SRI SHIVAPPA vs. THE INCOME TAX OFFICER

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WP/7999/2025HC KarnatakaKAHC01017086202521 March 2025Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka, in a justice-oriented approach, set aside the impugned assessment order dated February 28, 2024, and the penalty orders dated June 29, 2024. The matter was remitted back to the stage of the petitioner submitting a reply to the Show Cause Notice dated June 27, 2023, under Section 143. The respondents were directed to proceed further in accordance with law after considering the petitioner's reply, pleadings, and documents. The Court explicitly stated that all rival contentions were kept open and no opinion was expressed on the merits of the case. The principle here is that procedural fairness and providing an opportunity to be heard can outweigh the revenue's procedural objections when sufficient cause is shown for non-compliance.

What were the facts?

The petitioner, Sri Shivappa, filed a writ petition before the High Court of Karnataka challenging an order passed by the Income Tax Officer (ITO) under Section 144 read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23. This assessment order was followed by two penalty orders, one under Section 272A(1)(d) and another under Section 270A of the Act, both dated June 29, 2024. The petitioner contended that his inability to respond to notices and participate in the proceedings was due to bonafide and unavoidable circumstances. He sought to quash the assessment and penalty orders and requested one more opportunity to submit his reply and documents.

What were the issues?

1. Whether the assessment order passed under Section 144 read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23, and the subsequent penalty orders under Section 272A(1)(d) and Section 270A of the Act, should be quashed and the matter remitted back to the respondent for providing one more opportunity to the petitioner to submit his reply and participate in the proceedings, considering the petitioner's claim of bonafide and unavoidable circumstances. Assessee's Arguments: The petitioner argued that his failure to participate in the assessment proceedings was due to bonafide and unavoidable circumstances, constituting sufficient cause. He asserted that he has a good case on merits and, if granted another opportunity, he would submit his reply and documents, necessitating the setting aside of the impugned orders and remittance of the matter. Revenue's Arguments: The respondents contended that despite sufficient opportunities, the petitioner failed to send his reply or participate in the proceedings. Therefore, the impugned orders do not warrant interference, and the petition is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B,Section 272A(1)(d),Section 270A,Section 143

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:12153 WP No. 7999 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 7999 OF 2025 (T-IT) BETWEEN:

SRI SHIVAPPA AGED ABOUT 56 YEARS NO.1, MEGALAHATTI, RANGASAMUDRA POST, PAVAGADA 561202 PAN BSNPS7590H TUMKUR (D) 572101. …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER WARD 1 AND TPS AAYAKAR BHAVAN, RAMAKRISHNANAGAR, KUNIGAL ROAD, RAMAKRISHNA NAGAR, TUMKUR 572103

2.

NATIONAL FACELESS ASSESSMENT CENTRE, REPRESENTED BY 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 FOR R1 & R2)

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

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NC: 2025:KHC:12153 WP No. 7999 of 2025

THIS W.P. IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED U/S 144 R.W.S 144B DTD. 28.02.2024 BEARING DIN. ITBA/AST/S/144/2022-23/1048350645(1) PASSED BY THE R-1 FOR THE ASSESSMENT YEAR 2022-23 HEREIN MARKED AS ANNX-A AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, 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 28/02/2024 bearing DIN: ITBA/AST/S/144/2023-24/1061748615(1) passed by the Respondent No. 1 for the assessment year 2022-23 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 dated 29/06/2024 passed u/s 272A(1)(d) of the Act bearing DIN and Notice No. ITBA/PNL/F/272A(1)(d)/2024- 25/1066247475(1) by the Respondent No. 1 for the assessment year 2022-23 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 29/06/2024 bearing ITBA/PNL/F/270A/2024-25/1066266862(1) DIN by No.

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NC: 2025:KHC:12153 WP No. 7999 of 2025

the Respondent No. 1 for the assessment year 2022-23 herein marked as Annexure- A2. 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.

A perusal of the material on record will indicate that aggrieved by the order dated 28.02.2024 passed by respondent No.1 under Section 144 read with Section 144B of the Income Tax Act, pursuant to which, respondent No.1 issued the impugned penalty order dated 29.06.2024 at Annexure-A1 passed under Section 272A(1)(d) of the Act and impugned penalty order dated 29.06.2024 at Annexure-A2 passed under Section 270A of the Act and as such, the petitioner is before this Court by way of the present petition.

4.

In this context, it is pointed out that inability and omission on the part of the petitioner to submit replies to the notices issued by the respondents and to participate in the proceedings was due to bonafide and unavoidable circumstances and sufficient cause and consequently, the petitioner was not in a position to issue reply or appear before the respondents and

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NC: 2025:KHC:12153 WP No. 7999 of 2025

participate in the said proceedings. It is submitted that the petitioner has a good case to urge on merits and if one more opportunity is granted in favour of the petitioner, the petitioner would submit its reply along with the documents and participate in the proceedings and as such, it is necessary that the impugned orders / Notices at Annexures – A, A1 and A2 be set aside and the matter be remitted back to the respondents by providing one more opportunity to the petitioner to submit its reply to the notices and direct the respondents to proceed further in accordance with law.

5.

Per contra, learned counsel for the respondents submits that despite sufficient opportunity being granted in favour of the petitioner, the petitioner did not send its reply nor participated in the proceedings and consequently, the impugned order does not warrant interference by this Court and the petition is liable to be dismissed. 6. A perusal of the impugned order at Annexure – A will clearly indicate that the same was passed in the absence of the petitioner, who did not avail the opportunity provided by the respondent, who has proceeded to pass the impugned order. In view of the aforesaid facts and circumstances and specific

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NC: 2025:KHC:12153 WP No. 7999 of 2025

assertions on the part of the petitioner that due to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner was not in a position to send reply enclosing documents and contest the proceedings and in order to provide one more opportunity to the petitioner, by adopting a justice oriented approach, I deem it just and appropriate to set aside the impugned order and remit the matter back to the respondents for reconsideration afresh in accordance with law after providing one more opportunity to the petitioner in this regard.

7.

In the result, I pass the following: ORDER (i) The impugned notice / orders at Annexures – A, A1 and A2 dated 28.02.2024, 29.06.2024 and 29.06.2024, respectively, are hereby set aside. (ii) Matter is remitted back to the stage of petitioner submitting reply to Show Cause Notice dated 27.06.2023 under Section 143 and to proceed further in accordance with law. (iii) Liberty is reserved in favour of the petitioner to file its reply, pleadings, documents, etc., before respondent No.1, who shall consider

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NC: 2025:KHC:12153 WP No. 7999 of 2025

the same and pass appropriate orders in accordance with law. (iv) All rival contentions are kept open and no opinion is expressed on the same.

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

MDS List No.: 1 Sl No.: 24

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