NAVEEN KOTTGERE SHIVAPRAKASH vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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WP/12490/2024HC KarnatakaKAHC01022350202424 July 2024Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka, while hearing the writ petition, noted that a final show cause notice was issued on 29.02.2024 with a compliance date of 05.03.2024. It was a matter of record that the petitioner had sought an adjournment on 05.03.2024, which was the last date for compliance. A perusal of the assessment order did not reveal that this adjournment request was expressly considered, although the assessing officer noted that the assessee had "slept over his rights." The court observed that the variation proposed and made was on the premise that the petitioner was unable to explain the source of the cash deposit. Considering the facts and the request for adjournment, the court deemed it appropriate to extend one last opportunity to the petitioner. Consequently, the ex-parte assessment order dated 19.03.2024 was set aside, and the matter was remitted back to the stage post the show cause notice dated 29.02.2024. The petitioner was directed to pay a cost of Rs.10,000/- to respondent No.2. All contentions were kept open.

What were the facts?

The petitioner, Naveen Kottgere Shivaprakash, filed a writ petition challenging an ex-parte order of assessment for Assessment Year 2015-16, passed under Section 144 read with Section 254 and Section 144B of the Income Tax Act, 1961. The petitioner contended that a final show cause notice was issued on 29.02.2024 with a compliance date of 05.03.2024. On 05.03.2024, the petitioner requested an adjournment due to bonafide reasons. However, the assessment order, which treated a cash deposit of Rs.59,06,448/- as an unexplained cash credit under Section 68, did not refer to this adjournment request. The petitioner stated that if the matter was remanded, he could explain the source of the deposit. The revenue opposed the remand, arguing it was a second round of litigation and previous opportunities were not availed.

What were the issues?

1. Whether the ex-parte assessment order passed under Section 144 read with Section 254 and Section 144B of the Income Tax Act, 1961, for Assessment Year 2015-16, is liable to be quashed on the grounds that the petitioner's request for adjournment was not considered. Assessee's Contentions: - The petitioner argued that a bonafide request for adjournment made on the last date of compliance (05.03.2024) was not considered by the Assessing Authority before passing the ex-parte assessment order. - The petitioner stated that the assessment order failed to refer to the adjournment request and proceeded to make variations based on a best judgment assessment. - The petitioner expressed willingness to explain the source of the cash deposit of Rs.59,06,448/- if the matter was remanded. Revenue's Contentions: - The revenue opposed the remand, submitting that this was the second round of litigation and the petitioner had not availed of earlier opportunities. - The revenue argued that no grounds were made out to extend any indulgence to the petitioner.

Which sections of the Income-tax Act were involved?

Section 144,Section 254,Section 144B,Section 68

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:29146 WP No. 12490 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12490 OF 2024 (T-IT) BETWEEN: NAVEEN KOTTGERE SHIVAPRAKASH, AGED ABOUT 49 YEARS, NO. 337/1A, 18TH CROSS, UPPER PALACE, ORCHARDS, SADASHIVANAGAR, BANGALORE - 560 080. …PETITIONER (BY SRI. MALLAHAR RAO, ADVOCATE) AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME TAX, BENGALURU - 4, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(3)(1), ROOM NO. 438, 4TH FLOOR, BMTC BUILDING, 6TH BLOCK - 560 095. 3. THE NATIONAL FACELESS, ASSESSMENT UNIT, INCOME TAX DEPARTMENT ROOM NO. 245A, NORTH BLOCK, NEW DELHI - 110 001. …RESPONDENTS (BY SRI. M. DILIP, JR. STANDING COUNSEL) Digitally signed by YAMUNA K L Location: High Court of Karnataka

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NC: 2024:KHC:29146 WP No. 12490 of 2024

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE EX- PARTE ORDER UNDER SECTION 144 R.W.S 254 R.W.S 144B OF THE INCOME TAX ACT DATED 19.03.2024 VIDE DIN NO. ITBA/AST/S/144/2023-24/1062940328(1) FOR THE ASSESSMENT YEAR 2015-16 AT ANNEXURE-G AND ANNEXURE- H PASSED BY R3 AND ETC.,

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER (PER: HON'BLE MR JUSTICE S SUNIL DUTT YADAV) The petitioner has sought for setting aside of the ex- parte order of the assessment passed under Section 144 read with Section 254 read with Section 144B of the Income Tax Act, 1961 (for short 'the Act') for the assessment year 2015-16.

2.

It is the case of the petitioner that the authority during the course of the assessment proceedings on 29.02.2024 had issued a final show cause notice and date of compliance was 05.03.2024 and due to certain bonafide reasons, a request was made for adjournment at Annexure-'F' on 05.03.2024 which was the last date of

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NC: 2024:KHC:29146 WP No. 12490 of 2024 compliance made out in the show cause notice of 29.02.2024.

3.

It is submitted that in the assessment order, the Assessing authority has not referred to the request of adjournment and matter was proceeded with and variation was made and assessment was concluded on the basis of the best judgment assessment. It is submitted that the cash deposit of Rs.59,06,448/- has been construed to be an unexplained cash credit under Section 68 of the Act.

4.

Learned counsel for the petitioner submits that if the matter is remanded, he would be in a position to explain the source of such deposit.

5.

Learned counsel Sri. M. Dilip appearing for the respondents vehemently opposes the remand back of the matter and submits that it is the second round of litigation and earlier opportunities afforded have not been availed of and accordingly, there is no ground made out to extend any indulgence to the petitioner.

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NC: 2024:KHC:29146 WP No. 12490 of 2024

6.

Heard both sides.

7.

It is not in dispute as is made out from the details of opportunities given at paragraph No.2 of the assessment order at Annexure-'G' that the final show cause notice was made on 29.02.2024 fixing the date of compliance as 05.03.2024. It is a matter of record that the petitioner has sought for an adjournment as is evidenced at Annexure-'F' which request was made on 05.03.2024 which was the last date fixed for compliance as regards the show cause notice of 29.02.2024.

8.

A perusal of the assessment order does not reveal that this request for adjournment has been considered expressly, though the assessing officer has referred in the order that the assessee has slept over his rights. It must be noticed that variation has been proposed and made on the premises that the petitioner is unable to explain the source of cash deposit.

9.

In light of the facts made out and also noticing the request for adjournment that was made, it would be

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NC: 2024:KHC:29146 WP No. 12490 of 2024 appropriate to extend one last opportunity to the petitioner to make out his case before the authority. Accordingly, the order at Annexures-'G' and 'H' are set aside. Matter is remitted back to the stage post show cause notice dated 29.02.2024.

10.

The petitioner to make out his reply expeditiously. However, taking note that this is a second round of litigation and there has been some lapse on part of the petitioner in not adhering to the time line of compliance, petitioner is to pay the cost of Rs.10,000/- to respondent No.2 and such cost is not to be construed as the amount paid towards any claim of the revenue.

11.

Accordingly, petition is disposed off. All contentions are kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR

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