SYNERGY IMAGES PRIVATE LIMITED V. PR. COMMISSIONER OF INCOME TAX-6

WP/12838/2020

AI Insights

The case involves Synergy Images Private Limited, represented by its director Ms. Malini, who filed a writ petition against the orders of the Income Tax Department. The petitioner sought to quash the assessment order dated 7.12.2017 and the revision order dated 13.03.2020, both of which were unfavorable to the petitioner. The petitioner argued that the notices for the assessment were sent to the office of the Official Liquidator, and thus they did not receive them in a timely manner, leading to their non-participation in the assessment proceedings. The High Court of Karnataka found that the peculiar circumstances of the case, including the involvement of the Official Liquidator due to a winding up order, were not adequately considered by the lower authorities. Consequently, the court allowed the writ petition in part, quashing the impugned orders and restoring the matter for reconsideration.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 697814 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 04-12-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: LAKSHMI MENON
• Keywords: Assessment Order; Income Tax; Non-participation; Official liquidator; Winding up; Writ of Certiorari
• Section: 264

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF DECEMBER 2020 BEFORE THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD WRIT PETITION NO. 12838/2020 (T/IT) BETWEEN : SYNERGY IMAGES PRIVATE LIMITED 5TH FLOOR, 509-510, GOWRI APARTMENTS C BLOCK RMV II STAGE, WARD 4, MATHIKERE, BENGALURU – 560 054 REP BY ITS DIRECTOR MS. MALINI. S ... PETITIONER (By SMT. LAKSHMI MENON, ADVOCATE) AND : 1. PR. COMMISSIONER OF INCOME TAX-6 BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA, BENGALURU – 560 095. 2. DEPUTY COMMISSIONER OF INCOME TAX 6 (1) (2) ROOM NO 238, 2ND FLOOR, BMTC BUILDING 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE, KORAMANGALA BENGALURU – 560 095. 3. OFFICE OF THE OFFICIAL LIQUIDATOR HIGH COURT OF KARNATAKA NO 26-27 12TH FLOOR, RAHEJA TOWERS, M. G. ROAD, BENGALURU – 560 001. 2 REP BY OFFICIAL LIQUIDATOR OF KARNATAKA ... RESPONDENTS (By SRI.K.V. ARAVIND, ADVOCATE FOR R1 & R2 ) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION QUASHING THE ORDER PASSED BY THE FIRST RESPONDENT/PR.COMMISSIONER OF INCOME TAX BEARING NO. ITBA/COM/F/17/2019- 20/1026599418(1) DATED 13.03.2020 (ANNEXURE-A); ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER BEARING NO. I.T.N.S.65 DATED 07.12.2017 (ANNEXURE-B) AND ETC. THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R The petitioner has filed this writ petition for quashing the assessment order dated 7.12.2017 in ITNS.65 [Annexure- B] by the second respondent and the order dated 13.03.2020 in No.ITBA/COM/F/17/2019-20/1026599418[1] [Annexure- A] in revision by the first respondent under Section 264 of the Income Tax Act, 1961 [for short ‘the Act’]. 3 2. The best judgment assessment order for the Assessment Year 2005-06 is ultimately set aside by the Income Tax Appellate Tribunal, Bangalore Bench ‘C’, Bengaluru [for short ‘the Tribunal’] in ITA No.823[Bang] 2014 on 30.03.2016 with the matter being remitted for reconsideration observing that levy of interest is mandatory and consequential. The assessment on remand is concluded by the impugned order on 7.12.2017 but without the petitioner participating. The petitioner being aggrieved by this order dated 7.12.2017 has initiated proceeding before the first respondent under Section 264 of the Act. The first respondent has declined to interfere with the order dated 7.12.2017 refusing to accept the cause shown by the petitioner for its non participation before the Assessing Officer. 3. The petitioner’s case is that though the notices of hearing by the Assessing Officer on 8.8.2016 and 26.10.2017 are addressed to the petitioner’s address they are actually 4 sent to the office of the Official Liquidator. The petitioner has received a copy of the impugned order dated 7.12.2017 after correspondence with the office of the Official Liquidator and the petitioner has corresponded with the office of the Official Liquidator because there were no records pertaining to reassessment after the Tribunal’s order, and for the relevant period the petitioner’s affairs was being managed by the Official Liquidator consequent to the winding up order by this Court. This winding up proceedings has concluded in favour of the petitioner with the order dated 29.07.2015 in OSA No.46/2013. 4. However, the first respondent has considered the reasons assigned by the petitioner to show cause for non appearance before the Assessing Officer in the light of address furnished by the petitioner in the returns filed on 28.10.2017 for the Assessment Year 2017-18. The first respondent has observed that the notices by the Assessing Officer are indeed addressed to the same office as are indicated in the returns 5 filed on 28.10.2017 and there is nothing on record to indicate that there was any change in the address and the reasons assigned by the petitioner appears to be a ruse. 5. Smt. Lakshmi Menon, learned counsel for the petitioner reiterates the assertions made in the petition to canvass that the first respondent has not considered the cause shown by the petitioner in its proper perspective while Sri. K.V. Aravind, learned Counsel appearing for the revenue is emphatic that the petitioner cannot be given repeated opportunities. It is settled law that when once notice is issued to the registered address, there shall be deemed service of notice. The petitioner, who has not placed any material on record to justify that there is change in the address, cannot contend that the first respondent was not right in rejecting the petitioner’s revision under Section 264 of the Act resulting in confirmation of the impugned assessment order dated 7.12.2017. 6 6. The rival claims are examined in the light of the undisputed facts and the assertion that notices by the Assessing Officer on 8.8.2016 and 26.10.2017 though addressed to the petitioner are actually sent to the office of the Official Liquidator. The petitioner has relied upon correspondences with the Official Liquidator to demonstrate that a copy of the impugned order has been received by the petitioner from the office of the Official Liquidator. In the peculiar facts and circumstances where it is urged that though notices addressed to the petitioner is dispatched to the office of the Official Liquidator because of the antecedent winding up proceeding, this Court is of the considered view that the Tribunal has not considered the peculiarities of the case in rejecting the petitioner’s revision and when these peculiarities are considered, it cannot be concluded reasonable that the petitioner is not bonafide in non participation. As such, the following: 7 ORDER [a] The writ petition is allowed in part. [b] The impugned assessment order dated 7.12.2017 in ITNS.65 [Annexure-B] passed by the first respondent and the order dated 13.03.2020 in No.ITBA/ COM/ F/ 17 / 2019-20 / 1026599418 [1] [Annexure-A] passed by the second respondent are quashed. [c] The proceeding is restored to the file of the second respondent for reconsideration and the petitioner shall appear without further notice on 4.1.2021 or any other date as may be notified by the second respondent to the petitioner. In view of disposal of the writ petition, all pending applications do not survive for consideration and hence stand dismissed. Sd/- JUDGE AN/- "