KIRAN SHAGLE CHIKKAPPA vs. INCOME TAX OFFICER

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WP/9644/2025HC KarnatakaKAHC01019836202502 April 2025Bench: S.R.KRISHNA KUMAR7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in its discretion, decided to set aside the impugned orders and remit the matter back to the respondents. The Court acknowledged the petitioner's assertion of bonafide reasons, unavoidable circumstances, and sufficient cause for their inability to respond to notices and participate in the proceedings. Adopting a justice-oriented approach, the Court deemed it appropriate to provide the petitioner with one more opportunity. The assessment order dated March 28, 2024, and all subsequent penalty, rectification, and demand notices were set aside. The matter was remitted back to the stage of the petitioner submitting a reply to the Show Cause Notice dated March 17, 2024. The petitioner was granted liberty to file their reply, pleadings, and documents, which the respondents are to consider before passing fresh orders in accordance with the law. All rival contentions were kept open, and no opinion was expressed on the merits of the case.

What were the facts?

The petitioner, Kiran Shagle Chikkappa, is challenging multiple orders passed by the Income Tax Department for Assessment Year 2022-23. These include an assessment order under Section 143(3) read with Section 144B dated March 28, 2024, penalty orders under Sections 272A(1)(d), 270A, and 271AAC(1) dated September 5, 17, and 19, 2024, respectively, a rectification order under Section 154 read with Section 143(3) dated January 22, 2025, and a demand notice dated February 11, 2025. The petitioner contends that these orders were passed ex-parte due to bonafide and unavoidable circumstances preventing them from responding to notices and participating in proceedings. The respondents argue that sufficient opportunities were given and the petition should be dismissed.

What were the issues?

1. Whether the ex-parte assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23, and subsequent penalty, rectification, and demand orders, are liable to be quashed on the grounds of the petitioner's inability to participate due to bonafide and unavoidable circumstances. Assessee's Contention: The petitioner argues that due to bonafide and unavoidable circumstances, they could not submit replies to the notices issued by the respondents and participate in the proceedings. They claim to have a good case on merits and seek one more opportunity to submit their reply and documents. They rely on the principle of providing a fair opportunity to contest proceedings. Revenue's Contention: The respondents contend that despite sufficient opportunities granted, the petitioner failed to send replies 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 143(3),Section 144B,Section 272A(1)(d),Section 270A,Section 271AAC(1),Section 154

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:13793 WP No. 9644 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 9644 OF 2025 (T-IT) BETWEEN:

KIRAN SHAGLE CHIKKAPPA, AGED ABOUT 52 YEARS, S/O SHAGLE CHIKKAPPA, NO.151B, SOBHA MALADHETE, JAKKUR PLANTATION, YELAHANKA HOBLI, BANGALORE – 560 064. PAN: AJXPC0056A

PERMANENTLY RESIDING AT, NO.16338, SANTA CRISTOBAL STREET, SAN DIEGO, CALIFORNIA, USA - 92127. (PRESENTLY IN INDIA) …PETITIONER (BY SRI. RAVI SHANKAR S. V., ADVOCATE)

AND:

1.

INCOME TAX OFFICER, WARD 6(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 – 110 003.

3.

INCOME TAX OFFICER, WARD 1, INTERNATIONAL TAXATION,

BANGALORE – 560 095. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE)

Digitally signed by NANDINI D Location: High Court of Karnataka

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NC: 2025:KHC:13793 WP No. 9644 of 2025

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED U/S 143(3) R.W.S 144B OF THE ACT DATED 28.03.2024 BEARING ITBA/AST/S/143(3)/2023-24/1063512107(1) PASSED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2022-23 HEREIN MARKED AS ANNEXURE-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 143(3) r.w.s 144B of the Act dated 28/03/2024 bearing ITBA/AST/S/143(3)/2023-24/1063512107(1) passed by the Respondent No.2 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 u/s 272A(1)(d) of the Act dated 05/09/2024 bearing DIN No. ITBA/PNL/F/272A(1)(d)/2024-25/1068385759(1) by the Respondent No.2 for the assessment year 2022-23 herein marked as Annexure A1. iil) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under

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NC: 2025:KHC:13793 WP No. 9644 of 2025

section 270A of the Act, dated 17/09/2024 bearing DIN No. ITBA/PNL/F/270A/2024-25/1068807845(1) by the Respondent No. 2 for the assessment year 2022-23 herein marked as Annexure - A2. iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order u/s 271AAC(1)of the Act dated 19/09/2024 bearing DIN No. ITBA/PNL/F/271AAC(1)/2024- 25/1068841505(1), by the Respondent No. 2 for the assessment year 2022-23 herein marked as Annexure - АЗ. v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the rectification order u/s 154 r.w.s 143(3) of the Act dated 22/01/2025 bearing DIN No. ITBA/REC/S/154_1/2024- 25/1072419093(1), by the Respondent No.1 for the assessment year 2022-23 herein marked as Annexure - A4. vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the demand notice dated 11/02/2025 bearing DIN No. ITBA/COM/F/17/2024- 25/1073117701(1), by the Respondent No.1 for the assessment year 2022-23 herein marked as Annexure A5.

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NC: 2025:KHC:13793 WP No. 9644 of 2025

vii) 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 the respondent having issued Show Cause Notice dated 17.03.2024, petitioner did not submit any reply to the same and as such, respondent No.2 proceeded to pass the impugned exparte assessment order at Annexure-A dated 28.03.2024 under Section 143(3) read with Section 144B of the Income Tax Act (hereinafter referred to as ‘the Act’ for short), pursuant to which, respondent No.2 issued the penalty order dated 05.09.2024 under Section 272A(1)(d) of the Act at Annexure-A1, penalty order dated 17.09.2024 under Section 270A at Annexure-A2, penalty order dated 19.09.2024 under Section 271AAC(1) of the Act at Annexure-A3 and respondent No.1 issued rectification order dated 22.01.2025 under Section 154 read with Section 143(3) of the Act at Annexure-A4 and demand notice dated 11.02.2025 at Annexure-

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NC: 2025:KHC:13793 WP No. 9644 of 2025

A5 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 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 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 order at Annexure –A 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

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NC: 2025:KHC:13793 WP No. 9644 of 2025

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 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:

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NC: 2025:KHC:13793 WP No. 9644 of 2025

ORDER (i) The impugned assessment order at Annexure-A dated 28.03.2024, penalty order dated 05.09.2024 at Annexure-A1, penalty order dated 17.09.2024 at Annexure-A2, penalty order dated 19.09.2024 at Annexure-A3, rectification order dated 22.01.2025 at Annexure-A4 and demand notice dated 11.02.2025 at Annexure-A5, are hereby set aside. (ii) Matter is remitted back for reconsideration afresh to the stage of petitioner submitting reply to Show Cause Notice dated 17.03.2024 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 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.: 29

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