BANGALORE SRINIVASAN BUDHARAJ vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/11930/2024HC KarnatakaKAHC01024678202420 March 2025Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. It acknowledged that the petitioner had not submitted a complete reply to the Section 142(1) notice. However, considering the petitioner's assertion that the omission was due to bonafide reasons, unavoidable circumstances, and sufficient cause, and their willingness to submit the remaining documents if granted another opportunity, the Court deemed it just and appropriate to set aside the impugned assessment order and all penalty notices. The matter was remitted back to the Assessing Officer (Respondent No. 1) for reconsideration from the stage of submitting the petitioner's reply to the Section 142(1) notice. The petitioner was granted liberty to submit additional pleadings and documents, which the respondent was directed to consider before proceeding further in accordance with the law. The Court found that setting aside the orders and granting an opportunity for a fresh consideration was in the interest of justice.

What were the facts?

The petitioner, Bangalore Srinivasan Budharaj, filed a writ petition before the High Court of Karnataka challenging an order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23, along with several penalty notices issued under Sections 270A, 271AAC(1), 271D, and 272A(1)(d) of the Act. The petitioner contended that they had filed a partial reply to the notice under Section 142(1) and sought an adjournment to furnish further documents, including bank statements. The petitioner argued that their inability to provide a complete response was due to bonafide reasons and unavoidable circumstances, and requested an opportunity to submit the remaining documents. The respondents argued that the petition lacked merit.

What were the issues?

1. Whether the impugned order passed under Section 143(3) read with Section 144B and the penalty notices issued under Sections 270A, 271AAC(1), 271D, and 272A(1)(d) are liable to be quashed on the grounds that the petitioner was not afforded a sufficient opportunity to furnish complete documentation in response to the Section 142(1) notice due to bonafide reasons and unavoidable circumstances? Assessee's Contention: The petitioner argued that their partial response to the Section 142(1) notice and subsequent requests for adjournment were due to bonafide reasons and unavoidable circumstances. They sought an opportunity to submit all required documents, asserting that if given another chance, they would comply. They relied on the principle of natural justice and the need for a fair opportunity to present their case. Revenue's Contention: The respondents argued that the petition had no merit and should be dismissed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 142(1),Section 270A,Section 271AAC(1),Section 271D,Section 272A(1)(d)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:11840 WP No. 11930 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.11930 OF 2024 (T-IT) BETWEEN:

BANGALORE SRINIVASAN BUDHARAJ NO.16, RAJ RESIDENCY, RESERVOIR STREET, BANGALORE SOUTH BASAVANAGUDI H.O., BENGALURU – 560 004. …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE) AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - 3 (1)(1) BENGALURU – 560 095.

2.

NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI – 110 003. …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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NC: 2025:KHC:11840 WP No. 11930 of 2024

ORDER PASSED U/S 143(3) R.W.S. 144B DATED 22/03/2024 BEARING ITBA/AST/S/143(3)/2023-24/1063215781(1) ISSUED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2022-23 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER In this petition, petitioner seeks the following reliefs: “i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order passed U/s 143(3) r.w.s 144B dated 22.03.2024 bearing ITBA/AST/S/143(3)/2023-24/1063215781(1) issued by the Respondent No.2 for the assessment year 2022-23 herein marked as Annexure-A. ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice u/s 270A of the Act dated 22.03.2024 bearing DIN No.ITBA/PNL/S/270A/2023-24/1063215942(1) by the Respondent No.2 for the assessment year 2022-23 herein marked as Annexure-A1. iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice u/s 271AAC(1)of the Act dated 22.03.2024 bearing DIN No.ITBA/PNL/S/271AAC(1)/2023-24/1063215943(1) by the Respondent No.2 for the assessment year 2022-23 herein marked as Annexure-A2.

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NC: 2025:KHC:11840 WP No. 11930 of 2024

iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice u/s 271D of the Act dated 22.03.2024 bearing DIN No.ITBA/PNL/S/271D/2023-24/1063215944(1) by the Respondent No.2 for the assessment year 2022-23 herein marked as Annexure-A3. v) Issue a writ of Certiorari or direction in the nature of writ of certiorari quashing the penalty notice u/s 272A(1)(d) of the Act dated 22.03.2024 bearing DIN No.ITBA/PNL/S/272A(1)(d)_FL/2023-24/1063213340(1) by the Respondent No.2 for the assessment year 2022-23 herein marked as Annexure-A4. vi) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”

2.

Heard learned 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 memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that petitioner had filed his reply in-part to the Notice under Section 142(1) of the Income Tax Act, 1961 (for short, ‘IT Act’) dated 07.07.2023 and to other subsequent notices issued by the respondents. The counsel for the petitioner also submits that the petitioner had sought for

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NC: 2025:KHC:11840 WP No. 11930 of 2024

adjournment in order to furnish other documents including bank account statements in reply to the said notices issued by the respondents, but they did not consider the same and proceeded to pass the impugned orders. It is submitted that the inability and omission on the part of the petitioner to submit reply / response in full along with documents to the Section 142(1) notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, if one more opportunity is provided to the petitioner to do so by setting aside the impugned orders and notices, the petitioner would do so and respondents may be directed to proceed further in accordance with law. 4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 5. A perusal of the impugned order will indicate that it is an undisputed fact that petitioner had not submitted reply / response in-part to Section 142(1) notice. Under these circumstances, in view of the specific assertion on the part of the petitioner that its inability and omission to submit a reply in full along with documents to Section 142(1) notice was due to bonafide

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NC: 2025:KHC:11840 WP No. 11930 of 2024

reasons, unavoidable circumstances and sufficient cause and if one more opportunity is granted, petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned orders at Annexure – A dated 22.03.2024 passed under Section 143(3) r.w.s. 144B of the IT Act, the notice at Annexure-A1 dated 22.03.2024 issued under Section 274 r/w 270A of the IT Act, the notice at Annexure – A2 dated 22.03.2024 issued under Section 274 r/w 271AAC(1) of the IT Act, the notice at Annexure – A3 dated 22.03.2024 issued under Section 274 r/w 271D of the IT Act and the notice at Annexure – A4 dated 22.03.2024 issued under Section 274 r/w 272A(1)(d) of the IT Act, subsequent notice / orders, etc., and remit the matter back to respondent No.1 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 142(1) notice and to proceed further in accordance with law. 6. In the result, pass the following: ORDER (i) The petition is hereby allowed. (ii) Impugned notices / orders at Annexures – A, A1, A2, A3 and A4 are hereby set aside.

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NC: 2025:KHC:11840 WP No. 11930 of 2024

(iii) Matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 142(1) of the IT Act dated 07.07.2023. (iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the respondent, who shall consider the same and proceed further in accordance with law.

Sd/- (S.R.KRISHNA KUMAR) JUDGE

SV List No.: 1 Sl No.: 83

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