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 144B OF THE ACT DATED 29/03/2024 BEARING DIN NO. ITBA/AST/S/143(3)/2023-24/1063597240(1) FOR THE ASSESSMENT YEAR 2022-23 BY THE R1 HEREIN MARKED AS ANNEXURE-A1 AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Petitioner has sought for setting aside of the assessment order under Section 143(3) read with Section 144-B of the Income Tax Act, 1961 (for short 'the Act') at Annexure-A1; computation sheet dated 29.03.2024 at Annexure-A2; demand notice issued under Section 156 of the Act at Annexure-A3 and the penalty notice issued - 3 - NC: 2024:KHC:23326 WP No. 13061 of 2024 under Section 274 read with Section 270-A of the Act at Annexure-A4. 2. Petitioner has contended that the show cause notice at Annexure-G1 regarding proposed variation was issued on 16.03.2024 and was required to be replied by 20.03.2024. It is submitted that the same is in violation of the Standard Operating Procedure (SOP) prescribing time to be afforded for making out reply and accordingly, the petitioner having been prejudiced while such violation of the principles of natural justice, the impugned assessment order is required to be set aside and fresh opportunity be afforded to the petitioner. 3. The facts regarding the notice being issued on 16.03.2024 and reply having to be made out by 20.03.2024 are borne out on record. The SOP regarding procedure for faceless income tax assessment under Section 144-B at Clause N.1.3 provides that a period of 7 days is required to be afforded. In light of the same, the impugned order at Annexure-A1; computation sheet at - 4 - NC: 2024:KHC:23326 WP No. 13061 of 2024 Annexure-A2; demand notice at Annexure-A3 and the penalty notice at Annexure-A4, are all set aside. The matter is remitted back to the stage of reply to the show cause notice at Annexure-G1 dated 16.03.2024. All contentions are kept open. 4. Accordingly, the petition is disposed off. Sd/- JUDGE VP "