SUHEL KHAN vs. ASSESSMENT UNIT

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WP/653/2023HC KarnatakaKAHC01001706202310 February 2023Bench: B M SHYAM PRASAD4 pages
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What did the High Court hold?

The High Court allowed the writ petition and quashed the assessment order dated December 22, 2022. The Court found that while the respondent argued the petitioner had not responded to earlier notices, it was undisputed that the petitioner had made a timely request for adjournment after receiving the Show Cause Notice dated December 10, 2022. The Court observed that this request for adjournment had not been considered before the assessment order was passed. This demonstrated that the petitioner's request was not addressed, and it was not a case where the petitioner failed to avail an opportunity. Consequently, the Court held that the petitioner must be given an opportunity to be heard. The proceedings were restored for reassessment, subject to all just exceptions in law.

What were the facts?

The petitioner, Suhel Khan, filed a writ petition before the High Court of Karnataka challenging an assessment order dated December 22, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The petitioner contended that he was not given a due opportunity to be heard. Specifically, a Show Cause Notice was issued on December 15, 2022, and the petitioner immediately requested an adjournment, which was allegedly not considered before the assessment order was passed on December 22, 2022. The respondent, the Assessment Unit of the National Faceless Assessment Center, argued that the petitioner had not responded to previous notices issued under Section 143(2) and Section 142(1) of the Act.

What were the issues?

1. Whether the assessment order dated 22.12.2022, passed under Section 143(3) read with Section 144B of the IT Act, is liable to be quashed on the ground of denial of due opportunity to the petitioner? Assessee's Contention: The petitioner argued that he was not afforded a proper opportunity to present his case. A Show Cause Notice was issued on December 15, 2022, and the petitioner promptly requested an adjournment. However, the assessment order was passed on December 22, 2022, without considering this request, thereby denying him a due opportunity. Revenue's Contention: The respondent contended that prior to the Show Cause Notice dated December 10, 2022, the petitioner had been issued multiple notices under Section 143(2) and Section 142(1) of the IT Act in June 2022 and between August and November 2022, to which the petitioner had not responded. Therefore, the petitioner could not claim a denial of opportunity.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

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WP No. 653 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF FEBRUARY, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 653 OF 2023 (T-IT) BETWEEN:

SUHEL KHAN S/O SARDAR KHAN AGED ABOUT 31 YEARS SEETHANAYAKANAHALLI VILLAGE HOSAKOTE POST, LAKKUR HOBALI MALUR TALUK, KOLAR DISTRICT- 563 130 FACTORY AT PLOT NO.31, PART-4, 4TH PHASE INDUSTRIAL AREA SY.NOS. 113 AND 114, H- HOSKOTE VILLAGE, KASABA HOBLI, MALUR TQ KOLAR DISTRICT- 563 130. …PETITIONER (BY SRI. RAMA MURTHY. R.,ADVOCATE) AND:

ASSESSMENT UNIT NATIONAL FACELESS ASSESSMENT CENTER, DELHI- 110 001. …RESPONDENT (BY SRI.M. DILIP, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF ASSESSMENT DATED 22.12.2022 MADE U/S 143(3) R.W.S 144B OF THE ACT

Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

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WP No. 653 of 2023

DIN NO.ITBA/AST/S/143(3)/2022-23/1048181528(1) ANNEXURE-E TO THIS WRIT PETITION.

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

ORDER

The petitioner has called in question the assessment order dated 22.12.2022 under Section 143[3] read with Section 144B of the Income Tax Act, 1961 [for short, ‘IT Act’]. Sri. R Ramamurthy, the learned counsel for the petitioner, submits that this Court must intervene with the impugned order and restore the reassessment because the petitioner has not been given due opportunity. In this regard, he submits that the petitioner was issued with Show Cause Notice on 15.12.2022 and immediately thereafter, the petitioner has raised a request for adjournment but without considering the request for adjournment, the impugned assessment order is made on 22.12.2022.

Sri. M Dilip, the learned counsel for the respondent, submits that prior to the Notice dated 10.12.2022, the petitioner has been issued with Notices under the provisions of Section 143[2] and repeated Notices under

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WP No. 653 of 2023

Section 142[1] of the IT Act in the month of June 2022 and between the months of August and November 2022, but the petitioner has not responded to any of these Notices. As such, the petitioner cannot contend that there is denial of opportunity. In fact, Sri. Dilip draws the attention of this Court to the tabular column to the Assessment Order dated 22.12.2022.

The petitioner’s grievance is considered in the light of the grounds canvassed on behalf of the respondents. It is seen from the impugned order that it is recorded that the Show Cause Notice dated 10.12.2022 is caused for compliance by 15.12.2022 and insofar as the response from the petitioner, it is observed in the subject tabular column that there is no response. However, it is not disputed that the petitioner had made a request for adjournment in time. This demonstrates that the petitioner’s request for adjournment has not been considered, and this Court must therefore opine that this is not the case of the petitioner has failed to avail the opportunity. In that event, the petitioner must have the opportunity, and hence, the following:

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WP No. 653 of 2023

ORDER

The petition is allowed quashing the assessment order dated 22.12.2022 [Annexure-E] restoring the proceedings for reassessment subject to all just exceptions in law.

SD/- JUDGE

AN/-

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