M/S OZONE URBANA INFRA DEVELOPERS PRIVATE LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX,

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WP/22393/2025HC KarnatakaKAHC01049198202528 August 2025Bench: M.NAGAPRASANNA7 pages
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What did the High Court hold?

The High Court held that the proceedings were in violation of the principles of natural justice because the petitioner's repeated requests for a personal hearing were not granted. The Court noted that the revenue's counsel admitted this fact. Consequently, the Court allowed the writ petition, quashed the assessment order dated 30.06.2025, the demand notice dated 30.06.2025, and both penalty notices dated 30.06.2025. The matter was remitted back to the Assessing Officer (Respondent No. 1) with a direction to afford a personal hearing to the petitioner and then pass necessary orders in accordance with the law. The Court explicitly stated that all contentions of both parties shall remain open.

What were the facts?

The petitioner, M/s Ozone Urbana Infra Developers Private Limited, is challenging an assessment order dated 30/06/2025, a demand notice dated 30/06/2025, and penalty notices dated 30/06/2025, all issued by the Deputy Commissioner of Income Tax (Respondent No. 1) for Assessment Year 2022-23. The petitioner had previously filed a writ petition (W.P.No.12323/2024) against an earlier assessment order, which was remitted back to the Assessing Officer by a coordinate bench on 29.05.2024. Following the remittance, a notice was issued on 04.06.2025. The petitioner responded, requesting a personal hearing to explain their position, which was not granted. The impugned order was subsequently passed without granting this hearing or considering the grounds raised by the petitioner.

What were the issues?

1. Whether the assessment order, demand notice, and penalty notices issued by the respondent are liable to be quashed on the ground that the petitioner was denied an opportunity of personal hearing, in violation of principles of natural justice, as per Section 143(3) read with Section 260 and Section 270A/271B of the Income Tax Act, 1961? Assessee's Contentions: The petitioner argued that their request for a personal hearing, made thrice, was not granted. They contended that the Assessing Authority failed to consider the grounds projected in their reply and passed the impugned order without providing a personal hearing, which is in consonance with Circular dated 14.08.2019. The petitioner sought to substantiate the complexities and technicalities of their workings and revenues. Revenue's Contentions: The revenue's counsel admitted that despite the petitioner's repeated requests for a personal hearing, the impugned order was passed without granting it.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 260,Section 270A,Section 271B,Section 143(2),Section 274

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 22393 OF 2025 (T-IT)

BETWEEN:

M/S OZONE URBANA INFRA DEVELOPERS PRIVATE LIMITED, COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956, REPRESENTED BY ITS DIRECTOR, SRI. S. SAI PRASAD, S/O SRI. V. SATHYAMOORTHY, AGED ABOUT 51 YEARS, NO. 38, ULSOOR ROAD, BENGALURU - 560 042. PAN: AAECM5394G. …PETITIONER (BY SRI. A. SHANKAR, SENIOR COUNSEL FOR SRI. ANNAMALAI S, ADVOCATE)

AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), CR BUIDLINGS, NO. 1 QUEENS ROAD, BANGALORE - 560 001.

2.

THE JOINT COMMISSIONER OF INCOME TAX CENTRAL RANGE-2, CR BUILDINGS,

Digitally signed by NAGAVENI Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

NO. 1 QUEENS ROAD, BANGALORE - 560 001. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) RWS 260 DATED 30/06/2025 BEARING DIN NOI ITBA/AST/M/144/2025-26/1078051524(1) BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR. 2022-23 HEREIN MARKED AS ANNEXURE A1 AND ETC.,

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA

ORAL ORDER

The petitioner is before this Court seeking the following prayers: "i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the assessment order passed under Section 143(3) rws 260 dated 30/06/2025 bearing DIN No: ITBA/AST/M/144/2025-26/1078051524(1) by the Respondent No. 1 for the assessment year 2022- 23 herein marked as Annexure- A1.

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the demand notice dated 30/06/2025 bearing DIN & Notice No. ITBA/AST/M/144/2025-26/1078051525(1) issued by the Respondent No. 1 for the assessment year 2022-23 herein marked as Annexure - A2.

iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice issued under section 274 r.w Section 270A of the Act dated 30/06/2025 bearing DIN & Notice No. ITBA/PNL/S/270A/2025-26/1078054097(1) issued by the Respondent No. 1 for the assessment year 2022-23 marked as Annexure A3.

iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice issued under Section 274 read with 271B of the Act dated 30/06/2025 bearing DIN & Notice No. ITBA/PNL/S/2718/2025-26/1078054849(1) issued by the Respondent No. 1 for the assessment year 2022-23 marked as Annexure - A4.

v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice issued u/s 143(2) dated 31/05/2023 bearing DIN No. ITBA/AST/S/143(2)/2023-24/1053362865(1) issued by the Respondent No. 1 for the assessment year 2022-23 marked as Annexure - B.

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

2.

Heard Shri A. Shankar, learned senior counsel for Shri Annamalai S., learned counsel appearing for the petitioner and Shri M. Dilip, learned counsel appearing for the respondent.

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

3.

The issue revolves around a narrow compass, albeit at this juncture. A notice under Section 143(2) of the Income Tax Act, 1961 (for short ‘the Act’) is issued by the Assistant Commissioner of the Income Tax – the Prescribed Authority. An assessment order later comes to be passed on 29.03.2024. Aggrieved by the said assessment order, a writ petition comes to be filed in W.P.No.12323/2024. A coordinate bench remits the matter back to the hands of the first respondent in terms of the order dated 29.05.2024.

4.

In furtherance to the directions issued by the coordinate bench, a notice is issued on 04.06.2025. The petitioner replies to the notice, seeking grant of personal hearing so that he could explain the circumstance. This is not granted, order is passed. The order is impugned in the subject petition.

5.

Learned senior counsel submits that none of the grounds projected in the reply is even considered by the Authority in the impugned order. He would further submit that the personal hearing was sought not once, but thrice and the

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

impugned order comes to be passed, without granting personal hearing nor considering the grounds.

6.

At the penultimate paragraph, the request of the petitioner is as follows: "The assessee requests your Honours to kindly provide opportunity of personal hearing to substantiate the complexities, technicalities of POC workings, actual revenues accounted of the assessee in the interest of justice.

We will be happy to furnish any further information that you may desire to have during the proceedings."

The assessee requests that opportunity of personal hearing to substantiate the complexities, technicalities and actual revenues accounted of the assessee. Though the receipt of this order is acknowledged, no order is passed. The learned senior counsel submits that strong grounds are projected and none of them are considered, which was in consonance with the Circular dated 14.08.2019. Be that as it may.

7.

The learned counsel appearing for the respondent though would vehemently refute the submission, would admit the fact that in the teeth of personal hearing request by the petitioner, not once, but thrice, the impugned order comes to

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

be passed. It is therefore necessary to notice the representation of the petitioner made on 10.06.2025.

8.

Again on 12.06.2025, the same requisition springs. No order is passed granting personal hearing, but comes the impugned order.

9.

In that light, the proceedings are in violation of the principles of natural justice. Therefore, the matter will have to be remitted back to the hands of the Assessing Officer - respondent No.1 to hear the petitioner on a personal hearing and pass necessary orders, in accordance with law.

10.

For the aforesaid reasons, the following:

ORDER

a. The writ petition stands allowed b. The matter is remitted back to the hands of the respondent No.1 directing him to afford personal hearing to the petitioner and then pass necessary orders in accordance with law.

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HC-KAR NC: 2025:KHC:33462 WP No. 22393 of 2025

c. The assessment order dated 30.06.2025, demand notice dated 30.06.2025, penalty notices both dated 30.06.2025, stand quashed. d. All contentions of both the parties shall remain open.

Ordered accordingly.

Sd/- (M.NAGAPRASANNA) JUDGE

JY List No.: 1 Sl No.: 122 CT: BHK

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