SRI YUVARAJ vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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WP/26051/2023HC KarnatakaKAHC01060232202322 January 2024Author: S.R.KRISHNA KUMAR4 pages
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What did the High Court hold?

The High Court allowed the writ petition. It quashed the impugned order dated 30.03.2023 passed by the respondent No.2. The matter was remitted back to respondent No.2 for reconsideration afresh in accordance with law. The Court noted that while the respondent authorities concluded that principles of natural justice were complied with, the petitioner asserted bonafide reasons for his inability to respond. Adopting a justice-oriented approach, the Court deemed it appropriate to provide the petitioner with another opportunity. Liberty was granted to the petitioner to submit his reply and documents, and the respondent No.2 was directed to consider them and proceed after providing an opportunity of personal hearing.

What were the facts?

The petitioner, Sri Yuvraj, an individual assessee, filed his return of income for assessment year 2016-17. The respondents, the Assistant Commissioner of Income Tax (R-2) and the Principal Commissioner of Income Tax (R-1), issued a notice under Section 147 read with Section 144 of the Income Tax Act, 1961, followed by a notice under Section 142(1). The petitioner failed to submit a reply to these notices. Consequently, R-2 passed an ex parte order dated 30.03.2023. The petitioner challenged this order, along with subsequent orders dated 29.09.2023, before the High Court of Karnataka through a writ petition, asserting bonafide reasons and unavoidable circumstances prevented his participation.

What were the issues?

1. Whether the ex parte order dated 30.03.2023 passed by the Assistant Commissioner of Income Tax (R-2) under Section 147 read with Section 144 of the Income Tax Act, 1961, is liable to be quashed on the grounds of non-compliance with principles of natural justice, despite the petitioner's failure to respond to notices. The assessee (petitioner) contended that due to bonafide reasons, unavoidable circumstances, and sufficient cause, he was unable to submit a reply to the notices and participate in the proceedings. He sought an opportunity to present his case. The revenue (respondents) argued that principles of natural justice were complied with as sufficient and reasonable opportunity was provided to the petitioner prior to passing the impugned order.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 142(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF JANUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 26051 OF 2023 (T-IT) BETWEEN:

SRI YUVARAJ AGED ABOUT 50 YEARS VYBHAVA LAKSHMI NO.161, 8TH MAIN, 4TH CROSS, 14TH BLOCK, NAGARABHAVI BENGALURU – 560 071 …PETITIONER (BY SRI. SRI MALLAHA RAO K., ADVOCATE) AND:

1.

THE PRINCIPAL COMMISSIONER OF INCOME TAX OF KARNATAKA AND GOA QUEENS ROAD, BANGALORE-560001

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(4) BENGALURU-560001 …RESPONDENTS (BY SRI.M. DILIP, ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 30.03.2023 PASSED IN BEARING DIN NO. ITBA/AST/S/147/2022-23/1051665430 (1) PASSED BY R-2

Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

VIDE ANNX-A AND DIRECT THE RESPONDENT AUTHORITIES TO REFRAIN FROM FURTHER PROCEEDINGS IN RESPECT OF THE ORDER DTD 29.09.2023 PASSED IN ORDER BEARING DIN NO. ITBA/PNL/F/271(1) (C)/2023-24/1056662818(1) PASSED BY RESPONDENT NO.2 VIDE ANNX-B AND ORDER DTD 29.09.2023 PASSED IN ORDER BEARING DIN NO. ITBA/PNL/F/271(1)(C)/2023-04/1056662828 (1) PASSED BY R- 2 VIDE ANNX-C AND ETC.

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

This petition is directed against the impugned order dated 30.03.2023 vide Annexure-A passed by the respondent No.2 under Section 147 read with Section 144 of the Income Tax Act, 1961 [for short, ‘the Act’].

2.

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

3.

The material on record discloses that the petitioner is an individual assessee who filed return of income for the assessment year 2016-17. Pursuant to the

impugned proceedings, the respondents are said to have issued notice under Section 142[1] of the Act and since the petitioner had not submitted any reply to the said notice/show cause notice, the respondents proceeded to pass the impugned ex parte order, aggrieved by which the petitioner is before this Court by way of present petition.

4.

A perusal of the impugned order will indicate that the respondents have come to the conclusion that principles of natural justice had been complied with since sufficient and reasonable opportunity had been provided to the petitioner prior to passing the impugned order. However, in view of the specific assertion on the part of the petitioner that due to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner was not in a position to submit reply along with the documents to the notice/show cause notice and participate in the proceedings in order to provide one more opportunity to the petitioner and by adopting justice oriented approach, I deem it just and appropriate to set aside the impugned order, remand the matter back to the respondent for

reconsideration afresh in accordance with law. In the result, the following: ORDER [a] The petition is hereby allowed. [b] The impugned order dated 30.03.2023 [Annexure-A] of the respondent No.2 is hereby quashed. [c] The matter is remitted back to the respondent No.2 for reconsideration afresh in accordance with law. [d] Liberty is reserved in favour of the petitioner to submit his reply, documents etc., before the respondent No.2, who shall consider the same and proceed further in accordance with law after providing an opportunity of personal hearing to the petitioner.

Sd/- JUDGE

AN/-

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