MS SREENIVASA BHAVANA vs. THE INCOME TAX OFFICER

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WP/23044/2024HC KarnatakaKAHC01049516202428 August 2024Author: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition, setting aside the impugned assessment order dated 30.12.2019. The Court found 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. This was based on the observation that the impugned order lacked details regarding the service of the notice under Section 142(1) of the Act. The Court decided to adopt a justice-oriented approach and provide one more opportunity to the petitioner. The matter was remitted back to the second respondent for reconsideration. Liberty was granted to the petitioner to submit their response/reply, which the second respondent was directed to consider. In the event the second respondent passed 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.

What were the facts?

The petitioner, Ms. Sreenivasa Bhavana, filed a writ petition before the High Court of Karnataka challenging an order dated 28.06.2019 and show cause notices dated 30.12.2018 and 29.12.2018, as well as an assessment order dated 30.12.2018 and a show cause notice dated 24.12.2018. The petitioner contended that the impugned orders were unreasoned, non-speaking, and passed without providing a sufficient and reasonable opportunity to submit a reply to a notice under Section 142(1) of the Income Tax Act, 1961, thereby violating the principles of natural justice. The petitioner also sought to withdraw an appeal filed before the first appellate authority concerning the impugned order. The Court noted the absence of details regarding the service of the Section 142(1) notice.

What were the issues?

1. Whether the impugned orders, including the assessment order and show cause notices, are liable to be quashed for being unreasoned, non-speaking, and violative of the principles of natural justice due to the alleged lack of sufficient opportunity to the petitioner to respond to a notice under Section 142(1) of the Income Tax Act, 1961? (Question of law and mixed fact and law, concerning Section 142(1) and principles of natural justice). Assessee's Contention: The petitioner argued that the impugned orders were unreasoned and non-speaking. Crucially, the petitioner contended that details regarding the service of the notice under Section 142(1) of the Act were absent, and the assessment order was passed without providing a sufficient and reasonable opportunity to submit a reply, thus violating the principles of natural justice. 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. 23044 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. SYED KHAMRUDDIN, ADVOCATE SRI. ALOK MADAPPA, ADVOCATE AND SRI. MARA JOSEPH, ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER WARD 6(2)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE KARNATAKA-560 095.

2.

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. …RESPONDENTS

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER BEARING NO. ITBA/PNL/F/271/(1)(C)/2019-20/1016567966(1) DTD. 28.06.2019 (ANNX- A) AND QUASH SHOW CAUSE NOTICE BEARING NO. ITBA/PNL/S/271(1)(C)/2019-20/1016290127(1) DTD. 30.12.2018 (ANNX-B) AND ETC.,

THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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

CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, the petitioner seeks the following reliefs:

“i. Certiorari, quashing the Order bearing No. ITBA/PNL/F/271/(1)(C)/2019-20/1016567966(1) 28.06.2019 (Annexure-A).

ii. Certiorari, quashing Show Cause Notice bearing No. ITBA/PNL/S/271(1)(C)/2019-20/1016290127(1) 30.12.2018 (Annexure -B).

iii. Certiorari, quashing the Show Cause Notice bearing No. ITBA/PNL/S/271(1)(C)/2018-19/1014661554(1) 29.12.2018 (Annexure-C).

iv. Certiorari, quashing the Assessment Order bearing No. ITBA/AST/S/143(3)/2018-19/1014661547(1) 30.12.2018 (Annexure-D).

v. Certiorari, quash the Show Cause Notice bearing No. ITBA/AST/F/143(3)(SCN)/2018-19/1014554796(1) dated 24.12.2018 (Annexure-E).

vi. 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 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 invited my attention to the impugned order in order to point out that apart from the fact that the same is un-reasoned and non-speaking order, the details as regards how and when the notice dated 05.10.2018 under Section 142[1] of the Income Tax Act, 1961 [for short, ‘the Act’] was 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-1 of the impugned order, except stating that notice under section 142[1] of the Act was issued to the petitioner, the second respondent has not stated as to when the said notice was 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 notice 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 28.06.2019 [Annexure-J].

7.

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

[b] The impugned Assessment order dated 30.12.2019 [Annexure-F] 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.: 57

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