THE MICO ASSOCIATES HOUSING CO OPERATIVE SOCIETY LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/30602/2025HC KarnatakaKAHC01065942202527 October 2025Bench: S.R.KRISHNA KUMAR5 pages
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What did the High Court hold?

The High Court allowed the petition. It was an undisputed fact that the petitioner had not submitted a reply to the Section 142(1) notice dated December 17, 2019. However, considering the petitioner's assertion that this omission was due to bonafide reasons, unavoidable circumstances, and sufficient cause, and that granting one more opportunity would enable the petitioner to submit its reply and documents, the Court deemed it just and appropriate to set aside the impugned orders. The Court quashed the order dated September 21, 2021 (under Section 144 r.w.s. 144B), the order dated February 1, 2022 (under Section 272A(1)(d)), and the order dated February 22, 2022 (under Section 270A). The matter was remitted back to the National Faceless Assessment Centre (Respondent No. 2) for reconsideration from the stage of submitting the petitioner's reply to the Section 142(1) notice. Liberty was granted to the petitioner to submit additional pleadings and documents, which the respondent was directed to consider. The principle established is that procedural lapses due to bonafide reasons and sufficient cause, leading to non-compliance with notices, can warrant setting aside of assessment and penalty orders and remanding the matter for fresh consideration.

What were the facts?

The petitioner, The Mico Associates Housing Co-operative Society Limited, filed a writ petition before the High Court of Karnataka challenging orders passed by the Deputy Commissioner of Income Tax (Respondent No. 1) and the National Faceless Assessment Centre (Respondent No. 2). The assessment year in question is 2018-19. The petitioner sought to quash an order passed under Section 144 read with Section 144B of the Income Tax Act, 1961, dated September 21, 2021, and two penalty orders dated February 1, 2022 (under Section 272A(1)(d)) and February 22, 2022 (under Section 270A). The core of the petitioner's grievance was that a notice dated December 17, 2019, issued under Section 142(1) of the Act, was not received as it was sent to the e-mail of its previous tax consultant, preventing it from submitting a response. The amount in dispute is not specified. The matter proceeded to a hearing before the High Court.

What were the issues?

1. Whether the order passed under Section 144 read with Section 144B of the Income Tax Act, 1961, dated September 21, 2021, and the subsequent penalty orders dated February 1, 2022 (under Section 272A(1)(d)) and February 22, 2022 (under Section 270A) for the assessment year 2018-19 are liable to be quashed on the grounds of non-receipt of a crucial notice? Assessee's Contentions: The petitioner argued that the notice dated December 17, 2019, issued under Section 142(1) of the IT Act, was not received because it was sent to the e-mail address of its former tax consultant. Consequently, the petitioner was unaware of the notice and could not provide a reply or necessary documents. This failure was attributed to bonafide reasons, unavoidable circumstances, and sufficient cause. The petitioner requested one more opportunity to submit its response by setting aside the impugned orders. Revenue's Contentions: The respondents argued 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 144,Section 144B,Section 142(1),Section 272A(1)(d),Section 270A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:42996 WP No. 30602 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 30602 OF 2025 (T-IT) BETWEEN:

THE MICO ASSOCIATES HOUSING CO-OPERATIVE SOCIETY LIMITED REGISTERED UNDER SECTION 7 OF THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959, NO.290/2, 2ND FLOOR, LAKSHMI ARCADE, H. SIDDAIAH ROAD, WILSON GARDEN, BENGALURU – 560 027 REPRESENTED BY ITS PRESIDENT, SADASHIVA MURTHY, AGED 58 YEARS, S/O T KEMPANNA, R/A 312, 11TH CROSS, 2ND BLOCK, VISHWAPRIYANAGARA, BEGUR ROAD, BANGALORE – 560 068. …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX

CIRCLE 7(1)(1),

BANGALORE – 560 095.

2.

NATIONAL FACELESS ASSESSMENT CENTRE,

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-110003. …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE)

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:42996 WP No. 30602 of 2025

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED U/S 144 R.W.S 144B DATED 21.09.2021 BEARING DIN ITBA/AST/S/144/2021-22/1035760088(1) PASSED BY THE R-2 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNX-A AND ETC.

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:

“i) Issue a writ of certiorari or direction in the nature of a writ of certiorari quashing the order passed u/s 144 r.w.s 144B dated 21/09/2021 bearing DIN ITBA/AST/S/144/2021-22/1035760088(1) passed by the respondent No.2 for the assessment year 2018-19 herein marked as Annexure - A.

ii) Issue a writ of certiorari or direction in the nature of a writ of certiorari quashing the penalty order u/s 272A(1)(d) of the Act dated 01/02/2022 bearing DIN No.ITBA/PNL/F/272A(1)(d)/2021-22/1039287789(1) by the Respondent No.2 for the assessment year 2018-19 herein marked as Annexure - A1.

iii) Issue a writ of certiorari or direction in the nature of a writ of certiorari quashing the penalty order u/s 270A of the Act dated 22/02/2022 bearing DIN No. ITBA/PNL/F/270A/2021-22/1040011786(1) by the Respondent No.2 for the assessment year 2018-19 herein marked as Annexure - A2.

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HC-KAR NC: 2025:KHC:42996 WP No. 30602 of 2025

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

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 notice dated 17.12.2019 issued by the respondents under Section 142(1) of the Income Tax Act, 1961 (for short, ‘IT Act’) was not received by petitioner as the same was sent to the e-mail id of its previous tax consultant and hence, it was not aware of the notice and consequently, petitioner could not submit its reply / response along with documents to the said notice. It is submitted that the inability and omission on the part of the petitioner to submit reply / response along with documents to the Section 142(1) notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, if one more opportunity is provided to the petitioner to do so by setting aside the impugned orders and notices, the petitioner would do so and respondents may be directed to proceed further in accordance with law.

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HC-KAR NC: 2025:KHC:42996 WP No. 30602 of 2025

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 not submitted reply / response along with documents to Section 142(1) notice dated 17.12.2019. Under these circumstances, in view of the specific assertion on the part of the petitioner that its inability and omission to submit a reply along with documents to Section 142(1) notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and if one more opportunity is granted, petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned order at Annexure – A dated 21.09.2021 passed under Section 144 r.w.s. 144B of the Income Tax Act and the order at Annexure-A1 dated 01.02.2022 passed under Section 272A(1)(d) of the Income Tax Act, the order at Annexure-A2 dated 22.02.2022 passed under Section 270A of the Income Tax Act and subsequent notice / orders, etc., and remit the matter back to respondent No.2 for reconsideration afresh from the

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HC-KAR NC: 2025:KHC:42996 WP No. 30602 of 2025

stage of submitting of reply by the petitioner to Section 142(1) notice and to proceed further in accordance with law. 6. In the result, pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned notices / orders at Annexures A, A1 and A2 are hereby set aside. (iii) Matter is remitted back to respondent No.2 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice dated 17.12.2019 under Section 142(1) of the IT Act. (iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the respondent, who shall consider the same and proceed further in accordance with law.

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

SV List No.: 2 Sl No.: 46

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