MS SREENIVASA BHAVANA vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP/23066/2024HC KarnatakaKAHC01049518202428 August 2024Author: S.R.KRISHNA KUMAR6 pages
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What did the High Court hold?

The High Court allowed the petition, setting aside the impugned Assessment Order dated 15.11.2019. The Court reasoned that the proceedings culminating in the impugned order were not conducted after providing sufficient and reasonable opportunity to the petitioner, thereby violating the principles of natural justice. The Court noted the absence of details regarding the service of notices under Section 142(1) of the Act in the impugned order. Consequently, the matter was remitted back to the second respondent for reconsideration. The petitioner was granted liberty to submit their response/reply along with documents, which the second respondent was directed to consider. The Court also stipulated that if the second respondent passes an order against the petitioner after remand, they would be entitled to claim interest on the amount as per the Notice of Demand dated 28.06.2019. No issue was expressly left undecided.

What were the facts?

The petitioner, Ms. Sreenivasa Bhavana, filed a writ petition before the High Court of Karnataka seeking to quash several orders and notices issued by the Assistant Commissioner of Income Tax and the National Faceless Assessment Centre. These included an assessment order dated 15.11.2019 and various show-cause notices issued between August 2019 and January 2022. The petitioner contended that the impugned orders were unreasoned, non-speaking, and passed without providing a sufficient and reasonable opportunity to submit a reply, thus violating principles of natural justice. Specifically, the petitioner highlighted the absence of details regarding the service of notices under Section 142(1) of the Income Tax Act, 1961. The petitioner also filed a memo seeking to unconditionally withdraw an appeal filed before the First Appellate Authority concerning the impugned order.

What were the issues?

1. Whether the impugned orders and notices were passed in violation of the principles of natural justice due to the lack of sufficient opportunity for the petitioner to respond, and the absence of details regarding the service of notices under Section 142(1) of the Income Tax Act, 1961? (Question of law and fact, concerning Section 142(1) and principles of natural justice). Assessee's Contention: The petitioner argued that the orders were unreasoned, non-speaking, and lacked details on the service of Section 142(1) notices. The petitioner claimed they were not provided with sufficient and reasonable opportunity to reply, thus violating natural justice. The petitioner also sought to withdraw an appeal filed before the First Appellate Authority. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 142(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 23066 OF 2024 (T-IT) BETWEEN:

MS. SREENIVASA BHAVANA, D/O NARAYANASETTY SRINIVASA, AGED BOUT 29 YEARS, RESIDING NO. 208, 2ND MAIN ROAD, MAHALAKSHMI LAYOUT, BANGALORE KARNATAKA-560 086. …PETITIONER (BY SRI. ALOK MADAPPA, ADVOCATE AND SMT.MARIA JOSEPH, ADVOCATE)

AND:

1.

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 6(2)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE, KARNATAKA-560 095.

2.

NATIONAL FACELESS ASSESSMENT CENTRE MINISTRY OF FINANCE, INCOME TAX DEPARTMENT, DELHI – 110 001. REP BY INCOEM TAX OFFICER. …RESPONDENTS

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED. 11.01.2022 BEARING ITBA/PNL/F/271AAC(1)/2021-22/1038606216(1) (ANNEXURE-A) ISSUED BY R-2 AND QUASH THE SHOW CAUSE NOTICE DATED. 17.08.2021 BEARING ITBA/PNL/F/17/2021-22/1034936125(1) (ANNEXURE-B) ISSUED BY R-2 AND ETC.

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

THIS WRIT 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 as Writ / Direction / Order in the nature of Certiorari, quashing the order dated 11.01.2022 bearing ITBA/PNL/F/271AAC(1)/2021-22/1038606216(1) (ANNEXURE-A) issued by Respondent No.2.

II. Issue as Writ / Direction / Order in the nature of Certiorari, quashing the Show Cause Notice dated 17.08.2021 ITBA/PNL/F/17/2021- 22/1034936125(1) (ANNEXURE-B) issued by Respondent No.2.

iii. Issue as Writ / Direction / Order in the nature of Certiorari, quashing Show Cause Notice dated 23.02.2021 ITBA/PNL/F/271AAC(1)/2020- 21/1030893177(1) (ANNEXURE-C) issued by Respondent No.2.

iv. Issue as Writ / Direction / Order in the nature of Certiorari, quashing Assessment Order bearing No. ITBA/AST/S/143(3)/2019-20/1020516732(1) dated 15.11.2019 (ANNEXURE-D) issued by Respondent No.2.

v. Issue as Writ / Direction / Order in the nature of Certiorari, quashing Show Cause Notice dated 17.10.2019 ITBA/AST/F/143(3)(SCN)/2019-

20/1019024858(1) (ANNEXURE-E) issued by Respondent No.1.

vi. Issue as Writ / Direction / Order in the nature of Certiorari, quashing Show Cause Notice dated 10.09.2019 ITBA/AST/F/143(3)(SCN)/2019-20/ 1017879612(1) (ANNEXURE-F) issued by Respondent No.1.

vii. Issue as Writ / Direction/ Order in the nature of Certiorari, quashing Show Cause Notice dated 14.08.2019 bearing No.ITBA/AST/F/143(3)(SCN)/2019-20/1017404022 (1) (ANNEXURE-G); issued by Respondent No.1.

viii. Pass such other or further order as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity.”

2.

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

3.

In addition to reiterating various contentions urged in the petition and referring to the material on record, the learned counsel for the petitioner invited my attention to the impugned order in order to point out that apart from the fact that the same is an unreasoned and non-speaking order, the details as regards how and when the notices dated 08.01.2019, 29.07.2019 and 29.07.2019 under Section 142[1] of the Income Tax Act, 1961 [for

short, ‘the Act’] were allegedly served upon the petitioner are conspicuously absent in the impugned order and the second respondent has proceeded to pass the impugned order without providing sufficient and reasonable opportunity to the petitioner to submit his reply along with the documents thereby violating principles of natural justice, and as such, the petitioner is before this Court by way of present petition.

4.

The learned counsel for the petitioner has filed a memo seeking to unconditionally withdraw the appeal filed by him before the First appellate Authority in relation to the impugned order.

5.

A perusal of the impugned order will indicate that the second respondent has not stated the details as to the service of notice upon the petitioner or as to whether the same was uploaded on the portal or sent to the registered e-mail ID of the petitioner. In the paragraph-4 of the impugned order, except stating that notices under section 142[1] of the Act were issued to the petitioner, the second respondent has not stated as to when the said notice were delivered/served upon the petitioner.

6.

Under these circumstances, I am of the considered opinion that the impugned notice, proceedings culminating in the

impugned order cannot be said to have been done after providing sufficient and reasonable opportunity to the petitioner, thereby violating principles of natural justice and consequently, the impugned order deserves to be set aside by adopting justice oriented approach and to provide one more opportunity to the petitioner to submit his reply to the said notices under Section 142 of the Act and with a direction to the respondents to proceed further in accordance with law. However, it is to be stated that since indulgence is being shown in favour of the petitioner after a lapse of almost four years from the date of the impugned order, in the event, the second respondent passes an order against the petitioner after remand by virtue of this order, the second respondent would be entitled to claim interest on the amount in terms of the Notice of Demand dated 15.11.2019 [Annexure-M].

7.

In the result, the following: ORDER [a] The petition is hereby allowed.

[b] The impugned Assessment order dated 15.11.2019 [Annexure-M] of the second respondent is hereby set aside.

[c] The matter is remitted back to the second respondent for reconsideration afresh in accordance with law. [d] Liberty is reserved in favour of the petitioner to submit his response/reply along with the documents to the second respondent, who shall consider the same and proceed further, in accordance with law. [e] In the event, the second respondent does not accept the response/reply of the petitioner and passes an order against the petitioner, the second respondent would be entitled to claim interest on the amount in terms of the Notice of Demand dated 28.06.2019 [Annexure-J].

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

BMC List No.: 1 Sl No.: 58

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