MSOURCE (INDIA) PRIVATE LIMITED vs. ASSISTANT COMMISIONER OF INCOME TAX

WP/22411/2024HC KarnatakaKAHC01047914202418 September 2024Author: S.R.KRISHNA KUMAR5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the appellate order passed by the Commissioner of Income Tax (Appeals) was a non-speaking order, lacking proper and cogent reasons for dismissing the appeal and confirming the penalty order. The Court found that the petitioner had submitted written submissions and requested a personal hearing, which was not granted. This failure to grant a personal hearing, coupled with the non-speaking nature of the order, constituted a violation of the principles of natural justice. Consequently, the Court set aside the impugned order and remitted the matter back to the appellate authority for reconsideration. The petitioner was granted liberty to submit further pleadings and documents, and the appellate authority was directed to provide a sufficient opportunity, including a personal hearing, before passing a fresh order in accordance with law.

What were the facts?

The petitioner, Msource (India) Private Limited, filed a writ petition before the High Court of Karnataka challenging an appellate order dated 25.04.2024 passed by the Commissioner of Income Tax (Appeals) (R-2). The appeal was against a penalty order dated 29.03.2019 passed by the Assistant Commissioner of Income Tax (R-1) for Assessment Year 2016-17. The petitioner's grievance was that despite submitting written submissions and requesting a personal hearing, the appellate authority passed a summary order without providing a reasoned decision. The respondents argued that the petition was not maintainable as the petitioner had an alternative remedy of appeal.

What were the issues?

1. Whether the appellate order dated 25.04.2024 passed by the Commissioner of Income Tax (Appeals) under Section 250 of the Income Tax Act, 1961, is liable to be quashed for being a non-speaking order and for violation of principles of natural justice? Assessee's Contentions: The petitioner contended that the impugned appellate order was a non-speaking order, passed summarily without recording any reasoned decision. They further argued that despite submitting written submissions and explicitly requesting a personal hearing, the appellate authority failed to grant it, thereby violating the principles of natural justice. The petitioner sought to quash the order on these grounds. Revenue's Contentions: The revenue supported the impugned order and argued that the writ petition was not maintainable because the petitioner had an alternative remedy of filing a further appeal against the order.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 22411 OF 2024 (T-IT) BETWEEN:

MSOURCE (INDIA) PRIVATE LIMITED BAGMANE WORLD TECHNOLOGY CENTRE DODANEKUNDI OUTER RING ROAD, DODDANEKKUNDI B O BENGALURU NORTH BENGALURU - 560 037 PAN NO AACCM 2097G A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956 REPRESENTED BY MR ARJIT GANGULY S/O AMITAVA GANGULY AGED ABOUT 52 YEARS OCCUPATION: SENIOR VICE PRESIDENT AND GROUND HEAD - TAXATION RESIDING AT BAGMANE TECHNOLOGY PARK LAUREL BUILDING C V RAMAN NAGAR BENGALURU - 560 003 …PETITIONER

(BY SRI. PAI DHUNGAT ANKUR DEEPAK, ADVOCATE) AND:

ASSISTANT COMMISIONER OF INCOME TAX CIRCLE 4 (1) (1) BMTC BUILDING 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095

THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEALS CENTRE

Digitally signed by REKHA R Location: High Court of Karnataka

INCOME TAX DEPARTMENT MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI - 110 001 …RESPONDENTS (BY SRI. SUSHAL TIWARI, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE FOLLOWING ANNEXURE-F, IMPUGNED APPELLATE ORDER DATED 25.04.2024 PASSED BY THE R-2 UNDER SEC 250 OF THE IT ACT FOR THE AY 2016-17 IN DIN AND ORDER NO. ITBA/NFAC/S/250/2024-25/1064344325(1) PASSED IN APPEAL NO. CIT(A), BENGALURU - 4/10030/2019-20, GRANT AN INTERIM ORDER TO PENDING THE HEARING AND FINAL DISPOSAL OF THIS PETITION AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, 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 writ of certiorari or any other writ as the Hon'ble High Court may deem fit and quash Annexure 'F' impugned appellate order dated 25.04.2024 passed by the respondent No.2 under Section 250 of the IT Act for the AY 2016-17 in DIN & Order No.ITBA/NFAA/S/250/2024- 25/1064344325(1) passed in Appeal No.CIT(A), Bengaluru-4/10030/2019-20. (ii) Issue any other writ, order or direction to which the Petitioner is found entitled to in the present facts and circumstances.”

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

A perusal of the material on record will indicate that aggrieved by the penalty order dated 29.03.2019 passed by respondent No.1, the petitioner filed an appeal before respondent No.2 First Appellate Authority on 29.04.2019. In pursuance of the same, respondent No.2 issued a notice to the petitioner on 24.01.2021 to which the petitioner submitted duly written submissions vide Annexure - E dated 08.02.2021 in which he made a request for personal hearing. It is the grievance of the petitioner that despite putting forth duly written submissions and asking for opportunity for personal hearing, respondent No.2 First Appellate Authority has proceeded to pass the impugned order Annexure - F dated 25.04.2024 summarily dismissing the appeal without recording any reasoned order, which deserves to be set aside.

Per contra learned counsel for respondents supports the impugned order and submits that there is no merit in the petition and the same is liable to be dismissed. It is also submitted that the petitioner has an alternative remedy by way of an appeal

against the impugned order and as such the present petition is not maintainable and liable to be dismissed on this ground also.

As rightly contended by the learned counsel for the petitioner and Annexure - E dated 08.02.2021 alone not only indicate the petitioner has put forth various grounds, submission, contentions, documents, etc., in support of his claim, but also sought for opportunity of personal hearing, which is undisputedly not been granted by respondent No.2. It is also pertinent to note that the impugned order is clearly non-speaking order without assigning proper and cogent reasons as to why respondent No.2 dismissed the appeal confirming the penalty order passed by respondent No.1 and consequently, in view of violation of principles of natural justice noted supra, I am of the considered opinion that the impugned order Annexure - F deserves to be set aside and the matter has to be remitted back to respondent No.2 for reconsideration afresh in accordance with law.

In the result, pass the following:

ORDER

(i) The petition is hereby allowed.

(ii) The Impugned order at Annexure - F is hereby set aside.

(iii) Matter is remitted back to respondent No.1 First Appellate Authority for reconsideration afresh in accordance with law.

(iv) Liberty is reserved in favour of the petitioner to submit replies, responses, pleadings, documents, etc., to the respondent, who shall consider the same, provide sufficient and reasonable opportunity to the petitioner and also grant personal hearing and proceed further in accordance with law.

In view of disposal of writ petition, pending applications does not survive for consideration and the same are also disposed of.

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

RR List No.: 1 Sl No.: 50

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