SMT PANCHALINGA JYOTHI vs. THE NATIONAL FACELESS APPEAL CENTRE

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WP/21688/2023HC KarnatakaKAHC01050359202320 February 2024Author: S.R.KRISHNA KUMAR7 pages
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What did the High Court hold?

The High Court, while acknowledging the contentions of both parties, adopted a justice-oriented approach. It found merit in the petitioner's assertion that her inability to submit replies and contest proceedings was due to bonafide reasons, unavoidable circumstances, and sufficient cause. Consequently, the Court deemed it appropriate to provide one more opportunity to the petitioner. The impugned order dated 21.12.2018 of the 3rd respondent (ITO) was set aside, and the matter was remitted back to the 3rd respondent for reconsideration. The petitioner was granted liberty to submit her response and documents, which the 3rd respondent was directed to consider. The Court also noted the petitioner's submission that she would unconditionally withdraw her appeal before the First Appellate Authority. It was clarified that if the 3rd respondent passes an order against the petitioner after remand, the 2nd respondent would be entitled to claim applicable interest as per the Notice of Demand dated 21.12.2018.

What were the facts?

The petitioner, Smt. Panchalinga Jyothi, filed a writ petition challenging notices/endorsements issued by the Income Tax Officer (ITO), Ward 6(2)(1), Bengaluru, dated 27.07.2021 and 27.06.2022. She also sought to quash the assessment order and demand notice dated 21.12.2018 for Assessment Year 2016-17, and sought a direction to the National Faceless Appeal Centre (NFAC) to expeditiously dispose of her appeal. The petitioner contended that notices were not communicated to her, and due to her ill-health and her husband's hospitalization, she could not submit a response, leading to the impugned order being passed without a reasonable opportunity, violating principles of natural justice. She offered to withdraw her appeal before the appellate authority if given another opportunity.

What were the issues?

1. Whether the impugned notices/endorsements and the assessment order dated 21.12.2018, issued by the 3rd respondent (ITO), are liable to be quashed on the grounds of violation of principles of natural justice, specifically the lack of sufficient opportunity to the petitioner to submit her response due to unavoidable circumstances and ill-health. Assessee's Contention: The petitioner argued that the notices were not communicated, and her inability to respond was due to bonafide reasons (ill-health, hospitalization). She asserted that the assessment order was passed without providing a reasonable opportunity, violating natural justice. She also stated she would withdraw her appeal if given another chance. Revenue's Contention: The respondents supported the impugned order and argued that the petition lacked merit and was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 142

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.21688 OF 2023 (T-IT) BETWEEN:

SMT PANCHALINGA JYOTHI W/O RAVI GOWDA B R AGED ABOUT 37 YEARS R/A NO.15, 5TH MAIN ROAD AGRAHARA DASARAHALLI NEAR RAJAJINAGARA INDUSTRIAL TOWN BANGALORE-560079 …PETITIONER (BY SRI MALLAHAR RAO, ADVOCATE)

AND:

1.

THE NATIONAL FACELESS APPEAL CENTRE ROOM NO.245A, NORTH BLOCK NEW DELHI-110001 REPRESENTED BY COMMISSIONER OF INCOME TAX APPEALS

2.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-6 BENGALURU BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA, BENGALURU KARNATAKA-560095

3.

THE INCOME TAX OFFICER WARD 6(2)(1), BMTC BUILDING 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE

Digitally signed by VANDANA S Location: High Court of Karnataka

KORAMANGALA BENGALURU-560095 …RESPONDENTS (BY SRI M.DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE COSNTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICES / ENDORSEMENTS ISSUED BY RESPONDENT NO.3 DATED 27.07.2021 VIDE DIN ITBA/RCV/F/17/2021-22/1034458341(1) AT ANNEXURE-P AND ETC.,

THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

In this petition, the petitioner seeks the following reliefs:

“(i) Issue a writ of certiorari or in the like nature of certiorari quashing impugned notices / endorsements issued by the 3rd respondent a) dated 27.07.2021 vide DIN:ITBA/RCV/F/17/2021- 22 /1034458341(1) at Annexure-P and b) dated 27.06.2022 vide DIN:ITBA/RCV/F/17/2022-23 /1043582816(1) at Annexure-Q.

(ii) Issue Writ of Prohibition, not to proceed further steps or measures or any such kind of initiatives pertaining

recovery(s) pursuant impugned assessment order and the impugned demand made thereof vide – Annexure-H & Annexure-J; directing the respondent authorities to refrain from further coercive steps, in any manner

of whatsoever in nature, in pursuant to the impugned assessment order and demand notice, both dated 21.12.2018 for the assessment year 2016-17;

(iii) Issue writ of mandamus or writ direction to the 1st respondent authority to expeditiously dispose of appeal, vide appeal bearing No.CIT(A), Bengaluru - 6/10692/2018-19 as per Annexure-K and K1.

(iv) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of this case, in the interest of justice and equity.”

2.

Heard the learned counsel for the parties and 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 submitted that the notices issued by the 3rd respondent to the Auditor of the petitioner had not been communicated to her and due to her ill-health and hospitalization of herself and her husband, the petitioner was not in a position to submit her response / reply along with documents to the 3rd respondent as a result of which the 3rd respondent has

proceeded to pass the impugned order without providing sufficient and reasonable opportunity to the petitioner to submit her reply along with the documents thereby violating principles of natural justice, and as such, the impugned order deserves to be set aside. It is also submitted that though the petitioner has preferred an appeal before the 2nd respondent, if one more opportunity is provided to the petitioner by setting aside the impugned order of the 3rd respondent, the petitioner would unconditionally withdraw the appeal filed by her before the 2nd respondent – Appellate Authority.

4.

Per contra, learned counsel for the respondents would support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed.

5.

A perusal of the material on record will indicate that though several contentions have been urged by both sides in support of their respective claims, having regard to the specific assertion on the part of the petitioner that

her inability and omission to submit replies to the notices and to contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice oriented approach and to provide one more opportunity to the petitioner to submit her reply to the said notice under Section 142 of the Act and with the direction to the respondents to proceed further in accordance with law.

6.

However, it is to be stated that since indulgence is being shown in favour of the petitioner after a lapse of almost five 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 2nd respondent would be entitled to claim applicable interest in accordance with law and in terms of the Notice of Demand dated 21.12.2018 [Annexure-J].

7.

In the result, I pass the following: ORDER

(i) The petition is hereby allowed.

(ii) The impugned order dated 21.12.2018 [Annexure-H] of 3rd respondent is hereby set aside.

(iii) The matter is remitted back to the 3rd respondent for reconsideration afresh in accordance with law.

(iv) Liberty is reserved in favour of the petitioner to submit her response / reply along with the documents to the 3rd respondent, who shall consider the same and proceed further in accordance with law.

(v) It is further directed that in the event, the 3rd respondent does not accept the response / reply of the petitioner and passes an order against the petitioner, the 2nd respondent would be entitled claim applicable interest in accordance with law and

in terms of the Notice of Demand dated 21.12.2018 [Annexure-J].

(vi) Submission made on behalf of the petitioner that she would unconditionally withdraw the appeal preferred by her before the First Appellate Authority is placed on record.

SD/- JUDGE

SA List No.: 1 Sl No.: 14

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