THEOS METALS TRADA PRIVATE LIMITED vs. ASSESSMENT UNIT

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WP/19635/2024HC KarnatakaKAHC01041771202417 September 2024Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition. It noted that it was an undisputed fact that the petitioner did not reply to the show-cause notice. However, considering the medical records (Annexures-J1 and J2) indicating the petitioner's inability to respond due to the Director's ill health, the Court deemed it just and appropriate to provide the petitioner with another opportunity. Consequently, the impugned assessment order, computation sheet, demand notice, and penalty notices (Annexures-A1 to A5) dated 22.03.2024 were set aside. The matter was remitted back to Respondent No. 1 to the stage of the petitioner submitting its reply to the show-cause notice. The petitioner was granted liberty to submit its pleadings and documents, which the respondent was directed to consider before passing an appropriate order in accordance with law. The Court did not leave any issue undecided.

What were the facts?

The petitioner, Theos Metals Trada Private Limited, filed a writ petition before the High Court of Karnataka challenging an assessment order 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, demand notice, and penalty notices issued by Respondent No. 1. The petitioner contended that due to the ill health of its Director, it could not respond to the show-cause notices issued by the Revenue. The Revenue argued that the writ petition lacked merit. The High Court noted that the petitioner did not respond to the show-cause notices, citing medical records as evidence of the Director's inability to do so.

What were the issues?

1. Whether the assessment order passed by Respondent No. 1 under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23 is liable to be quashed on the grounds of violation of principles of natural justice? Assessee's Contentions: The petitioner argued that the assessment order and subsequent notices were passed in violation of the principles of natural justice because the Director of the petitioner-company was unwell, as evidenced by medical records (Annexures-J1 and J2). This prevented the petitioner from submitting a timely reply to the show-cause notices. The petitioner sought to set aside the impugned order and remit the matter back for reconsideration. Revenue's Contentions: The respondent submitted that there was no merit in the writ petition and that it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 156,Section 270A,Section 272A(1)(d),Section 274

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:37854 WP No. 19635 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 19635 OF 2024 (T-IT) BETWEEN:

THEOS METALS TRADA PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 2013 REPRESENTED BY DIRECTOR SRI VIJAY LOKESH MALUR SON OF SRI SRI MALUR VENKATARAMANAPPA HANUMANTHAIAH AGED ABOUT 47 YEARS, NO. 318A AND 318B, MALUR III PHASE INDUSTRIAL AREA, MALUR - 563160 KOLAR DISTRICT. …PETITIONER (BY SRI. VENKATESH. G.,ADVOCATE) AND:

1.

ASSESSMENT UNIT REP BY 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, E-RAMP JAWAHARLAL NEHRU STADIUM, DELHI - 110 003.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 7(1)(1), BMTC BUILDING NEAR NATIONAL GAMES VILLAGE, KORAMANGALA, BANGALORE – 560 095. …RESPONDENTS (BY SRI.E.I. SANMATHI.,ADVOCATE)

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

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NC: 2024:KHC:37854 WP No. 19635 of 2024

THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ASSESSMENT ORDER PASSED BY THE RESPONDENT NO. 1 UNDER SECTION 143(3) R.W.S. 144B OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) BEARING DIN NO. ITBA/AST/S/143(3)/2023-24/1063211656(1) FOR THE ASSESSMENT YEAR 2022-23, HEREIN MARKED AS ANNEXURE- A1. AND ETC.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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

ORAL ORDER In this petition, the petitioner seeks the following reliefs: “i) Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the assessment order passed by the Respondent No. 1 under section 143(3) r.w.s. 144B of the Income Tax Act, 1961 (for short 'the Act') bearing DIN No. ITBA/AST/S/143(3)/2023-24/1063211656(1) for the Assessment Year 2022-23, herein marked as Annexure- A1. ii) Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the computation sheet dated 22.03.2024 bearing DIN and Document ITBA/AST/S/622/2023-24/1063211766(1) for the Assessment Year 2022-23 issued by the Respondent No.1, herein marked as Annexure-A2. iii) Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the demand notice dated 22.03.2024 issued u/s 156 bearing DIN & Notice No.

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NC: 2024:KHC:37854 WP No. 19635 of 2024

ITBA/AST/S/156/2023-24/1063211820(1), for the assessment year AY 2022-23 issued by the Respondent No. 1, herein marked as Annexure-A3. iv) Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the notice for penalty u/s 274 r.w.s 270A of the Act dated 22.03.2024 bearing DIN & Notice No. ITBA/PNL/S/270A/2023-24/1063211884(1) issued by the Respondent No. 1 for the Assessment Year 2022-23, herein marked as Annexure-A4. v) Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the notice for penalty u/s 274 r.w.s 272A(1)(d) of the Act dated 22.03.2024 bearing DIN & Notice No. ITBA/PNL/S/272A(1)(d)_FL/2023- 24/10632 09724(1) issued by the Respondent No. 1 for the Assessment Year 2022-23 herein marked as Annexure-A5. vi) 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. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that pursuant to the show-cause notice dated 04.03.2024, issued by respondent No.1, the petitioner sought for an adjournment on the ground of Director of the

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NC: 2024:KHC:37854 WP No. 19635 of 2024

petitioner-Company was unwell. Subsequently, respondent issued one more show-cause notice dated 16.03.2024, which was not responded to by the petitioner and as such, respondent No.1 proceeded to issue the impugned order at Annexure-A, which is challenged in the present petition along with subsequent notices, computation sheets etc., 4. Learned counsel for the petitioner further submits that due to ill health of the Director of the petitioner-Company as can be seen from the medical records at Annexures-J1 and J2, which indicates that the petitioner was not in a position to submit his reply to the show-cause notice along with all relevant documents and consequently, the impugned order dated 22.03.2024 at annexure- A1 passed by respondent No.1 is violative of principles of natural justice and the same may be set aside and the matter be remitted back to respondent No.1 for reconsideration afresh in accordance with law. 5. Per contra, learned counsel for the respondents submits that there is no merit in the writ petition and that the same is liable to be dismissed.

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NC: 2024:KHC:37854 WP No. 19635 of 2024

6.

A perusal of the material on record will indicate that it is an undisputed fact that the petitioner did not send his reply/response to the show-cause notice and in the light of the medical records at Annexures-J1 and J2, which indicate that the petitioner was not in a position to do so, in order to provide one more opportunity to the petitioner, I deem it just and appropriate to set aside the impugned order, demand notice, computation sheet and penalty notice at Annexures-A1 to A5 and remit the matter back to the concerned respondent for reconsideration afresh in accordance with law to the stage of petitioner submitting his reply to the show-cause notice and to proceed further in accordance with law.

7.

In the result, I pass the following: ORDER i. The Writ Petition is allowed. ii. The impugned order, computation sheet, demand notice and two penalty notices, all dated 22.03.2024 (Annexures-A1 to A5 respectively) are hereby set aside.

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NC: 2024:KHC:37854 WP No. 19635 of 2024

iii. The matter is remitted back to respondent No.1 to the stage of petitioner submitting his reply to the show-cause notice and proceed further in accordance with law. iv. Liberty is reserved in favour of the petitioner to submits his pleadings, documents, etc., before respondent No.1 who shall consider the same and pass appropriate order in accordance with law.

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

BMC List No.: 1 Sl No.: 9

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