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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF APRIL, 2022
BEFORE
THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD
WRIT PETITION NO.8417/2022 (T-IT)
BETWEEN :
LAXMI VENKATESH CREDIT CO-OPERATIVE SOCIETY LTD., 1ST FLOOR, SUNANDA DEVADAS TOWER, P.P.C ROAD, UDUPI TALUK AND DISTRICT – 576 101. REP. BY ITS SECRETARY MR MURALIDHAR RAO, REGISTERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959. ... PETITIONER (BY SRI.MAHESH.R.UPPIN, ADVOCATE)
AND :
ASSESSING OFFICER,
NATIONAL FACELESS ASSESSMENT CENTRE,
NEW DELHI – 110 002.
INCOME TAX OFFICER,
WARD 1 & TPS,
AAYAKAR BHAVAN,
ADI-UDUPI MALPE ROAD,
UDUPI – 576 103. ... RESPONDENTS (BY SRI.E.I.SANMATHI, ADVOCATE)
2 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE PENALTY ORDER DATED 07.01.2022 PASSED BY RESPONDENT No.1 IN PAN No.AAAJL0987F MARKED AS ANNEXURE-G AND THE CONSEQUENTIAL DEMAND NOTICE DATED:07.01.2022 BEARING PAN No.AAAJL0987F ISSUED BY RESPONDENT No.1 MARKED AS ANNEXURE-H BY ISSUING A WRIT IN THE NATURE OF CERTIORARI, ETC.
THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The petitioner has impugned the penalty order dated 07.01.2022 under Section 27(1)(c) of the Income Tax Act, 1961 [Annexure ‘G’] and the consequential demand notice dated 07.01.2022 [Annexure ‘H’].
The undisputed facts are that the Assessment Order dated 30.10.2015 was challenged by the petitioner before the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru. The Tribunal allowed the petitioner’s appeal but restored the matter for re- consideration by the jurisdictional Assessing Officer. The petitioner has challenged the Tribunal’s order before a Division Bench of this Court in I.T.A. No.211 of
3 2019 under Section 260A of the Act. During the pendency of this appeal before the Division Bench of this Court, the Assessment Order, consequent to the demand order by the Tribunal, is passed on 30.12.2019. The petitioner has amended the Income Tax Appeal before the Division Bench to include a challenge to the Assessment Order dated 30.12.2019. The Division Bench has disposed of the petitioner’s appeal by order dated 29.09.2021 which reads as under: “ i) The appeal is allowed in part.
ii) The order dated 31.12.2018 passed in ITA No.396/Bang/2018 by the Income Tax Appellate Tribunal, “B” Bench, Bangalore as well as the order dated 30.12.2019 passed by the Income Tax Officer, Udupi, Ward-3 in case bearing F.No.AAAJL0987F / ITO / W-3/ UDP / 2019-20 relating to the assessment year 2013-14 are set aside.
4 iii) The matter is restored to the file of the Assessing Officer to redo the assessment considering Sections 2(f) and 60 of the Karnataka Co-operative Societies Act, 1959 vis-à-vis the judgment of the Hon’ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd., and others vs.Commissioner of Income Tax, Calicut and another reported in 2021 SCC Online SC 16.
iv) All the rights and contentions of the parties are left open.
v) The Assessing Officer shall re-consider the matter in accordance with law and decision shall be taken in an expedite manner.
vi) In view of the disposal of the main matter, all the pending applications stand disposed of.”
Sri.Mahesh R.Uppin, learned counsel for the petitioner, submits that after the Division Bench’s order, the assessment has not been re-done, but based on the Assessment Order dated 30.12.2019, the present
5 penalty order dated 07.01.2022 is passed for the issuance of the consequential notice of demand. The Authorities, with the decision of the Division Bench, could not have relied upon the Assessment Order dated 30.12.2019.
Sri.E.I.Sanmathi, learned counsel for the respondents, is unable to controvert any of these submissions and if these submissions remain uncontroverted, this Court is of the considered view that the impugned penalty order dated 07.01.2022 and the demand notice also dated 07.01.2022 [Annexures ‘G’ and ‘H’ respectively], will have to be quashed, but with liberty to the respondents to initiate action, if necessary, once the assessment is re-done as provided for by the Division Bench of this Court in the aforesaid order.
Therefore, the petition is disposed of quashing the impugned penalty order dated 07.01.2022 and the
6 demand notice also dated 07.01.2022 [Annexures ‘G’ and ‘H’ respectively] with liberty to the respondents as aforesaid.
Sd/-
JUDGE
RK/-
Ct: SN