M/S NPH COOKING GALLERY vs. THE INCOME TAX OFFICER

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WP/7460/2025HC KarnatakaKAHC01016844202519 March 2025Bench: S.R.KRISHNA KUMAR5 pages
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What did the High Court hold?

The High Court allowed the petition, setting aside the impugned orders and notices at Annexures A, E, and G. The matter was remitted back to the Income Tax Officer (Respondent No. 1) for reconsideration. The Court directed that the reconsideration should commence from the stage of the petitioner submitting a reply to the Show Cause Notice under Section 148A(b) of the IT Act, dated 21/03/2022. Liberty was granted to the petitioner to submit additional pleadings and documents, which the respondent was directed to consider before proceeding further in accordance with law. The Court found it just and appropriate to grant one more opportunity to the petitioner, given their assertion of bonafide reasons and sufficient cause for not submitting the reply earlier.

What were the facts?

The petitioner, M/s NPH Cooking Gallery, filed a writ petition challenging assessment orders and notices issued by the Income Tax Officer and Principal Commissioner of Income Tax for Assessment Year 2018-19. The petitioner contended that they did not receive the notice issued under Section 148A(b) of the Income Tax Act, 1961, and therefore, could not submit a reply or response. They claimed this omission was due to bonafide reasons, unavoidable circumstances, and sufficient cause. The respondents argued that the petition had no merit and should be dismissed. The High Court noted that it was undisputed that the petitioner had not submitted a reply to the Section 148A(b) notice.

What were the issues?

1. Whether the assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961, dated 11/03/2024, and subsequent notices/orders are liable to be quashed, considering the petitioner's claim of non-receipt of the Section 148A(b) notice? Assessee's Contention: The petitioner argued that they did not receive the notice issued under Section 148A(b) of the Income Tax Act, 1961. Consequently, they were unaware of it and could not submit a reply or response with documents. This failure was attributed to bonafide reasons, unavoidable circumstances, and sufficient cause. They sought an opportunity to submit their reply by setting aside the impugned orders and notices. Revenue's Contention: The respondents submitted 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 147,Section 144,Section 156,Section 272(1)(d),Section 271AAC(1),Section 148A(b)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:11393 WP No. 7460 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 7460 OF 2025 (T-IT) BETWEEN:

M/S NPH COOKING GALLERY NO. 121, 1ST FLOOR, (OLD NO. 190), 6TH CROSS ROAD, GANDHINAGAR, BANGALORE – 560 009. (REPRESENTED BY ITS PARTNER, MR. HARSHA.V) (REGISTRAR V/S PARTNERSHIP ACT)

…PETITIONER (BY SRI. ARAVINDA S.N, ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER WARD 5(2) (1), BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BANGALORE – 560 034.

2.

THE PR. COMMISSIONER OF INCOME TAX BMTC BUILDING, 80 FEET ROAD KORMANGALA, BANGALORE – 560 034.

…RESPONDENTS (BY SRI. M THIRUMALESH, ADVOCATE AND SMT. ROOPA R ANANEKAR, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH ASSESSMENT ORDER PASSED UNDER SECTION 147 READ WITH SECTION 144 OF THE INCOME TAX ACT, 1961 DATED 11/3/2204 FOR A.Y.2018-19 BEARING DIN AND ORDER NO.ITBA/AST/S/147/2023- 24/1062420720(1) IS PRODUCED AS ANNEXURE-A AND ETC.,

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

Digitally signed by LEELAVATHI S R Location: High Court of Karnataka

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NC: 2025:KHC:11393 WP No. 7460 of 2025

CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks the following reliefs: (a) To Quash Assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961 dated 11/3/2204 for A.Y.2018-19 bearing DIN & Order No.ITBA/AST/S/147/2023-24/1062420720(1) is produced as Annexure-A. (b) To quash Copy of Notice of Demand issued under Section 156 of the Income Tax Act, 1961 dated 11/3/24 for A.Y.2018-19 bearing DIN & Notice No.ITBA/AST/S/156/2023-24/1062420801(1) is produced as -Annexure-B (c) To order dated 23/9/2024 passed under Section 272(1)(d) of the Income Tax Act, 1961 Act bearing No.ITBA/PNL/F/272A(1)(d)/2024-25/1068964963(1) dated 23/9/2024 is produced as Annexure-E (d) Notice of Demand issued under section 156 of the Act bearing ITBA/PNL/S/156/2024- 25/1068961451(1) 23/9/2024-Annexure-F. for Α.Υ.2018-19 dated (e) To quash order passed under section 271AAC(1) of the Act dated 23/9/24 bearing DIN No.ITBA/PNL/F/271AAC(1)/2024-25/1068956054(1)- for A.Y.2018-19 is produced as Annexure-G. (f) To quash Notice of demand dated 23/9/24 for A.Y.2018-19 bearing DIN & Notice

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NC: 2025:KHC:11393 WP No. 7460 of 2025

No.ITBA/PNL/S/156/2024-25/1068950946(1) is produced as Annexure- G1

and To issue any other Writ or direction or to grant such other relief or reliefs as deemed fit under the facts and circumstances of this case”

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 issued by the respondents under Section 148A(b) of the Income Tax Act, 1961 (for short, ‘IT Act’), was not received by petitioner and he 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 148A(b) 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

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NC: 2025:KHC:11393 WP No. 7460 of 2025

respondents may be directed to proceed further in accordance with law. 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 148A(b) notice. Under these circumstances, in view of the specific assertion on the part of the petitioner that his inability and omission to submit a reply along with documents to Section 148A(b) 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 orders at Annexure – A dated 11/03/2024, passed under Section 147 read with section 144 of the Income Tax Act, the order at Annexure-E dated 23/09/2024 passed under section 272(1)(d)of the Income Tax Act, the order at Annexure -G dated 23/09/2024 passed under section 271AAC(1) of the Income Tax Act and subsequent notice / orders, etc., and remit the matter back

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NC: 2025:KHC:11393 WP No. 7460 of 2025

to respondent No.1 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 148A(b) notice and to proceed further in accordance with law. 6. In the result, pass the following: ORDER (i) The petition is hereby allowed. (ii) Impugned notices / orders at Annexures A, E and G are hereby set aside. (iii) Matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 148A(b) of the IT dated 21/03/2022.

(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

MDS List No.: 2 Sl No.: 18

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