SRI. DUMPA BRAHMANANDA REDDY vs. THE INCOME TAX OFFICER

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WP/19119/2025HC KarnatakaKAHC01042730202502 July 2025Bench: SURAJ GOVINDARAJ6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition. It quashed the assessment order dated March 15, 2024, and the penalty orders dated September 2, 2024, and September 20, 2024. The Court reasoned that the disallowed expenses, related to water supply, UGD facilities, electrification, and land leveling for a layout, were fundamental for the petitioner's business and ought to have been considered. The disallowance appeared to stem from the documents not being in English. Therefore, the Court found it necessary to grant the petitioner an opportunity to furnish translated copies of all documents to enable the Assessing Authority to consider them. The matter was remitted to the second respondent (National Faceless Assessment Centre) for fresh consideration based on the documents to be furnished by the petitioner within 30 days, with the portal to be activated within a week for submission.

What were the facts?

The petitioner, Sri. Dumpa Brahmananda Reddy, filed a writ petition before the High Court of Karnataka challenging an assessment order under Section 143(3) read with Section 144B of the Income Tax Act, 1961, dated March 15, 2024, for Assessment Year 2022-23. The petitioner also challenged two penalty orders, one under Section 272A(1)(d) dated September 2, 2024, and another under Section 270A dated September 20, 2024, both for the same assessment year. The core grievance was the disallowance of expenses incurred for property conversion and improvement due to the non-furnishing of necessary documents in English.

What were the issues?

1. Whether the assessment order passed under Section 143(3) read with Section 144B, and the subsequent penalty orders under Section 272A(1)(d) and Section 270A, are liable to be quashed on the grounds of procedural irregularities and lack of proper opportunity to the assessee? Assessee's Contentions: - The petitioner argued that while some documents were furnished, others, issued by local government authorities, were in a language requiring translation into English for submission to the Income Tax Department. - Due to the faceless assessment process, the petitioner contended that these documents could not be adequately explained, which, if done, might have led to a different conclusion by the Assessing Authority. Revenue's Contentions: - The revenue contended that the petitioner was granted sufficient opportunities to furnish the translated documents, with the first notice issued in 2023, providing ample time for translation. - The revenue argued that since the petitioner failed to utilize these opportunities, no indulgence should be granted by the Court.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 272A(1)(d),Section 270A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:23659 WP No. 19119 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 19119 OF 2025 (T-IT) BETWEEN:

SRI.DUMPA BRAHMANANDA REDDY AGED ABOUT 61 YEARS NO.57/2, BSR POULTRY FARM P B ROAD, GOLLARAHATTI VILLAGE DAVANGERE -577002 …PETITIONER (BY SRI.RAVI SHANKAR.S.V., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER WARD- I DAVANGERE -577002

2.

NATIONAL FACELESS ASSESSMENT CENTRE REP. BY 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 -11003 …RESPONDENTS (BY SRI.M.DILIP., ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER PASSED U/S 143(3) R.W.S 144B DTD. 15.03.2024 BEARING DIN ITBA/AST/S/143(3)/2023-24/1062660837(1) PASSED BY THE R-2

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:23659 WP No. 19119 of 2025

FOR THE ASSESSMENT YEAR 2022-23 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

1.

Sri.M.Dilip., learned counsel is directed to accept notice for respondents No.1 and 2. 2. The Petitioner is before this Court seeking for the following reliefs: 1. To 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 15.03.2024 bearing DIN:ITBA/AST/S/143(3)/2023-24/1062660837(1) passed by the R2 for the assessment year 2022-23 herein marked as Annexure-A.

2.

Issue a writ or certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 02.09.2024 issued u/s 272A(1)(d) of the Act bearing DIN and Notice No. ITBA/PNL/F/272A(1)(d)/2024- 25/1068256919(1) by the R2 for the assessment year 2022-23 herein marked as Annexure-A1.

3.

Issue a writ or certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 20.09.2024 issued u/s 270A of the Act bearing DIN and Notice No. ITBA/PNL/F/270A/2024- 25/1068923399(1) by the R2 for the assessment year 2022-23 herein marked as Annexure-A2.

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HC-KAR NC: 2025:KHC:23659 WP No. 19119 of 2025

4.

And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.

3.

The grievance of the petitioner in the present petitioner is that Assessment Order has been passed disallowing the expenses incurred for conversion of the property and improvement of the property on the ground that necessary documents have not been furnished. 4. Sri.Ravi Shankar.S.P., learned counsel for the petitioner submits that; 4.1. Though certain documents were furnished, certain documents could be furnished in the translated form in as much as most of those documents have been issued by the local government authorities and as such was required to be submitted in English language before the Income Tax Department.

4.2. His submission is that since the assessment is faceless, the documents could not be explained

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HC-KAR NC: 2025:KHC:23659 WP No. 19119 of 2025

and if the same could have been explained, the Assessing Authority would have come to a different conclusion. 5. Learned counsel for respondents would however submit that there is enough and more opportunity has been granted to the petitioner, which has not been utilized, in as much as the first notice was issued in the year 2023, the petitioner had enough and more time to translate the documents and furnish the same in the English language. The petitioner not having availed of the same, no indulgence is required to be extended by this Court in relation to the present order. 6. Having gone through the impugned assessment order, it is seen that the expenses which have been incurred are for water supply and UGD facilities, electrification of layout, land leveling and road which have been disallowed. These expenses are also some of the basic expenses required for a layout to be formed and sold by the Petitioner-Assessee and ought to have been taken into consideration by the

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HC-KAR NC: 2025:KHC:23659 WP No. 19119 of 2025

Assessing Authority. The same not having been done, apparently on account of the documents not being in English language, I am of the considered opinion that an opportunity would have to be granted to the petitioner to furnish all the translated copies, so as to enable the Assessing Authority to consider the said documents. 7. Learned counsel for the petitioner submits that given 30 days’ time the petitioner would furnish all the documents already supplied and any additional documents that the petitioner wishes to rely upon in support of the expenses incurred by the petitioner in English language. 8. Learned counsel for respondent submits that the portal will be activated in one week time from today to enable the petitioner to submit the said documents. 9. In that view of the matter, I pass the following; ORDER i. The writ petition is allowed.

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HC-KAR NC: 2025:KHC:23659 WP No. 19119 of 2025

ii. A certiorari is issued, order dated 15.03.2024 bearing DIN:ITBA/AST/S/143(3)/2023- 24/1062660837(1) passed by Respondent No.2 for the assessment year 2022-23 at Annexure-A, penalty order dated 02.09.2024 bearing DIN and Notice No. ITBA/PNL/F/272A(1)(d)/2024- 25/1068256919(1) passed by Respondent No.2 for the assessment year 2022-23 at Annexure-A1 and penalty order dated 20.09.2024 DIN and Notice No. ITBA/PNL/F/270A/2024- 25/1068923399(1) passed by Respondent No.2 for the assessment year 2022-23 at Annexure-A2, are hereby quashed. iii. The matter is remitted to respondent No.2 for a fresh consideration of the basis of the documents furnished by the petitioner as indicated above.

SD/- (SURAJ GOVINDARAJ) JUDGE SR/List No.: 1 Sl No.: 17

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