M/S COGOS TECHNOLOGIES PRIVATE LIMITED vs. UNION OF INDIA

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WP/32447/2024HC KarnatakaKAHC01065287202413 December 2024Bench: M.I.ARUN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka held that the interest of justice would be met by setting aside the impugned assessment order, computation sheet, and demand notice. The Court reasoned that since the order was passed ex parte without hearing the petitioner, despite their request, it was appropriate to remand the matter. The petitioner is to be relegated to the stage of the show cause notice dated March 19, 2024. They are granted liberty to file a suitable reply within three weeks and, if a personal hearing is requested, the same shall be granted by the respondent No. 2. Appropriate orders are to be passed thereafter. The writ petition is disposed of accordingly. No specific amount in dispute was recorded.

What were the facts?

The petitioner, M/s Cogos Technologies Private Limited, filed a writ petition before the High Court of Karnataka challenging an assessment order dated March 31, 2024, passed by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National e-Assessment Centre, Delhi. The petitioner contended that a personal hearing was not granted despite a request, leading to an ex parte assessment order and a consequent demand notice under Section 156 of the Income Tax Act, 1961. The petitioner asserted that the demand was incorrect and that they had paid all taxes due. The respondents disputed whether a hearing was offered but admitted the order was passed ex parte.

What were the issues?

1. Whether the assessment order passed under Section 143(3) of the Income Tax Act, 1961, is liable to be quashed on the ground that a personal hearing was not granted to the petitioner, despite a request, thereby violating principles of natural justice? The petitioner argued that the assessment order, computation sheet, and demand notice were invalid because they were passed without affording a personal hearing, which they had requested. They claimed that if given an opportunity, they could demonstrate that all taxes were paid correctly. The revenue disputed the petitioner's claim regarding the opportunity for a hearing but conceded that the impugned order was passed ex parte without hearing the petitioner.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 156

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:52062 WP No. 32447 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF DECEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE M.I.ARUN WRIT PETITION NO.32447 OF 2024 (T-RES)

BETWEEN:

1.

M/S COGOS TECHNOLOGIES PRIVATE LIMITED 750, (NEW NO.38) 9TH MAIN, JAYANAGAR 4TH BLOCK, BENGALURU-560 011 (REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. SREERAM DURGA VENKATA PRASAD) A COMPANY REGISTERED UNDER, 1956.

…PETITIONER (BY SRI ANISH ACHARYA, ADVOCATE)

AND:

1.

UNION OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK, NEW DEHLI-110 001 REPRESENTED BY ITS SECRETARY.

2.

ADDITIONAL/JOINT/DEPUTY/ ASSISTANTCOMMISSIONER OF INCOME TAX INCOME-TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, DELHI-110 001.

…RESPONDENTS (BY SRI M. DILIP, ADVOCATE)

Digitally signed by H K HEMA Location: High Court of Karnataka

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NC: 2024:KHC:52062 WP No. 32447 of 2024

THIS PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH ASSESSMENT ORDER PASSED BY THE RESPONDENT NO.2 DATED 31ST MARCH 2024 BEARING DIN NO.ITBA/AST/S/143(3)/2023- 24/1063751043(1) UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, VIDE ANNEXURE-A, ETC.

THIS PETITION COMING ON FOR ORDERS, THROUGH PHYSICAL HEARING/VIDEO CONFERENCING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE M.I.ARUN

ORAL ORDER

1.

The petitioner has challenged the assessment order dated 31.03.2024 passed by second respondent (vide Annexure-'A' to the writ petition) on the ground that in spite of its request, a personal hearing was not granted. Consequently, the computation sheet and also notice of demand under Section 156 of the Income Tax Act, 1961 also has been challenged by the petitioner. The contention of the petitioner is that it is not due for the amount as demanded by the respondents and if an opportunity is given, it would convince the Authorities

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NC: 2024:KHC:52062 WP No. 32447 of 2024

concerned that all the up-to-date taxes have been paid in accordance with law. 2. Though the respondents dispute the fact that whether the petitioner was given an opportunity of hearing or not, it is admitted that the impugned order is passed ex parte without hearing the petitioner. 3. Under the circumstances, I am of the opinion that interest of justice would be met, if the impugned order is set aside and the matter is relegated to the stage of show cause notice dated 19.03.2024 by giving an opportunity to the petitioner to file a reply and request for a personal hearing from the respondents. Hence, the following: ORDER i. The impugned assessment order dated 31.03.2024 bearing DIN No.ITBA/AST/S/143(3)/2023-24/1063751043(1) passed by second respondent for the assessment year 2022-23 (vide Annexure-'A' to the writ petition) is hereby set aside.

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NC: 2024:KHC:52062 WP No. 32447 of 2024

ii. Consequently, the computation sheet dated 31.03.2024 bearing No.ITBA/AST/S/622/2023- 24/1063751126(1) issued by second respondent (vide Annexure-'B' to the writ petition) and demand notice dated 31.03.2024 under Section 156 of the Income Tax Act, 1961 bearing No.ITBA/AST/S/156/2023-24/1063751185(1) issued by second respondent (vide Annexure-'C' to the writ petition) are hereby set aside; iii. Petitioner is relegated to the stage of show cause notice dated 19.03.2024 and liberty is given to it to file a suitable reply within a period of three weeks from today and if there is a request for personal hearing, the same shall be granted by respondent No.2 and appropriate orders shall be passed thereafter; iv. The writ petition stands disposed of accordingly.

Sd/- (M.I.ARUN) JUDGE

VMB List No.: 1 Sl No.: 32

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