SRI ASHOK SRINIVAS THAMBI vs. THE ADDITIONAL/JOINT/DEPUTY/

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WP/10775/2024HC KarnatakaKAHC01021290202413 August 2024Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition. The Court found merit in the petitioner's contention that the respondents appear to have proceeded on the ground that no reply was submitted or that the submitted reply was not considered, despite the petitioner having filed a reply on March 6, 2024, to the show-cause notice dated March 1, 2024. This failure to consider the petitioner's response violated the principles of natural justice, warranting interference by the Court. Consequently, the impugned assessment order, demand notice, and penalty notice dated March 12, 2024, were set aside. The matter was remitted back to the first respondent for reconsideration afresh from the stage of submitting the additional reply to the show-cause notice. Liberty was granted to the petitioner to produce additional documents and pleadings, which the first respondent was directed to consider before proceeding in accordance with law.

What were the facts?

The petitioner, Sri. Ashok Srinivas Thambi, filed a writ petition challenging an assessment order, a demand notice, and a penalty notice, all dated March 12, 2024, issued by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless-Assessment Centre, for Assessment Year 2022-23. The petitioner's grievance was that the respondents initiated proceedings under Section 143(3) read with Section 144B of the Income Tax Act, 1961, issued a show-cause notice on March 1, 2024, to which the petitioner submitted a reply with documents on March 6, 2024. However, the petitioner contended that the respondents passed the impugned assessment order without considering this reply and the submitted documents, thus violating principles of natural justice.

What were the issues?

1. Whether the impugned assessment order, demand notice, and penalty notice issued under Section 143(3) read with Section 144B and Section 270A of the Income Tax Act, 1961, for AY 2022-23 are liable to be quashed on the grounds of violation of principles of natural justice? Assessee's Contention: The petitioner argued that the assessment order was passed without considering the detailed reply and documents submitted in response to the show-cause notice, thereby violating the principles of natural justice. The petitioner sought to quash the assessment order, demand notice, and penalty notice. Revenue's Contention: The learned counsel for the respondents submitted that there is no merit in the petition and that the same is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 143,Section 144B,Section 274,Section 270A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:32502 WP No. 10775 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 10775 OF 2024 (T-IT) BETWEEN:

SRI. ASHOK SRINIVAS THAMBI, S/O. SRINIVASA THAMBI, AGED ABOUT 53 YEARS, NO. 20, 29TH CROSS, JAYANAGAR, 7TH BLOCK, BENGALURU-560 070. …PETITIONER (BY SMT. GEETHA RANI K.,ADVOCATE)

AND:

1.

THE ADDITIONAL / JOINT / DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX INCOME-TAX OFFICER, NATIONAL FACELESS-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, RAMP, JAWARHARLAL NEHRU STADIUM, DELHI-110 003.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANAGALA, BENGALURU-560 095. …RESPONDENTS

(BY SRI.M. THIRUMALESH.,ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO A) QUASH AS FAR AS THE PETITIONER IS CONCERNED BY AN APPROPRIATE WRIT OR ORDER IN THE NATURE OF CERTIORARI OR OTHERWISE THE IMPUGNED ASSESSMENT ORDER VIDE ITBA/AST/S/143(3)/2023-24/1062451452(1) DATED 12/03/2024 ISSUED BY THE LEARNED FIRST RESPONDENT UNDER SECTION 143 R.W.S. 144B FOR AY 2022-23, ENCLOSED IN ANNEXURE-A AND ETC.,

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

Digitally signed by Vandana S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:32502 WP No. 10775 of 2024

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

ORAL ORDER

In this petition, petitioner seeks for the following reliefs:-

“A. Quash as far as the Petitioner is concerned by an appropriate writ or order in the nature of certiorari or otherwise the impugned assessment order vide ITBA/AST/S/143(30/2023-24/1062451452(1), dated: 12.03.224 issued by the Learned First Respondent under Section 143 r.w.s. 144B for AY 2022-23, enclosed in Annexure-A.

B. Quash as far the Petitioner is concerned by an appropriate writ or order in the nature of Certiorari or otherwise the impugned Demand Notice vide ITBA/AST/S/156/2023-24/1062451526(1) dated: 12.03.2024 for the payment of tax so assessed by the Learned First Respondent for the AY 2022-23 enclosed in Annexure-B.

C. Quash as far as the Petitioner is concerned by an appropriate writ or order in the nature of Certiorari or otherwise the impugned Penalty Notice under Section 274 r.w.s. 270A of the Act vide ITBA/PNL/S/270A/2023- 24/1062451631(1) dated: 12.03.2024 by the Learned First Respondent for the AY 2022-23, enclosed in Annexure-C.

D. Direct the Learned First and Second respondent by an appropriate writ or order in the nature of Mandamus or otherwise, not to take any coercive step towards recovery of the disputed tax as sated in demand

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NC: 2024:KHC:32502 WP No. 10775 of 2024

Notice dated: 12.03.2024 issued by First Respondent enclosed as Annexure-B.”

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 respondents initiated proceedings under Section 143(3) r/w Section 144(b) of the Income Tax Act, 1961 (for short ‘the I.T.Act’) against the petitioner, pursuant to which, the respondents issued a show- cause notice dated 01.03.2024, to which the petitioner submitted a reply on 06.03.2024. It is the grievance of the petitioner that despite submitting a detailed reply along with documents to the aforesaid show cause notice, the respondents did not consider the same and has proceeded to pass the impugned assessment order without considering the reply and the documents filed by the petitioner, thereby violating the principles of natural justice and consequently, the impugned order deserves to be quashed.

4.

Per contra, learned counsel for the respondents – revenue submits that there is no merit in the petition and that the same is liable to be dismissed.

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NC: 2024:KHC:32502 WP No. 10775 of 2024

5.

As rightly contended by the learned counsel for petitioner, the material on record discloses that the petitioner had submitted his reply on 06.03.2024 to the show-cause notice dated 01.03.2024, despite which, the respondents appears to have proceeded on the ground that the petitioner has not submitted his reply and has not considered the same, thereby violating the principles of natural justice warranting interference by this Court.

6.

In the result, I pass the following:- ORDER

(i) Petition is hereby allowed.

(ii) The impugned assessment order at Annexure-A dated 12.03.2024; Demand notice at Annexure-B dated 12.03.2024 and penalty notice at Annexure-C dated 12.03.2024 are hereby set aside.

(iii) The matter is remitted back to the 1st respondent for reconsideration afresh in accordance with law from the stage of submitting additional reply to the Show Cause Notice at Annexure- E dated 01.03.2023 issued under Section 143(3) of the I.T.Act.

(iii) Liberty is reserved in favour of the petitioner to produce additional documents, pleadings etc., to the 1st respondent, who

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NC: 2024:KHC:32502 WP No. 10775 of 2024

shall consider the same and proceed further in accordance with law.

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

Srl.

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