BALLUPET BASAVARAJ DEVKUMAR vs. THE ASSESSMENT UNIT / INCOME TAX OFFICER

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WP/9482/2025HC KarnatakaKAHC01018564202517 April 2025Bench: S.R.KRISHNA KUMAR8 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition and set aside the impugned notices and orders. The Court noted that it was an undisputed fact that the petitioner had submitted a reply dated 27.02.2024 to the show cause notice dated 25.02.2024, along with supporting documents. However, the first respondent failed to consider this reply, stating that the petitioner had not furnished supporting documents. Under these circumstances, the Court found it just and appropriate to set aside the assessment order dated 25.03.2024 (Annexure A1), the rectification order dated 09.09.2024 (Annexure A4), and all subsequent notices and orders. The matter was remitted back to the first respondent for reconsideration afresh from the stage of the petitioner submitting his reply to the show cause notice. The petitioner was granted liberty to submit his replies and documents, which the first respondent was directed to consider, providing a sufficient and reasonable opportunity. The Court expressly kept all rival contentions open and expressed no opinion on the merits of the case.

What were the facts?

The petitioner, Ballupet Basaraj Devkumar, filed a writ petition challenging various orders and notices issued by the Income Tax Department for Assessment Year 2016-17. These included an assessment order dated 25.03.2024 under Section 147 r.w.s 144 r.w.s 144B, a rectification order dated 09.09.2024 under Section 154, penalty orders under Section 271(1)(c) and Section 271F, and earlier notices and orders related to reassessment proceedings under Section 148A. The petitioner contended that despite filing replies to various notices, including a reply dated 27.02.2024 to a show cause notice dated 25.02.2024, the respondents failed to consider these submissions before passing the impugned orders. The respondents argued that the petition lacked merit.

What were the issues?

1. Whether the assessment order dated 25.03.2024 passed under Section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961, for Assessment Year 2016-17, is liable to be quashed due to non-consideration of the petitioner's reply. (Question of law and fact, turning on Section 147, 144, 144B). 2. Whether the subsequent orders and notices, including penalty orders under Section 271(1)(c) and 271F, and earlier reassessment notices under Section 148A, are vitiated by the failure to consider the petitioner's submissions. Assessee's Contention: The petitioner argued that the respondents failed to consider his replies, particularly the one dated 27.02.2024 to the show cause notice dated 25.02.2024, before passing the impugned assessment order and subsequent penalty orders. He sought an opportunity to submit his replies and for the matter to be reconsidered. The petitioner relied on the procedural fairness expected in tax proceedings. Revenue's Contention: The respondents submitted that there was no merit in the petition and it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 156,Section 154,Section 271(1)(c),Section 271F,Section 148A,Section 151,Section 148

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:15971 WP No. 9482 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.9482 OF 2025 (T-IT)

BETWEEN:

BALLUPET BASAVARAJ DEVKUMAR SON OF BASAVARAJ, AGED ABOUT 48 YEARS, BALLUPET, BALLUPET POST, SAKLESHPUR TALUK, HASSAN, KARNATAKA -573 134 …PETITIONER (BY SRI A.SHANKAR, SENIOR ADVOCATE FOR SRI MADHUSUDHAN U A, ADVOCATE)

AND:

1.

THE ASSESSMENT UNIT / INCOME TAX OFFICER INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWARLAL NEHRU STADIUM, DELHI-110 003

2.

THE INCOME TAX OFFICER, WARD 1 - HASSAN, AAYAKAR BHAVAN, 2ND STAGE, BELUR ROAD, HASSAN, KARNATAKA -573 201

3.

THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KARNATAKA AND GOA, CENTRAL REVENUE BUILDING, QUEEN'S ROAD, BANGALORE – 560001 …RESPONDENTS (BY SRI M.THIRUMALESH AND SRI M.DILIP, ADVOCATES)

Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA

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NC: 2025:KHC:15971 WP No. 9482 of 2025

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ASSESSMENT ORDER DATED 25.03.2024 PASSED UNDER SECTION 147 R.W.S 144 R.W.S 144B OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2016-17 BY THE RESPONDENT NO.1 BEARING DIN NO. ITBA/AST/S/147/2023-24/1063341176(1) HEREIN MARKED AS ANNEXURE A1 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:

“a) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the assessment order dated 25.03.2024 passed under section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 for the Assessment Year 2016- 17 by the Respondent No.1 bearing DIN NO. ITBA/AST/S/147/2023-24/1063341176(1) herein marked as Annexure - A1. b) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the computation sheet dated 25.03.2024 issued by the Respondent No.1 for the Assessment Year 2016-17 bearing DIN & Document No. ITBA/AST/S/114/2023-24/1063341210(1) herein marked as Annexure - A2. c) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice of demand dated 25.03.2024 issued under section 156 of the Income Tax Act, 1961 by the Respondent No.1 for the Assessment Year

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NC: 2025:KHC:15971 WP No. 9482 of 2025

2016-17 bearing DIN & Notice No. ITBA/AST/S/156/2023- 24/1063341195(1) herein marked as Annexure - AЗ. d) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order dated 09.09.2024 passed under section 154 of the Income Tax Act, 1961 by the Respondent No.1 for the Assessment Year 2016-17 bearing DIN & Document No. ITBA/REC/M/154/2024- 25/1068451013(1) herein marked as Annexure - A4. e) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 26.09.2024 passed under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2016-17 by the Respondent No.1 bearing DIN No. ITBA/PNL/F/271(1)(c)/2024-25/1069220198(1) herein marked as Annexure - A5. f) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the computation sheet dated 26.09.2024 issued by the Respondent No.1 for the Assessment Year 2016-17 pertaining to the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 bearing DIN & Order No. ITBA/PNL/S/271(1)(c)/2023- 24/1063341230(1) herein marked as Annexure - A6. g) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice of demand dated 26.09.2024 issued under section 156 of the Income Tax Act, 1961 by the Respondent No.1 for the Assessment Year 2016-17 pertaining to the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 bearing DIN & Notice

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NC: 2025:KHC:15971 WP No. 9482 of 2025

No. ITBA/PNL/S/156/2024-25/1069209737(1) herein marked as Annexure - A7. h) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 25.09.2024 passed under section 271F of the Income Tax Act, 1961 for the Assessment Year 2016-17 by the Respondent No.1 bearing DIN No. ITBA/PNL/F/271F/2024- 25/1069203423(1) herein marked as Annexure - A8. i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the computation sheet dated 25.09.2024 issued by the Respondent No.1 for the Assessment Year 2016-17 pertaining to the penalty levied under section 271F of the Income Tax Act, 1961 bearing DIN & Order No. ITBA/PNL/S/271F/2023-24/1063341231(1) herein marked as Annexure - A9. j) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice of demand dated 25.09.2024 issued under section 156 of the Income Tax Act, 1961 by the Respondent No.1 for the Assessment Year 2016-17 pertaining to the penalty levied under section 156 of the Income Tax Act, 1961 bearing DIN & Notice No. ITBA/PNL/S/156/2024-25/1069203348(1) herein marked as Annexure - A10. k) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice issued under section 148A(b) of the Act dated 28.03.2022 of the Income Tax Act, 1961 for the Assessment Year 2016-17 by the Respondent

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NC: 2025:KHC:15971 WP No. 9482 of 2025

No.2 bearing DIN & Notice No. ITBA/AST/F/17/2022- 23/1051506363(1) herein marked as Annexure - B1. l) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order dated 31.03.2023 passed under section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2016-17 by the Respondent No.2 bearing DIN & Order No. ITBA/AST/F/148A/2022- 23/1051795914(1) herein marked as Annexure B2. m) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the approval granted under section 151 of the Act dated 31.03.2023 for the Assessment Year 2016-17 by the Respondent No.3 bearing DIN No. ITBA/AST/S/118/2022-23/1051790271(1) herein marked as Annexure - B3. n) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice dated 31.03.2023 issued under section 148 of the Income Tax Act, 1961 for the Assessment Year 2016-17 by the Respondent No.1 bearing DIN & Notice No. ITBA/AST/S/148_1/2022- 23/1051796353(1) herein marked as Annexure - B4.”

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 petition and referring to the material on record, learned Senior counsel for the petitioner submits that the respondents

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NC: 2025:KHC:15971 WP No. 9482 of 2025

issued notice dated 28.03.2023 under Section 148A(b) of the I.T.Act, to which the petitioner filed his reply. Thereafter, the respondents passed the impugned order dated 31.03.2023 under Section 148A(d) of the I.T.Act. Subsequently, the respondents issued various notices, to which the petitioner filed his replies dated 14.06.2023, 24.06.2023 and 23.11.2023 and with respect to the show cause notice dated 25.02.2024, the petitioner filed his reply dated 27.02.2024. However, the respondents failed to consider the same and proceeded to pass the impugned order under Section 147 r/w Section 144 r/w Section 144B of the I.T.Act at Annexure A1 dated 25.03.2024 and rectification order under Section 154 of the I.T. Act at Annexure A4 dated 09.09.2024. It is therefore submitted by the learned Senior counsel that if one more opportunity is provided to the petitioner to reply to the aforesaid notices issued by the respondents 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. 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.

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NC: 2025:KHC:15971 WP No. 9482 of 2025

5.

A perusal of the impugned order and the material on record will indicate that it is an undisputed fact that the petitioner submitted reply /response dated 27.02.2024 along with documents to the show cause notice dated 25.02.2024 and the 1st respondent failed to consider the said reply stating that the petitioner has not furnished supporting documents in support of the submissions/contentions made by the petitioner. Under these circumstances, I deem it just and appropriate to set aside the impugned order at Annexure–A dated 25.03.2024, rectification order under Annexure-A4 dated 09.09.2024 and subsequent notices / orders, etc., and remit the matter back to the 1st respondent for reconsideration afresh from the stage of petitioner submitting his reply/response to the show cause notice and in the event, the petitioner files his reply/ response, the 1st respondent is directed to consider such reply/ response filed by the petitioner and proceed further in accordance with law. 6. In the result, I pass the following: ORDER

(i) Petition is hereby allowed.

(ii) The impugned notices / orders at Annexures -A1 to A10 issued / passed by the 1st respondent are hereby set aside.

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NC: 2025:KHC:15971 WP No. 9482 of 2025

(iii) The matter is remitted back to the 1st respondent for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice dated 25.02.2024.

(iv) Liberty is reserved in favour of the petitioner to submit replies, responses, pleadings, documents, etc., to the 1st respondent, who shall consider the same and provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law. (v) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same.

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

kcm/SRL

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