HANUMAIAH NAGARAJU vs. ASSESSMENT UNIT

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WP/18479/2024HC KarnatakaKAHC01038340202407 August 2024Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the assessment order was non-speaking, cryptic, laconic, and passed without application of mind, which is a clear violation of the principles of natural justice, warranting interference. The Court noted that the petitioner's request for additional documents was not considered, and the documents referred to regarding expenses for improvement of immovable property were not appreciated. Consequently, the Court quashed the impugned assessment order, computation sheet, and demand notice. The matter was remitted back to the first respondent for reconsideration afresh, with liberty reserved for the petitioner to produce additional pleadings and documents, which the respondent was directed to consider before passing appropriate orders.

What were the facts?

The petitioner, Hanumaiah Nagaraju, an agriculturist, filed a writ petition before the High Court of Karnataka challenging an assessment order dated March 22, 2024, passed by the Assessment Unit (Respondent No. 1) under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23. The petitioner also challenged the computation sheet and demand notice issued on the same date. The petitioner's grievance was that despite requesting additional time to furnish documents, the respondent granted only four days and passed a non-speaking order without considering the petitioner's contentions and without providing sufficient time. The revenue contended that the petition lacked merit and should be dismissed.

What were the issues?

1. Whether the assessment order dated March 22, 2024, passed by the Assessment Unit under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for AY 2022-23 is a non-speaking order, cryptic, laconic, and passed without application of mind, thereby violating the principles of natural justice? Assessee's Contention: The petitioner argued that the assessment order was non-speaking, passed summarily without considering his contentions and without granting sufficient time to produce additional documents, thus violating principles of natural justice. Revenue's Contention: The revenue argued 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 143(3),Section 144B,Section 147,Section 144,Section 156

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:31477 WP No. 18479 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 18479 OF 2024 (T-IT) BETWEEN:

HANUMAIAH NAGARAJU S/O HANUMAIAH, AGED ABOUT 49 YEARS OCC: AGRICULTURE, RESIDING AT NO. 91 (NEW 199), KADABAGERE, DASANAPURA HOBLI, BENGALURU-562 130. PAN. AJNPN8927H …PETITIONER

(BY SRI. BALACHANDRAN B S.,AND SRI. AJITH V., ADVOCATES)

AND:

1.

ASSESSMENT UNIT, INCOME TAX DEPARTMENT MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001.

2.

INOCME TAX OFFICER, WARD 6(3)(1), BENGALURU, BMTC BUILDING, 80 FT ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGLAURU-560 095.

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX BENGALURU-1 BMTC BUILDING, 80 FT ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGLAURU-560 095. …RESPONDENTS (BY SRI.Y V RAVIRAJ.,ADVOCATE)

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

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NC: 2024:KHC:31477 WP No. 18479 of 2024

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE FOLLOWING ANNX-F IMPUNGED ASSESSMENT ORDER DTD. 22.03.2024 PASSED BY THE R-1 UNDER SECTION 143(3) READ WITH SECTION 144B OF THE IT ACT FOR THE AY 2022-23 IN DIN AND ORDER NO. ITBA/AST/S/143(3)/2023-24/1063147872(1) AND ANNX-F1 IMPUGNED COMPUTATION SHEET DTD. 22.03.2024 PASSED BY THE R-1 UNDER SECTION 143(3) OF THE IT ACT FOR THE AY 2022-23 IN DIN AND DOCUMENT NO. ITBA/AST/S/322/2023- 24/1063148396(1) AND ETC.,

THIS WRIT 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 has sought for the following reliefs:-

1.

Grant an interim order and injunction restrain the Respondents from acting upon or taking any further steps or proceedings including the enforcement of demand raised therein and the penalty proceedings initiated, in pursuance of or in furtherance of: i. Impugned assessment order at Annexure-F dated 22.03.2024 passed by the Respondent No.1 under section 143(3) read with section 144B of the IT Act for the AY 2022-23 in DIN & Order No.ITBA/AST/S/143(3)/2023-24/1063147872(1); ii. Impugned computation sheet at Annexure-F1 dated 22.03.2024 passed by the Respondent No.1

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NC: 2024:KHC:31477 WP No. 18479 of 2024

under section 147 read with section 144 of the IT Act for the AY 2022-23 in DIN & Document No.ITBA/AST/S/322/2023-24/1063148396(1); iii. Impugned demand notice dated 22.03.2024 issued by the Respondent No.1 under section 156 of the IT Act for the AY 2022-23 in DIN & Notice No. No.ITBA/AST/S/156/2023-24/1063148417(1); 2. Issue any other order or direction to which the Petitioner is found entitled to in the present facts and circumstances.

2.

Heard learned counsel for the petitioner and learned counsel for the respondents – revenue and perused the material on record.

3.

A perusal of the material on record will indicate that pursuant to the show cause notice dated 01.03.2024 issued by the 1st respondent under Section 143(3) of the Income Tax Act, 1961, the petitioner submitted a reply along with relevant documents and petitioner also made a request for adjournment to enable him to furnish additional documents. It is the grievance of the petitioner that despite requesting additional time to produce necessary documents, the 1st respondent has granted only a period of four days to furnish documents and has proceeded to summarily passed the impugned non-speaking order without considering the

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NC: 2024:KHC:31477 WP No. 18479 of 2024

various contentions urged by the petitioner and not providing him sufficient time to produce additional documents and as such, he is before this Court way of the present petition.

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.

5.

A perusal of the material on record will indicate that apart from the fact that the request of the petitioner to produce additional documents has not been considered by the 1st respondent, the various documents referred to and extracted in the impugned order as regards expenses claim towards cost of improvement of the immovable property has not been considered or appreciated by the 1st respondent in the impugned order which is clearly non- speaking, cryptic, laconic and passed without application of mind in violation of principles of natural justice warranting interference by this Court in the present petition.

6.

In the result, I pass the following:- ORDER

(i) Petition is hereby allowed.

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NC: 2024:KHC:31477 WP No. 18479 of 2024

(ii) The impugned assessment order at Annexure-F dated 22.03.2024, impugned computation sheet at Annexure-F1 dated 22.03.2024 and impugned demand notice at Annexure-F2 dated 22.03.2024 passed / issued by the 1st respondent are hereby quashed. (iii) The matter is remitted back to the 1st respondent for reconsideration afresh in accordance with law. (iv) Liberty is reserved in favour of the petitioner to produce additional pleadings, documents etc., before the 1st respondent, who shall consider the same and pass appropriate orders in accordance with law.

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

Srl.

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