JAMAKHANDI MINORITY URBAN CO-OP CREDIT SOCIETY LTD vs. INCOME TAX OFFICER

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WP/105644/2022HC KarnatakaKAHC02018374202227 September 2024Author: JYOTI MULIMANI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the order dated 22.11.2022 passed by the first respondent (ITO) under Section 220(6) of the Income Tax Act, 1961, was liable to be set aside. The Court found merit in the petitioner's contention that they were deprived of a personal hearing, which is a fundamental principle of natural justice. The Court noted that the assessment order was under appeal before the NFAC and the petitioner had sought a stay of collection of tax. The order directing payment of 20% of the disputed amount was passed without granting the petitioner an opportunity for a personal hearing. Therefore, the Court quashed the impugned order and remanded the matter back to the first respondent. The first respondent was directed to provide an opportunity for a personal hearing to the petitioner and thereafter pass orders in accordance with the law. The petitioner was directed to appear before the first respondent on 21.10.2024.

What were the facts?

The petitioner, Jamakhandi Minority Urban Co-Op Credit Society Ltd., filed a Writ Petition before the High Court of Karnataka, Dharwad Bench. The petition sought to quash an order dated 22.11.2022 passed by the Income Tax Officer (ITO), Ward-1 and TPS, Bagalkot, under Section 220(6) of the Income Tax Act, 1961. This order directed the petitioner to pay 20% of the disputed amount. The petitioner had previously filed an appeal against an assessment order dated 22.09.2022 before the National Faceless Appeal Centre (NFAC), Delhi, which was pending adjudication. The petitioner's primary contention was that the order from the ITO was passed without affording them a personal hearing, thus violating principles of natural justice.

What were the issues?

1. Whether the order dated 22.11.2022 passed by the first respondent (ITO) under Section 220(6) of the Income Tax Act, 1961, is liable to be quashed on the ground of violation of principles of natural justice, specifically the denial of a personal hearing to the petitioner? Assessee's Contentions: The petitioner argued that the order passed by the first respondent was opposed to the principles of natural justice because they were deprived of a personal hearing. They sought an opportunity for a personal hearing and requested the Writ Petition be allowed. Revenue's Contentions: The respondents contended that sufficient opportunity was provided to the petitioner before the order was passed, justifying the department's action. They strongly objected to a remand and argued that the Writ Petition was devoid of merits and should be dismissed.

Which sections of the Income-tax Act were involved?

Section 220(6)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 27TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 105644 OF 2022 (T-IT) BETWEEN:

JAMAKHANDI MINORITY URBAN CO-OP CREDIT SOCIETY LTD., NEAR DESAI CIRCLE, TQ: JAMKHANDI, DIST: BAGALKOT, JAMKHANDI-587 301, KARNATAKA REPRESENTED BY GENERAL MANAGER, SHRI. AYUB.H.WALIKAR. …PETITIONER (BY SRI. ASHOK.A.KULKARNI AND SRI. H.R. KAMBIYAVAR., ADVOCATES)

AND:

1.

INCOME TAX OFFICER, WARD-1 AND TPS, AAYAKAR BHAVAN, SECTOR NO.24, NAVANAGAR, BAGALKOT-587 102, KARNATAKA.

2.

COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK, NEW DELHI-110 001. …RESPONDENTS (BY SRI. M. THIRUMALESH AND MISS. ROOPA ANAVEKAR., ADVOCATES)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, AN ORDER IS MADE AS UNDER: ORAL ORDER Sri.Ashok A.Kulkarni., counsel for the petitioner and Ms.Roopa Anavekar., counsel for the respondents have appeared in person. Sri.M.Thirumalesh., counsel for the respondents ha appeared through video conferencing. 2. The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the order dated 22.11.2022 passed by the first respondent under Section 220(6) of the Income Tax Act, 1961 in DIN & Letter No: ITBA/RCV/F/107/2022- 23/1047566449(1) vide Annexure-G. 3. Counsel for the petitioner in presenting his arguments submits that the order passed by the first respondent is opposed to the principles of natural justice. He argued by saying that the petitioner had been deprived of a personal hearing. Hence, he submits that the petitioner may be given an opportunity for a personal hearing. Counsel, therefore, submits that the Writ Petition may be allowed.

By way of reply, counsel Sri.M.Thirumalesh., submits that sufficient opportunity was given to the petitioner before passing the order. Hence, he justified the action of the department. He strongly objected to a remand. Counsel submits that the Writ Petition is devoid of merits and the same may be dismissed. 4. Heard the arguments and perused the Writ papers with care. 5. A perusal of the Writ papers reveals that an assessment order was passed on 22.09.2022. The petitioner assailed the assessment order before the National Faceless Appeal Centre (NFAC), Delhi and the same is pending adjudication. The petitioner applied to the first respondent seeking a stay of collection of tax demanded till the disposal of the appeal. The first respondent vide order dated 22.11.2022, directed the petitioner to pay 20% of the disputed amount. The petitioner contends that it has been deprived of personal hearing. Hence, this Court considers it proper to offer an opportunity for a personal hearing to the petitioner. Therefore, the matter requires a remand. The order dated 22.11.2022 is liable to be set aside, so it is set aside.

6.

The Writ of Certiorari is ordered. The order dated 22.11.2022 passed by the first respondent under Section 220(6) of the Income Tax Act, 1961 in DIN & Letter No: ITBA/RCV/F/107/2022-23/1047566449(1) vide Annexure- G is quashed. The matter is remanded to the first respondent. The respondent must provide an opportunity of a personal hearing to the petitioner and thereafter, pass orders as per the law. It is made clear that the petitioner should avail the opportunity of a personal hearing, failing which, the first respondent is directed to go ahead in the matter as per the law. Since the petitioner is represented by its counsel, the petitioner is directed to appear before the first respondent on 21.10.2024 without awaiting further notice. 7. Resultantly, the Writ Petition is allowed and remanded.

Sd/- (JYOTI MULIMANI) JUDGE TKN LIST NO.: 1 SL NO.: 55

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