GUTHU RITHESH RAI vs. DY COMMISSIONER OF INCOME TAX

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WP/22239/2022HC KarnatakaKAHC01051748202210 November 2022Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the impugned assessment order and demand notice. The matter was remitted back to the respondents to proceed from the stage of the show cause notice, allowing the petitioner to file a reply and receive a personal hearing.

What were the facts?

The petitioner sought to quash an assessment order and demand notice issued under Section 144 of the Income Tax Act. The petitioner claimed that notices were sent to an old address and could not be responded to due to bonafide reasons.

What were the issues?

Whether the assessment order passed under Section 144 was valid when the assessee could not respond to notices due to bonafide reasons. Whether the assessee should be given an opportunity to contest the proceedings.

Which sections of the Income-tax Act were involved?

Section 144,Section 156

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 10TH DAY OF NOVEMBER, 2022

BEFORE

THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR

WRIT PETITION No.22239 OF 2022 (T-IT)

BETWEEN:

GUTHU RITHESH RAI SON OF NARAYANA RAI, AGED ABOUT 48 YEARS, ALIKE GUTHU HOUSE, ALIKE POST AND VILLAGE, VIA S S VIHAR BANTWAL TALUKA, DAKSHINA KANNADA-574 235, PRESENTLY RESIDING AT FLAT NO.T 302, ENN AAR KAY SADAN, 5/1-7, 4TH CROSS, KALPANA CHAWLA ROAD, CENTRAL EXCISE COLONY, SANJAY NAGAR, BENGALURU-560 094. ...PETITIONER (BY SRI.SHREEHARI KUTSA., ADVOCATE)

AND:

DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(4), BENGALURU, THE ASSESSING OFFICER UNDER INCOME TAX ACT, 1961, CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU-560 001.

…RESPONDENT (BY SRI. K.V.ARAVIND, ADVOCATE )

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF ASSESSMENT UNDER SECTION 144 OF THE INCOME TAX ACT 1961 DTD: 26.09.2022 ISSUED BY THE R-1 FOR THE ASSESSMENT YEAR 2021-22 WHICH BEARS THE DIN VIZ ITBA/AST/M/144/2022-23 /1045965040(1) WHICH IS ENCLOSED AS ANNEXURE-A AND ETC.

THIS W.P. COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:-

ORDER

In this petition, petitioner has sought for the following reliefs: a) Issue a writ of certiorari or direction in the nature of writ of certiorari quashing the order of assessment under Section 144 of the Income Tax Act, 1961 dated 26.09.2022 issued by the respondent No.1 for the Assessment year 2021-22 which bears the DIN viz., ITBA/AST/M /144/2022-23/1045965040(1)which is enclosed as Annexure A.

b) Issue a writ of certiorari or direction in the nature of writ of certiorari quashing the notice of demand under Section 156 of the Income Tax Act, 1961 dated 26.09.2022 issued by the respondent No.1 for the Assessment year 2021-22 which bears the DIN viz., ITBA/AST/M /144/2022-23/1045965040(1)which is enclosed as Annexure B.

c) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.

2.

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

3.

In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that while respondent conduct a search of the petitioner premises situated at Bengaluru, all the notices issued prior to the impugned order were sent to the address of the petitioner at Bantwal and the same could not be responded to on account of bonafide, reasonable, unavoidable circumstances and sufficient cause. It is submitted that the petitioner has a good case to urge on merits and as such, it is necessary that the petitioner is afforded one more opportunity to contest the proceedings by setting aside the impugned order and remitting the matter back to the respondents for reconsideration afresh in accordance with law.

4.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.

5.

Though several contentions have been urged, in view of the specific assertions on the part of the

4 petitioner that the inability and omission on the part of the petitioner to contest the proceedings by filing replies, documents, etc., to the Show Cause Notice was for bonafide reasons, without expressing any opinion on the merits / demerits of the rival contentions of the parties, I deem it just and appropriate to dispose of the matter by setting aside the impugned order and remit the matter back to the respondents for reconsideration afresh in accordance with law after providing opportunity to submit a reply to the Show Cause Notice and thereafter, proceed in accordance with law.

6.

In the result, I pass the following: ORDER

(i) Petition is hereby allowed. (ii) The impugned assessment order dated 26.09.2022 and Demand Notice dated 26.09.2022 at Annexures – A and B, respectively are hereby set aside.

5 (iii) Matter is remitted back to the respondents to proceed from the stage of issuance of Show Cause Notice. (iv) Petitioner is directed to file response / reply along with documents to the Show Cause Notice, within a period of four weeks from the date of receipt of a copy of this order, which shall be considered by the respondents, who shall provide an opportunity of personal hearing to the petitioner and proceed thereafter in accordance with law.

Sd/- JUDGE

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