M/S PARAAG CONSTRUCTIONS vs. THE INCOME TAX OFFICER

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WP/12065/2024HC KarnatakaKAHC01024147202425 April 2024Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court, without expressing any opinion on the merits or de-merits of the rival contentions, deemed it appropriate to dispose of the petition by issuing directions. The Court directed the Appellate Authority (respondent No.2) to dispose of the pending appeal within a period of three months from the date of receipt of a copy of the order. Furthermore, the Court directed that until the disposal of the appeal by the Appellate Authority, the respondents shall not take any precipitative or coercive steps against the petitioners, nor withdraw any amount from the petitioners' bank accounts pursuant to the attachment notice. Concurrently, the petitioners were also directed not to withdraw any money from their bank accounts until the appeal is decided. All rival contentions of the parties were kept open.

What were the facts?

The petitioners, M/s. Paraag Constructions and Developers and M/s. Century Joint Developments Pvt. Ltd., filed a writ petition before the High Court of Karnataka. They sought to quash an attachment notice dated March 27, 2024, issued by the Income Tax Officer (Assessing Officer) for Assessment Year 2020-21. The petitioners' grievance was that despite an appeal against the Assessment Order dated September 26, 2022, being pending before the Commissioner of Income Tax (Appeals) - National Faceless Appeal Center (NFAC), the Assessing Officer had not disposed of the appeal or passed any interim orders. Instead, the Assessing Officer proceeded to issue the impugned attachment notice.

What were the issues?

1. Whether the High Court should issue directions to the Appellate Authority to dispose of the pending appeal within a stipulated timeframe, and whether coercive steps should be restrained until the appeal is decided? (Question of procedure and interim relief) Assessee's Contentions: - The petitioners argued that their appeal against the Assessment Order is pending before the Appellate Authority. - They contended that the Assessing Officer issued an attachment notice despite the pendency of the appeal and a request for suspension of demand. - They sought directions for the Appellate Authority to dispose of the appeal within a specific period and for a stay on precipitative/coercive steps until then, undertaking not to withdraw funds from their bank accounts. Revenue's Contentions: - The revenue argued that there is no merit in the petition and it is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 226,Section 227

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:16847 WP No. 12065 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF APRIL, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.12065 OF 2024 (T-IT)

BETWEEN:

1.

M/S. PARAAG CONSTRUCTIONS AND DEVELOPERS, MUNICIPAL NO.5/1, RAJA RAM MOHAN ROY ROAD, EARLIER SAMPANGI TANK ROAD, WARD NO.77, SAMPAMGI RAMNA, BANGALORE – 560 027. (REPRESENTED BY ITS PARTNER MR.SANITH V JANNU)

2.

M/S. CENTURY JOINT DEVELOPMENTS PVT. LTD., NO.10/1, LAKSHMINARAYANA COMPLEX, PALACE ROAD, VASANTH NAGAR, BENGALURU – 560 052.

(PARTNER OF PETITIONER NO.1) REPRESENTED BY IT PARTNER MR. SANITH V JANNU (REGISTERED PARTNERSHIP FIRM) ACT 1932. …PETITIONERS

(BY SRI. M.V.SESHACHALA, SENIOR COUNSEL FOR SRI. NAGHARISH G S., ADVOCATE)

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:16847 WP No. 12065 of 2024

AND:

1.

THE INCOME TAX OFFICER, WARD 1(2)(1), BMTC BUILDING, 80 FT ROAD, 6TH BLOCK, NEAR KHB GAME VILLAGE, KORAMANGALA, BANGALORE – 560 095.

2.

COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTER (NFAC), NO.412-413, I FLOOR, OPP. METRO PILLAR NO.793, DWARKA MOR, NEW DELHI – 110 059. …RESPONDENTS (BY SRI. M.DILIP, ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ATTACHMENT NOTICE DATED 27.03.24 INDIAN OVERSEAS BANK BEARING NO. ITBA/RCV/S/226(3)-1/23-24/1063476008(1) ANNEXURE - D, PASSED BY THE ASSESSING OFFICER R1 FOR A.Y. 2020-21 AND ETC.,

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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NC: 2024:KHC:16847 WP No. 12065 of 2024

ORDER

In this petition, the petitioners seeks quashing of the attachment notice dated 27.03.2024 at Annexure-D passed by respondent No.1, Assessment Officer for the Assessment Year 2020-21 and other reliefs.

2.

Heard learned Senior Counsel for the petitioners and learned counsel for the respondents. Perused the petition papers.

3.

A perusal of the material on record would indicate that aggrieved by the Assessment Order dated 26.09.2022, the first petitioner have preferred an appeal, which is pending before the First Appellate Authority. It is the grievance of the petitioners that despite pendency of appeal and the request made by the petitioners to suspend the demand as per the Assessment Order, respondent No.1-Assessing Officer has not disposed of the appeal nor passed any interim orders and on the other hand he has issued the impugned attachment notice and as such, the petitioners are before this Court, by way of present petition.

4.

Learned Senior Counsel for the petitioners submits that necessary directions may be issued to respondent No.2-

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NC: 2024:KHC:16847 WP No. 12065 of 2024

Appellate Authority to dispose of the appeal within a stipulated time frame and till disposal of the appeal, the respondents may be directed not to take any precipitative/coercive steps against the petitioners who would undertake not to withdraw any amounts lying in the Bank Account of the petitioners.

5.

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

6.

A perusal of the material on record will indicate that it is an undisputed fact that the appeal filed by the first petitioner is pending adjudication before respondent No.2-Appellate Authority. Under these circumstances, without expressing any opinion on the merits/de-merits of the rival contentions, I deem it appropriate to dispose of this petition directing respondent No.2-Appellate Authority to dispose of the appeal within a period of three months from the date of receipt of a copy of this order. It is further directed that till disposal of the appeal by respondent No.2-Appellate Authority, the respondents shall not take any precipitative/coercive steps against the petitioners nor withdraw any amount from the Bank Account of the petitioners pursuant to Annexure-D till

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NC: 2024:KHC:16847 WP No. 12065 of 2024

disposal of the appeal. It is further directed that till disposal of the appeal by respondent No.2-Appellate Authority, the petitioners would also not withdraw any amount/money lying in their Bank Accounts.

All rival contentions of the parties are kept open and no opinion is expressed on the same.

Subject to aforesaid directions, petition stands disposed off.

Sd/- JUDGE

SMJ List No.: 1 Sl No.: 46

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