NORTHLAND HOLDING COMPANY vs. DEPUTY COMMISSIONER OF INCOME TAX

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WP/21200/2022HC KarnatakaKAHC01048803202204 November 2022Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court found that the assessment order was passed in violation of natural justice principles as the petitioner's response and documents were not considered. The court decided to set aside the order and remit the matter back for reconsideration.

What were the facts?

The petitioner sought to quash an assessment order, claiming they were unable to submit a timely response due to technical glitches and unavoidable circumstances. Despite submitting a physical reply, the respondents passed the order without considering it.

What were the issues?

Whether the assessment order was passed in violation of principles of natural justice due to non-consideration of the assessee's reply and documents. Whether the petitioner was denied a reasonable opportunity to present their case.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 156,Section 274,Section 270A,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF NOVEMBER, 2022 BEFORE

THE HON’BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.21200/2022 (T-IT) BETWEEN:

NORTHLAND HOLDING COMPANY PRIVATE LIMITED PRESTIGE FALCON TOWER NO.19, BRUNTON ROAD BANGALORE-560 025

A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH PAN AACCN9794P AND REPRESENTED BY ITS AUTHORIZED SIGNATORY MR.MANOJ KRISHNA J.V.

… PETITIONER

(BY SRI SUDHEENDRA B.R., ADVOCATE)

AND:

1 . DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 5(1)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, KORAMANGALA BANGALORE-560 095

2 . PRINCIPAL COMMISSIONER OF INCOME TAX BANGALORE-5 BANGALORE BMTC BUILDING 80 FEET ROAD, 6TH BLOCK KORAMANGALA BANGALORE-560 095. (REPRESENTING THE NATIONAL

FACELESS ASSESSMENT CENTRE)

… RESPONDENTS (BY SRI E.I.SANMATHI, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE ASSESSMENT ORDER PASSED BY THE ASSESSMENT UNIT, INCOME TAX DEPARTMENT UNDER SECTION 143 (3) READ WITH SECTION 144B DATED 22.09.2022 BEARING DIN ITBA/AST/S/143(3)/2022- 23/1045805344(1) FOR THE AY 2020-21 (ANNEXURE-J) AND ETC.

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

ORDER

1.

In this writ petition, petitioner seeks the following reliefs: "(a) Quashing the assessment order passed by the Assessment Unit, Income tax department under section 143(3) read with section 144B dated: 22.9.2022 bearing DIN ITBA/AST/S/143(3)/2022- 23/1045805344(1) for the AY 2020-21 (Annexure-J).

(b) Quashing the computation sheet dated 22.9.2022 sent along with the impugned assessment order by the Assessment Unit, Income tax department bearing DIN ITBA/AST/S/630/2022-23/1045805376(1) for the AY 2020-21 (Annexure K).

(c) Quashing the notice of demand under section 156 dated 22.9.2022 bearing DIN ITBA/AST/S/156/2022-23/1045805362(1) for the AY 2020-21 (Annexure-L).

(d) Quashing the notice for penalty under section 274 read with section 270A dated 22.9.2022 for the AY 2020-21 with DIN ITBA/PNL/S/270A/2022-23/ 1045805369(1) (Annexure-M).

(e) Quashing the notice for penalty under section 274 read with section 271AAC(1) dated 22.9.2022 for the AY 2020-21 with DIN ITBA/PNL/S/271AAC(1)/ 2022-23/1045805370(1) (Annexure N).

(f) Passing such other or further orders as this Hon'ble High Court may think fit in the facts and circumstances of the case, in the interests of justice and equity.

2.

Heard Sri Sudheendra B.R., learned counsel for the petitioner and Sri E.I.Sanmathi, learned counsel for the respondents and perused the material on record.

3.

In addition to reiterating various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invites my attention to the show-cause notice dated 02.09.2022 produced at Anneuxre-H1 in order to point out that the petitioner was granted time up to 07.09.2022 to submit

the reply/response to the said notice. It is submitted that due to bonafide reasons, unavoidable circumstances and sufficient cause, petitioner was not in a position to submit the reply/response along with relevant documents on or before 07.09.2022 and accordingly, petitioner submitted a request on 07.09.2022 seeking adjournment up to 09.09.2022. Subsequently, after compiling and collating all the documents, petitioner attempted to submit the reply/response to the respondents, which was not possible in view of technical glitches in the portal of the respondents. Accordingly, the petitioner submitted a detailed physical reply/response along with relevant documents on 10.09.2022 to the respondents.

4.

It is the grievance of the petitioner that despite the aforesaid facts and circumstances, in particular, the adjournment request and the reply/response along with relevant documents being submitted physically to the respondents, respondents have proceeded to pass the impugned assessment order on the erroneous premise that the petitioner has not submitted its reply along with relevant documents and as such, petitioner is before this Court by way of the present petition.

5.

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

6.

As rightly contended by the learned counsel for the petitioner, the material on record discloses that on 07.09.2022, petitioner has made a specific request for adjournment up to 09.09.2022 on the ground that it was not in a position to collate and compile the documents and submit the same along with detailed response. So also on 09.09.2022, petitioner was not in a position to submit the same on account of technical glitches in the portal of the respondents. It was also seen that on 10.09.2022, a detailed response/reply along with relevant documents have been submitted by the petitioner physically to the respondents, all of which have not been considered or adverted to by the respondents while passing the impugned order subsequently on 22.09.2022. Thus, the impugned assessment order passed is clearly violative of principles of natural justice and by adopting a justice oriented approach, I am of the opinion that one more opportunity has to be given to the

petitioner to contest the proceedings by setting aside the impugned order and remitting the matter back the respondents for reconsideration afresh in accordance with love.

7.

In the result, I pass the following: ORDER (i) Petition is hereby allowed.

(ii) The impugned assessment order dated 22.09.2022 is set aside.

(iii) The matter is remitted to the respondents with a direction to them to accept the reply/response along with documents produced by the petitioner and pass orders in accordance with law after giving opportunity of personal hearing to the petitioner.

(iv) Liberty is reserved to the petitioner to produce additional pleadings/documents etc., before the respondents, who shall consider the same and proceed further in accordance with law.

SD/- JUDGE PKS

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