Vijayanagara Institute of Medical Sciences, VIMS-OPD Cantonment, Bellary-583 104. Rep. by its Director, Dr. T. Gangadhar Goud V. Assessing Officer, National Faceless Assessment Centre, New Delhi and Jurisdictional Assessing Officer, Deputy Commissioner of Income Tax Exemptions, Mangalore and Principal Commissioner of Income Tax Exemptions, Bangalore

WP/19247/2021

AI Insights

The case involves the Vijayanagara Institute of Medical Sciences, represented by its director, Dr. T. Gangadhar Goud, challenging an ex-parte assessment order and demand notice issued by the Income Tax authorities. The petitioner argued that due to the death of their Chartered Accountant, who was also their authorized representative, they were unaware of the communications and notices sent by the respondents, leading to the inability to respond and participate in the assessment process. The court found that the principles of natural justice were violated as the petitioner was not given a reasonable opportunity to present their case before the assessment order was passed.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 798879 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 15-12-2021
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India, IT Act
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: M V SESHACHALA
• Keywords: Bonafide reasons; Demand notice; Ex-parte assessment order; Natural Justice; Unavoidable circumstances
• Section: 156

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 15TH DAY OF DECEMBER, 2021 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.19247 OF 2021 (T-IT) BETWEEN: VIJAYANAGARA INSTITUTE OF MEDICAL SCIENCES, VIMS-OPD CANTONMENT, BELLARY-583 104. REP. BY ITS DIRECTOR, DR. T. GANGADHAR GOUDA. …PETITIONER (BY SRI M.V. SESHACHALA, SENIOR COUNSEL FOR SRI. ARAVIND V. CHAVAN, ADVOCATE) AND: 1. ASSESSING OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, NO.412-413, 1ST FLOOR, OPP. METRO PILLAR NO.793, DWARKA MOR, NEW DELHI-110059. 2. JURISDICTIONAL ASSESSING OFFICER, DEPUTY COMMISSIONER OF INCOME TAX EXEMPTIONS, ALBUQUERQUE HOUSE, OPP. FURM MALL, PANDESHWARA, MANGALORE-575 5001. 3. PRINCIPAL COMMISSIONER OF INCOME TAX EXEMPTIONS, C.R. BUILDING, QUEENS ROAD, BANGALORE-560 001. …RESPONDENTS (BY SRI K.V.ARAVIND, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE EXPARTE ASSESSMENT ORDER DTD 30.07.2021 PASSED BY THE R-1 VIDE ANNX-H AND DEMAND NOTICE U/S 156 OF THE IT ACT DTD 30.07.2021 VIDE ANNX-J. THIS W.P. COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:- 2 ORDER In this petition, petitioner seeks quashing of the impugned assessment order at Annexure-H and impugned Demand notice at Annexure-J, both dated 30.07.2021 and for other reliefs. 2. Heard Sri.M.V..Seshachala, learned Senior counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the documents produced by the petitioner, learned senior counsel for the petitioner submits that his authorised representative and Chartered Accountant - Sri.K.V.Chandrappa had represented and acted on behalf of the petitioner in all correspondence, filing of returns etc., and the Notice dated 22.09.2019 was sent to his e-mail on behalf of the petitioner. It is submitted that upon the death of the aforesaid K.V.Chandrappa on 30.11.2019, his email and contact became inoperative resulting in the petitioner not being aware of any communication / email sent to the 3 said K.V.Chandrappa including any notices sent by the respondents. Under these circumstances, the notices dated 22.02.2021, 06.04.2021 and 06.04.2021 issued by the respondents in the name of the petitioner and sent to the defunct / inoperative email address of the deceased K.V.Chandrappa did not come to the knowledge or attention of the petitioner who was neither aware of the same nor had the occasion or opportunity to reply to the said notices issued by the respondents. Under these circumstances, the petitioner could not reply nor furnish the details to the respondents as called for in their notices and consequently, in view of the inability and omission on the part of the petitioner to submit objections and furnish details and documents due to bonafide reasons, unavoidable circumstances and sufficient cause since the petitioner had no knowledge or information about the notices sent to his deceased Chartered Accountant, the respondents have proceeded to pass the impugned ex-parte assessment order, which is violative of principles of natural justice. It is further submitted that even the draft assessment order dated 15.04.2021 and ex-parte assessment order dated 4 30.07.2021 was communicated by the respondents to the aforesaid defunct / inoperative email address of K.V.Chandrappa about which the petitioner had not knowledge and that the petitioner came to know about the proceedings and the impugned order only subsequently, on 06.09.2021 when he received the Notice dated 31.08.2021 along with the assessment order and other documents. It is therefore contended that the impugned assessment order passed by the respondents without giving sufficient or reasonable opportunity to the petitioner is violative of principles of natural justice and the same deserves to be quashed and the matter be remitted back to the respondents for reconsideration afresh after giving an opportunity to the petitioner and considering his objections and documents and hearing him in accordance with law. 4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 5 5. As rightly contended by the learned senior counsel for the petitioner, the material on record including the death certificate of Sri.K.V.Chandrappa, the Chartered Accountant and the Authorised Representative of the petitioner who had represented him before the respondents having expired on 30.11.2019, the petitioner did not have any knowledge of any correspondence addressed by the respondents to the email address of the said K.V.Chandrappa, which had become defunct and inoperative resulting in the petitioner not being in a position to suitably reply to any of the notices issued by the respondents and file his objections and documents, details, particulars etc., as sought for by the respondents. It is clear that on account of the inability and omission on the part of the petitioner to file his objections and produce documents etc., due to bonafide reasons, unavoidable circumstances and sufficient cause, the respondents have proceeded to pass the ex-parte impugned order which deserves to be set aside and the matter remitted back to the respondents for reconsideration afresh after giving one more opportunity to the petitioner. 6 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned assessment order at Annexure-H bearing No.ITBA/AST/S/144/2021-22/10345327 84(1) dated 30.07.2021 and notice at Annexure-J bearing No.ITBA/AST/S/156/2021-22/10345329 56 dated 30.07.2021 are hereby quashed. (iii) The matter is remitted back to respondent No.1 – Assessment Officer for re-consideration afresh and by affording an opportunity to the petitioner to file objections and documents by giving him personal hearing in the matter in accordance with law. SD/- JUDGE Bmc/Srl. "