M/S KARUNA MOTORS (GULBARGA) PRIVATE LIMITED vs. THE INCOME TAX OFFICER

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WP/201155/2025HC KarnatakaKAHC03005410202520 June 2025Bench: M.I.ARUN5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned assessment order dated March 20, 2025, was passed without considering the TDS deducted and paid by the petitioner's vendor. Consequently, the assessment order was set aside. The matter was remanded back to Respondent No. 2 (National Faceless Assessment Centre) to the stage of the show cause notice dated January 30, 2025. The Court directed Respondent No. 2 to take into consideration the TDS, if any, paid on behalf of the petitioner by his vendor and thereafter pass appropriate orders in accordance with the law. The penalty notices issued under Section 274 read with Section 270A and Section 274 read with Section 271AAC of the Income Tax Act, both dated March 20, 2025, were also quashed and the matter was remanded for fresh consideration. The ratio decidendi is that an assessment order passed without considering crucial information like TDS paid by a vendor is liable to be set aside and remanded.

What were the facts?

The petitioner, M/s Karuna Motors (Gulbarga) Private Limited, filed a writ petition challenging an assessment order dated March 20, 2025, for Assessment Year 2023-24. The order assessed the petitioner's income at Rs. 34,32,38,679/-. The petitioner contended that the assessment order was passed without considering TDS already deducted and paid by the petitioner's vendor, despite a delay in filing the TDS. The revenue, through Respondent No. 1, conceded that the impugned order was passed without considering the alleged TDS paid on behalf of the petitioner by its vendor. The writ petition also challenged penalty notices issued under Sections 274 read with 270A and 274 read with 271AAC of the Income Tax Act, both dated March 20, 2025.

What were the issues?

1. Whether the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2023-24, is erroneous for failing to consider TDS deducted and paid by the petitioner's vendor? (Question of law and fact) Assessee's Contention: The assessment order is flawed as it did not take into account the TDS deducted and paid by the vendor, even though there was a delay in its filing. The Assessing Officer passed the order on the same day without the benefit of this information. Revenue's Contention: The impugned order was passed without considering the alleged TDS account said to have been paid on behalf of the petitioner by his vendor.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 274,Section 270A,Section 271AAC

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC-K:3278 WP No. 201155 of 2025

IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 20TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR. JUSTICE M.I.ARUN

WRIT PETITION NO.201155 OF 2025 (T-IT) BETWEEN:

M/S KARUNA MOTORS (GULBARGA) PRIVATE LIMITED, REPRESENTED BY BHEEMASHANKAR C. BILGUNDI, DIRECTOR OPP: KHB COMPLEX, RING ROAD, BILGUNDI GARDENS, GULBARGA-585105. …PETITIONER (BY SRI. S. V. RAVI SHANKAR, ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER, WARD 1 AND TPS, GULBARGA.

2.

NATIONAL FACELESS ASSESSMENT CENTRE, REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003.

…RESPONDENTS

(BY SRI. M. THIRUMALESH, ADVOCATE (VC))

Digitally signed by SHIVALEELA DATTATRAYA UDAGI Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC-K:3278 WP No. 201155 of 2025

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO I) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER PASSED U/SEC 143(3) R.W.S 144B DATED 20.03.2025 BEARING DIN.ITBA/AST/S/143(3)/2024-25/1074750553(1) ISSUED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2023-24 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/SEC 274 R.W.S.270A OF THE ACT DATED 20.03.2025 BEARING DIN NO. ITBA/PNL/S/270A/2024-25/1074750646(1) BY THE RESPONDENT NO. 2 FOR THE ASSESSMENT YEAR 2023-24 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 274 R.W.S 271AAC OF THE ACT DATED 20.03.2025 BEARING DIN NO. ITBA/PNL/S/271A(1)(D)-FL/2024-25/1074739340(1) BY THE RESPONDENT NO. 2 FOR THE ASSESSMENT YEAR 2023-24 HEREIN MARKED AS ANNEXURE-A-2.

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HC-KAR NC: 2025:KHC-K:3278 WP No. 201155 of 2025

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE M.I.ARUN

ORAL ORDER (PER: HON'BLE MR. JUSTICE M.I.ARUN)

The petitioner in the instant writ petition has challenged the assessment order dated 20.03.2025 in respect of the assessment year 2023-24, wherein the income of the petitioner is assessed at Rs.34,32,38,679/- and he has been asked to pay income tax based on the same.

2.

The case of the petitioner is that, the said impugned order has been passed without taking into consideration that TDS already deducted and paid by the vendor of the petitioner. It is further submitted that, there has been an element of delay in filing of the said TDS by the vendor of the petitioner and the said TDS also has

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HC-KAR NC: 2025:KHC-K:3278 WP No. 201155 of 2025

been paid and the assessing Officer has passed the impugned order on the same day and he did not have the benefit of the same and hence, the impugned order is erroneous.

3.

The learned counsel for respondent No.1 upon instruction submits that the impugned order is passed without taking into consideration the alleged TDS account said to have been paid on behalf of the petitioner by his vendor.

4.

Under the circumstances, as the impugned order is passed without taking into consideration the TDS deducted and paid by the vendor of the petitioner, the impugned assessment order dated 20.03.2025 is hereby set aside and the matter is remanded back to respondent No.2 to the stage of show cause notice dated 30.01.2025, with a direction to take into consideration the TDS, if any, paid on behalf of the petitioner by his vendor and thereafter pass appropriate orders in accordance with law.

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HC-KAR NC: 2025:KHC-K:3278 WP No. 201155 of 2025

Consequently, the assessment order dated 20.03.2025 vide Annexure-A to the writ petition issued by respondent No.2 for the assessment year 2023-24; the penalty notice under Section 274 read with Section 270A of the Income Tax Act dated 20.03.2025 by the respondent No.2 for the assessment year 2023-24 vide Annexure-A1 to the writ petition; and penalty notice under Section 274 read with Section 272A(1)(d) of the Income Tax Act, dated 20.03.2025 by the respondent No.2 for the assessment year 2023-24 vide Annexure-A2 to the writ petition stand quashed and the matter stands remanded back to respondent No.2 for fresh consideration of the case of the petitioner.

Writ petition stands disposed of accordingly.

Sd/- (M.I.ARUN) JUDGE SDU LIST NO.: 1 SL NO.: 74 CT:SI

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