SRI KONDUR VENKATA SUBBARAJU vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

PDF · subscribers
WP/35070/2024HC KarnatakaKAHC01074491202404 February 2025Bench: S.G.PANDIT5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the order dated 25.07.2024 (Annexure-F) by which the petitioner's stay application was rejected. The Court found that the PCIT had rejected the application without considering the material placed on record, solely on the premise that the petitioner had not replied or participated before the Assessing Authority. The petitioner was granted liberty to file additional documents within ten days. Upon such filing, the PCIT was directed to pass an appropriate order on the stay application within fifteen days thereafter. The amount recovered by the revenue through attachment would be subject to the outcome of the fresh order on the stay application, and the attachment would continue until such fresh order is passed. The writ petition was disposed of with these directions.

What were the facts?

The petitioner, Sri Kondur Venkata Subbaraju, filed a writ petition challenging a notice issued under Section 226(3) of the Income Tax Act, 1961, for Assessment Year 2018-19 and seeking a refund of tax recovered. The petitioner had filed an appeal against the assessment order and a stay application before the Principal Commissioner of Income Tax (PCIT). The petitioner's grievance was that the PCIT rejected the stay application without providing an opportunity to be heard or considering the documents submitted. The revenue did not dispute the lack of opportunity. The petitioner had deposited Rs. 10,00,000, and Rs. 1,07,12,965 was recovered by attachment of his bank account.

What were the issues?

1. Whether the rejection of the petitioner's stay application by the Principal Commissioner of Income Tax (PCIT) was valid, considering the alleged lack of opportunity and non-consideration of documents? (Question of law and fact, turning on principles of natural justice and procedural fairness). Contentions: Assessee: The PCIT rejected the stay application without providing an opportunity to be heard and without considering the submitted documents. The petitioner seeks an opportunity to present his case for stay. Revenue: The revenue did not dispute the fact that no opportunity was provided to the petitioner. However, they agreed that the PCIT would reconsider the documents and pass a fresh order. They admitted the recovery of approximately Rs. 1,07,00,000 and the petitioner's deposit of Rs. 10,00,000.

Which sections of the Income-tax Act were involved?

Section 226(3)

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2025:KHC:4951 WP No. 35070 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 35070 OF 2024 (T-IT) BETWEEN: SRI KONDUR VENKATA SUBBARAJU S/O. ADINARYANA RAJU AGED ABOUT 53 YEARS RESIDING AT NO.22, BALAJI LAYOUT, R T NAGAR POST, BANGALORE 560 032. …PETITIONER (BY SRI. PRAKASH D., ADV.)

AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME TAX OFFICE OF THE INCOME TAX DEPARTMENT, C.R.BUILDING, NO.1, QUEENS ROAD, BANGALORE-560 001.

2.

THE INCOME TAX OFFICER, WARD 6(3)(1) O/O. PCIT-1, BMTC BUILDING, 80FT ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095.

3.

THE INCOME TAX OFFICER, WARD 6(1)(1), O/O. PCIT - 1, BMTC BUILDING, 80FT ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU 560 095.

4.

NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT,

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2025:KHC:4951 WP No. 35070 of 2024

GOVERNMENT OF INDIA, MINISTRY OF FINANCE, NEW DELHI - 110 001 (REP. BY PRINCIPAL COMMISSIONER OF INCOME TAX) …RESPONDENTS (BY SRI.M DILIP, ADV. FOR R1 TO R4)

THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO 1) QUASH NOTICE ISSUED BY RESPONDENT NO.2 U/S 226 (3) OF THE ACT IN DIN AND NOTICE NO.ITBA/RCV/S/226(3) 1/2023-24/1063335978(1) DATED 25.03.2024 WITH RESPECT TO AY-2018-19 AT ANNEXURE C; 2) DIRECT REFUND OF EXOBITANT TAX RECOVERY FROM THE PETITIONERS BANK HELD WITH M/S. AXIS BANK IN CURRENT ACCOUNT NO.9109020045868466 VIDE ANNEXURE-G AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.G.PANDIT

ORAL ORDER

Heard learned counsel Sri.Prakash.D., for petitioner and learned counsel Sri.M.Dilip for respondent Nos.1 to 4. Perused the writ petition papers.

2.

Learned counsel for the petitioner would submit that petitioner filed appeal before the respondent No.4 against the assessment order at Annexure-B dated 07.03.2023. The petitioner had also filed stay application before the first respondent against the order of assessment. It is the grievance of the petitioner that first

- 3 -

NC: 2025:KHC:4951 WP No. 35070 of 2024

respondent passed order on the stay application, without providing any opportunity to the petitioner. It is the contention of the petitioner that first respondent proceeded to reject the said application without looking into the documents filed by the petitioner. However, learned counsel would submit that the petitioner has deposited Rs.10,00,000/- and Rs.1,07,12,965/- is recovered by the respondents by attachment. Therefore, learned counsel would pray for an opportunity to make out a case for stay before the first respondent.

3.

Learned counsel Sri.M.Dilip for respondents- Revenue is not in a position to dispute the fact of not providing any opportunity to the petitioner by first respondent while rejecting the stay application. However, he submits that the first respondent would consider the documents submitted by the petitioner and pass order afresh. Further, learned counsel would submit that by attaching bank account of the petitioner, respondents have

- 4 -

NC: 2025:KHC:4951 WP No. 35070 of 2024

recovered a sum of Rs.1,07,00,000/- approximately and he admits the deposit of Rs.10,00,000/- by the petitioner.

4.

Having heard the learned counsel appearing for the parties and on perusal of the impugned order at Annexure-F dated 25.07.2024, I am of the view that first respondent without considering the material placed on record by the petitioner and only on the premise that petitioner had not replied or participated in the proceedings before the Assessing Authority proceeded to reject the said application.

5.

In the light of the above, the following: ORDER a) Annexure-F dated 25.07.2024 rejecting stay application of the petitioner is set aside.

b) The petitioner is at liberty to file additional documents, if any. Learned counsel for the petitioner would submit that within ten days, additional

- 5 -

NC: 2025:KHC:4951 WP No. 35070 of 2024

documents would be filed and if such additional documents are filed, thereafter, within fifteen days, the first respondent shall pass appropriate order on the stay application filed by the petitioner.

c) The amount recovered by the respondent by attachment would be subject to outcome of the order that would be passed by the first respondent.

d) The attachment shall continue till fresh orders are passed.

e) With the above, writ petition stands disposed of.

Sd/- (S.G.PANDIT) JUDGE

NC CT:bms List No.: 1 Sl No.: 21

More judgments on Section 226(3)

All 95 judgments and leading authorities on Section 226(3) →

Recent GST High Court judgments

Search GST case law →