RAHIM SAIB HIRIYUR HYDER ALI vs. NATIONAL FACELESS ASSESSMENT CENTRE

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 2ND DAY OF SEPTEMBER, 2022

BEFORE

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

WRIT PETITION No.15524 OF 2022 (T-IT)

BETWEEN:

RAHIM SAIB HIRIYUR HYDER ALI, PROPRIETOR OF M/S. AFRA TRANSPORT, S/O SRI ABDUL RAHIM SAIB, AGED ABOUT 55 YEARS, OFFICE AT MIRZA EXTENTION, HIRIYUR-577 598. PAN: ACKPH4805L …PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE)

AND:

REP. BY ADDITIONAL/JOINT/DEPUTY/

ASSISTANT COMMISSIONER OF INCOME-TAX /

INCOME TAX OFFICER, INCOME TAX

DEPARTMENT, MINISTRY OF FINANCE,

ROOM NO.401, 2ND FLOOR, E-RAMP,

JAWAHARLAL NEHRU STADIUM.

DELHI-110 003.

WARD 2, CHITRADURGA,

AAYAKAR BHAVAN TAMATKAL ROAD,

MEDEHALLY, CHITRADURGA-577 502.

…RESPONDENT/S (BY SRI E.I. SANMATHI, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER U/S 14(3) RWS 254 RWS 144B OF THE ACT DTD 26.09.2021 BEARING DIN NO.ITBA/AST/S/143(3)/2021-22/1035906288(1) ISSUED BY

2 THE R1 FOR THE ASSESSMENT YEAR 2010-11 HEREIN MARKED AS ANNEXURE-A1 AND ETC.

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

ORDER

In this petition, the petitioner has sought for the following reliefs: a. Issue writ of Certiorari or direction in the nature of a writ of certiorari quashing the assessment order passed under section 14(3) rws 254 rws 144B of the Income Tax Act, 1961 dated 26.09.2021 bearing DIN No.ITBA/AAST/S/143(3) /2021-22/1035906288(1) issued by the Respondent No.1 for the AY 2010-11 herein referred as Annexure-A1. b. Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing Notice of demand issued u/s 156 of the Act dated 26.09.2021 bearing DIN and Notice No.ITBA/AST/S/156/2021-22/1035906315(1) issued by the Respondent No.1 for the AY 2010- 11 herein marked as Annexure-A2. c. Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the penalty order u/s. 271(1)(c) of the Act dated 21.02.2022 bearing DIN No.ITBA/PNL/F/271(1)(c)/2021- 22/1039971497(1) issued by the Respondent No.1 for the AY 2010-11 herein marked as Annexure-A3.

3 d. Issue a writ of Certiorari and direction in the nature of a writ of certiorari quashing the Notice of demand issued in respect of penalty order, u/s. 156 of the Act dated 21.02.2022 bearing DIN and Notice No.ITBA/PNL/S/156/2021- 22/1039971511(1) in respect of penalty order u/s. 271(1)(c), issued by the Respondent No.1 for the AY 2010-11 herein marked as Annexure- A4. e. Issue a writ of mandamus or a direction in the nature of a writ of mandamus directing the Respondent No.1 to follow the direction of the Tribunal and pass the assessment order for the impugned assessment year 2010-11. f. And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.

4 Tribunal (ITAT) in ITA No.3435/Bang/2018 preferred by the petitioner in order to point out that in the said order, the Tribunal remitted the matter back to the Assessing Authority by issuing specific directions regarding examining the scheme of the petitioner-Assessee. It is the grievance of the petitioner that despite the categorical and specific directions issued by the Tribunal to the Assessing Authority, the Assessing Authority has not complied with the said directions and has proceeded to pass the impugned order without considering or appreciating the specific directions issued by the Tribunal, as such, the impugned order deserves to be set aside on this ground alone. Secondly, it is contended that show-cause notice was issued by the Assessing Authority on 22.09.2021 enclosing the approved Assessment Order giving an extremely small period of two days to file reply and due to paucity of time and on account of unavoidable circumstances, bonafide reasons and sufficient cause, the petitioner was not in a position to comply with the said show-cause notice and consequently, in a hurried manner, the Assessing Authority has proceeded to pass the

5 impugned order within a period of two days from the date of issuance of the show-cause notice which is yet another ground to quash the impugned order. Thirdly, it is contended that the aforesaid order dated 19.12.2019 passed by the ITAT has attained finality and the same has become conclusive and binding upon both the parties including the petitioner, who has not challenged the same by taking recourse to such remedies available in law and as such, it was incumbent upon the Assessing Authority to follow, comply and obey the directions issued by the Tribunal. Lastly, it is contended that the petitioner has additional documents to substantiate his claim in relation to the directions issued by the Tribunal and as such, if one more opportunity is granted to the petitioner, he would do so by filing all relevant documents in this regard. It is therefore submitted that the impugned order passed by the Assessing Authority deserves to be set aside.

6 petitioner did not produce documents before the Assessing Authority as directed by the Tribunal, the Assessing Authority was fully justified in passing the impugned order, which does not warrant interference by this Court.

7 12. In view of the discussion made Supra, for the limited purpose of examining the above said claim of the assessee, we restore this issue to the file of the AO. If the assessee has maintained books of account for the immediately preceding year and he was not liable for getting his accounts audited u/s 44AB of the Act, then the impugned disallowance is not warranted. If the AO was satisfied that the assessee has not maintained books of accounts, then the claim of the assessee needs to be accepted that the provisions of sec.44AB shall not apply in the immediately preceding year. In that case also, the impugned disallowance is not warranted. If the assessee has maintained books of accounts for the immediately preceding year and the same is liable to audit u/s 44AB of the Act, then the impugned disallowance needs to be sustained.

If we examine the impugned order in the light of the aforesaid order passed by the ITAT, in particular, the directions issued by the ITAT while remitting the matter back to the Assessing Authority, it becomes abundantly clear that specific and definite directions were issued to the

8 Assessing Authority to comply before passing the impugned order. However, a perusal of the order will clearly indicate that the said directions have not been complied with by the Assessing Authority as is clear from the impugned order itself. It is also relevant to state that though the Tribunal has directed the Assessing Authority to afford sufficient and adequate opportunity of being heard to the petitioner, the Assessing Authority has granted only a period of two days from 22.09.2021, on which date show- cause notice was issued and called upon the petitioner to furnish his reply on or before 24.09.2021. It is needless to state that a short period of time given by the Assessing Authority to the petitioner to furnish his reply is not only contrary to the directions issued by the ITAT but is also violative of principles of natural justice and the same deserves to be quashed on this ground also.

9 consonance with the directions issued by the ITAT while remitting the matter back to the authority, the impugned order deserves to be set aside on this ground also by providing one more opportunity to the petitioner to produce additional materials in terms of the directions issued by the ITAT.

10 (iv) The respondent – Assessing Authority shall consider the claim of the petitioner and pass appropriate orders in accordance with law strictly in confirmity with the directions issued by the ITAT in its order dated 19.12.2019 referred to supra. (v) Liberty is reserved in favour of the petitioner to produce additional documents and file additional pleadings before the Assessing Authority in support of its claim.

Sd/- JUDGE

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