STERLING URBAN VENTURES PRIVATE LIMITED, vs. ASSESSMENT UNIT,

PDF · subscribers
WP/7336/2023HC KarnatakaKAHC01017298202325 May 2023Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the petitioner's contention that notices under Section 142(1) ought to have been issued to the declared email IDs and not to an un-declared one deserves acceptance. The court found that notices sent to an email ID not furnished by the assessee justifiably resulted in the assessee not having had an opportunity to respond. Consequently, in light of the admitted facts and the lack of opportunity for the assessee to reply to the Section 142(1) notices, the assessment order, computation sheet, demand notice, and penalty notices were set aside. The matter was remitted back to the respondent no.1 (Assessment Unit) to be resumed from the stage of the reply to the Section 142(1) notice. The court did not expressly leave any issue undecided.

What were the facts?

The petitioner, Sterling Urban Ventures Private Limited, filed a writ petition challenging an assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2021-22. The petitioner also challenged the computation sheet, demand notice, and penalty notices. The primary contention was that notices under Section 142(1) were sent to an incorrect email ID (sudhakar@sterlingdevelopers.com) instead of the registered email IDs (accounts@sterlingdevelopers.com and bsvc99@gmail.com). The assessment order noted no response from the assessee to the Section 142(1) notices, leading to the ex-parte assessment.

What were the issues?

1. Whether the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for AY 2021-22 is valid, given that notices under Section 142(1) were allegedly sent to an incorrect email address? Assessee's Contention: The petitioner argued that notices under Section 142(1) were sent to an email ID not registered with the Income Tax Department. The registered email IDs were accounts@sterlingdevelopers.com and bsvc99@gmail.com, but notices were sent to sudhakar@sterlingdevelopers.com. Consequently, the assessee did not have an opportunity to respond, rendering the subsequent assessment order invalid. Revenue's Contention: The judgment records that the learned counsel for the Revenue submitted that a reply may be submitted to the Section 142(1) notices dated 01.11.2022, 11.11.2022, and 23.11.2022.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Before: SMT. SHWETA RAMANI SASTRI,

- 1 -

WP No. 7336 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF MAY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 7336 OF 2023 (T-IT) BETWEEN: 1. STERLING URBAN VENTURES PRIVATE LIMITED, COMPANY INCORPORATED UNDER THE COMPANIES ACT, 2013 REPRESENTED BY ITS MANAGING DIRECTOR, SMT. SHWETA RAMANI SASTRI, W/O KIRAN JOHN, AGED ABOUT 39 YEARS, NO.8, PRESTIGE NEBULA, LEVEL-5, CUBBON ROAD, OPP TO IT OFFICE BUILDING, BENGALURU-560 001. … PETITIONER (BY SRI. UDAY HOLLA, SENIOR ADVOCATE FOR SRI ANNAMALAI S., ADVOCATE) AND: 1. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, REP. BY ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME-TAX/ INCOME-TAX OFFICER, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. Digitally signed by VIDYA G R Location: High Court of Karnataka

- 2 -

WP No. 7336 of 2023 2. THE DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(1)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095. … RESPONDENTS (BY SRI. M. DILIP., ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 144B OF THE ACT DTD 19.12.2022 BEARING DIN NO. ITBA/AST/S/143(3)/2022- 23/1048089133(1) FOR THE ASSESSMENT YEAR 2021-22 BY THE R-1 HEREIN MARKED AS ANNX-A1 AND ETC.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

The petitioner has challenged the validity of the assessment order under Section 143 (3) r/w 144B of the Income Tax Act, 1961 dated 19.12.2022 relating to assessment year 2021 at Annexure-A1 as also the computation sheet at Annexure-A2, Notice of Demand at Annexure-A3 and has also assailed the penalty notice at Annexure-A4 as well as Annexure-A5 and A6.

- 3 -

WP No. 7336 of 2023

2.

The principle contention raised by the petitioner is that the notices under Section 142 (1) by the Income Tax Department have been addressed not to the Email ID which is registered with the Income Tax Department by the assessee. Attention is drawn to the personal details uploaded with the portal of Income Tax Department by the petitioner-assessee wherein the Email ID furnished are as follows: Primary : accounts@sterlingdevelopers.com Secondary : bsvc99@gmail.com

3.

It is submitted that all notices were sent to the Email ID of one Sudhakar (sudhakar@sterlingdevelopers.com). Attention is drawn to the notices at Annexure-J1 to J3. Accordingly, it is submitted that the eventual order passed under Section 142 (1) has been passed without reference to any stand of the petitioner.

4.

Perused the assessment order. It contains details of several notices under Section 142 (1) which had been

- 4 -

WP No. 7336 of 2023 issued. However, it is stated that there was no response by the assessee. The said details are detailed at Para 2 of the impugned order. As show-cause notice having been issued and in light of no response, assessment order has been passed. The details furnished at Annexure-'D' are not in dispute. The contention raised on behalf of the petitioner deserves acceptance to the extent that notice ought to have been issued to the Email ID furnished at Annexure-'D' and not otherwise. The notices sent to the Email ID which is not that declared by the assessee has justifiably resulted in the assessee not having had an opportunity to respond to the notices.

5.

Accordingly, in light of the admitted facts and in light of lack of opportunity to the assessee to submit its reply to the notice issued under Section 142 (1), Assessment Order at Annexure-A1 as well as notice of computation sheet at Annexure-A2, Consequential Demand Notice at Annexure-A3 and Penalty Notices at Annexure-A4, A5 and A6 are set aside. The matter is

- 5 -

WP No. 7336 of 2023 remitted back to the respondent no.1 and the same shall be resumed from the stage of reply to 142 (1) notice.

6.

The learned counsel for Revenue submits that reply may be submitted to 142 (1) notice dated 01.11.2022, 11.11.2022 and 23.11.2022 at Annexure-J1, J2 and J3 respectively.

7.

Accordingly, the petition is disposed off. Sd/- JUDGE NP

More judgments on Section 144B

All 10,521 judgments and leading authorities on Section 144B →

Recent GST High Court judgments

Search GST case law →