KARISHMA PARADISE AND HILL COUNTRY vs. ASSESSING OFFICER INCOME TAX OFFICER

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WP/12661/2021HC KarnatakaKAHC01024074202102 April 2025Bench: S.R.KRISHNA KUMAR4 pages
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What did the High Court hold?

The High Court allowed the writ petition. It was an undisputed fact that the petitioner had submitted a reply along with documents to the notice issued under Section 142(1) of the IT Act, and the Assessing Officer had not considered this reply. Adopting a justice-oriented approach and to provide one more opportunity to the petitioner, the Court set aside the impugned assessment order and the notices issued consequent to the Section 142(1) notice. The matter was remitted back to the Assessing Officer for reconsideration afresh from the stage of submitting the reply to the notice dated September 23, 2019. Liberty was granted to the petitioner to submit additional pleadings and documents, which the Assessing Officer was directed to consider before proceeding in accordance with law. The ratio decidendi is that an assessment order passed without considering the assessee's response to a Section 142(1) notice is unsustainable and warrants a remand for fresh consideration.

What were the facts?

The petitioner, Karishma Paradise and Hill Country, filed a writ petition before the High Court of Karnataka challenging an assessment order dated April 22, 2021, passed by the Assessing Officer (National E-Assessment Centre). The petitioner contended that despite submitting replies and supporting documents to notices issued under Section 142(1) of the Income Tax Act, 1961, on September 23, 2019, December 8, 2020, January 26, 2021, and March 4, 2021, these submissions were not considered. Consequently, an ex-parte assessment order was passed under Section 143(3) read with Section 144B of the Act. The petitioner sought to quash this order and sought an opportunity to resubmit their reply.

What were the issues?

1. Whether the assessment order dated April 22, 2021, passed by the Assessing Officer under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is liable to be quashed on the grounds that the petitioner's replies to notices under Section 142(1) were not considered? Assessee's Contentions: The petitioner argued that they had responded to the notices issued under Section 142(1) of the IT Act with supporting documents. However, the respondent authorities failed to consider these submissions and proceeded to pass an ex-parte assessment order. The petitioner sought permission to resubmit their reply and have the impugned order set aside. Revenue's Contentions: The revenue contended that there was no merit in the petition and that it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:13795 WP No. 12661 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 12661 OF 2021 (T-RES) BETWEEN:

KARISHMA PARADISE AND HILL COUNTRY, NO. 46/1, TURUHALLI VILLAGE, SUBRAMANPURA POST, UTTARAHALLI, BENGALURU – 560 061. REP. BY ITS MANAGING DIRECTOR, SRI. T.D. SURESH …PETITIONER (BY SRI. M.V. SESHACHALA, SR. COUNSEL FOR SRI. G.S.NAGHARISH, ADVOCATE)

AND:

1.

ASSESSING OFFICER

INCOME TAX OFFICER, NATIONAL E ASSESSMENT CENTRE, NO. 412-413, 1ST FLOOR, OPP. METRO PILLAR NO. 793 DWARKA MOR, NEW DELHI – 110 059.

2.

THE JURISDICTIONAL ASSESSING OFFICER, ASST. COMMR. OF INCOME TAX, WARD-4(1)(1), BMTC BUILDING, KORAMANGALA, BENGALURU – 560 095.

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-4, BMTC BUILDING, KORAMANGALA, BENGALURU – 560 095. …RESPONDENTS (BY SRI. E.I. SANMATHI AND SRI. M. DILIP, ADVOCATES)

Digitally signed by NANDINI D Location: High Court of Karnataka

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NC: 2025:KHC:13795 WP No. 12661 of 2021

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED 22.04.2021 BEARING NO.ITBA/AST/S/143(3)2021-22/1032611107(1) PASSED BY 1ST RESPONDENT PRODUCED AS ANNEXURE –N.

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: “a. Issue a writ of certiorari to quash the assessment order dated 22.04.2021 bearing No.ITBA /AST/S/143(3)2021-22/1032611107(1) passed by first respondent produced as Annexure-J.

b. Issue such other writ or direction as this Hon’ble Court deem fit to grant in the facts and circumstances of the present case.”

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, though the petitioner had replied/responded to the notices issued by respondent No.1 under Section 142(1) of the Income Tax Act, 1961

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NC: 2025:KHC:13795 WP No. 12661 of 2021

(for short, ‘IT Act’), dated 23.09.2019, 08.12.2020, 26.01.2021 and 04.03.2021 along with supporting documents, the respondents have not considered the said reply/response and proceeded to pass exparte assessment order dated 22.04.2021 under Section 143(3) read with Section 144B of the IT Act. Therefore, the petitioner may be permitted to reply to the said notice once again by setting aside the impugned order and notices passed/issued consequent to the notice dated 23.09.2019 issued under Section 142(1) of the IT Act. 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 has submitted his reply/response along with documents to the notice issued under Section 142(1) of the IT Act and respondent No.1 has not considered the reply filed by the petitioner. Under these circumstances, by adopting a justice oriented approach and in order to provide one more opportunity to the petitioner to give his reply to the notice issued under Section 142(1) of the IT Act, I deem it just and appropriate to set-aside the

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NC: 2025:KHC:13795 WP No. 12661 of 2021

impugned order/notice issued consequent to the notice issued under Section 142(1) of the IT Act and remit the matter back to the respondents for reconsideration afresh in accordance with law. 6. In the result, I proceed to pass the following: O R D E R (i) The petition is hereby allowed; (ii) Impugned Assessment Order dated 22.04.2021 at Annexure-J passed by respondent No.1 is hereby set aside; (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 notice under Section 142(1) of the IT Act at Annexure–D dated 23.09.2019. (iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the respondent No.1, who shall consider the same and proceed further in accordance with law.

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

MDS List No.: 1 Sl No.: 53

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