M/S BHIMA JEWELLERS vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL

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WP/19366/2021HC KarnatakaKAHC01039010202125 November 2021Bench: S.R.KRISHNA KUMAR4 pages
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What did the High Court hold?

The High Court held that the impugned notification was not in conformity with the mandatory requirements of Section 127 of the Income Tax Act. It was found to be a non-speaking, cryptic, and unreasoned order, lacking valid or cogent reasons.

What were the facts?

The petitioner, M/s. Bhima Jewellers, sought to quash a notification issued by the Principal Commissioner of Income-Tax under Section 127 of the Income Tax Act. The petitioner argued that the notification lacked mandatory requirements and valid reasons.

What were the issues?

Whether the impugned notification issued under Section 127 of the Income Tax Act was passed without assigning valid and cogent reasons, thus violating mandatory procedural requirements.

Which sections of the Income-tax Act were involved?

Section 127

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 25TH DAY OF NOVEMBER, 2021 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.19366 OF 2021 (T-IT) BETWEEN: M/S. BHIMA JEWELLERS, REPRESENTED BY ITS PARTNER, SRI. VISHNU SHARAN K. BHAT, SON OF SRI. B. KRISHNAN, AGED ABOUT 33 YEARS, NO.122/C, 8TH MAIN, 3RD BLOCK, JAYANAGAR, BANGALORE-560 011. …PETITIONER (BY SRI ANNAMALAI S., ADVOCATE) AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME-TAX (CENTRAL), BENGALURU, CENTRAL REVENUES BUILDING, QUEENS ROAD, BENGALURU-560 001. 2. THE ADDITIONAL COMMISSIONER OF INCOME TAX, CENTRAL RANGE-3, ROOM NO.308, 3RD FLOOR, NO.46, INVESTIGATION BUILDING, M.G. ROAD, CHENNAI-600 034. 3. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(3), NO.46, INVESTIGATION BUILDING, M.G. ROAD, CHENNAI-600 034.

…RESPONDENTS (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 NOTIFICATION PASSED UNDER THE PROVISION OF SECTION 127 OF THE ACT BY THE R-1 DTD 07.07.2021 REFERRED VIDE ANNX-A AND DIRECT IN THE NATURE OF

2 PROHIBITION RESTRAINING R-2 AND 3 FROM TAKING ANY FURTHER ACTION IN PURSUANCE OF THE IMPUGNED NOTIFICATION PASSED UNDER THE PROVISION OF SECTION 127 OF THE ACT BY THE R-1 DTD 07.07.2021 REFERRED AS ANNX-A ELSE THE PETITIONER WILL SUFFER GRAVE AND IRREPARABLE LOSS.

THIS W.P. COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER

In this petition, the petitioner seeks quashing of the impugned notification at Annexure-A dated 07.07.2021 passed by respondent No.1 under Section 127 of the Income Tax Act, 1961 (for short "the I.T. Act") and for other reliefs.

2.

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

3.

In addition to reiterating the various contentions urged in the petition and referring to the documents produced by the petitioner, learned counsel for the petitioner invites my attention to the impugned notification at Annexure-A in order to point out that a perusal of the said notification will indicate that the same is

3 not in conformity with the mandatory requirements/ingredients of Section 127 of the I.T. Act, no reason muchless valid or cogent have been assigned by respondent Nol.1 before passing the impugned order. It is therefore submitted that apart from other grounds, which vitiates the impugned order, the impugned order which is non-speaking, cryptic and unreasoned order without assigning any reasons, whatsoever, is illegal and arbitrary and the same deserves to be quashed.

4.

Per contra, learned counsel for the respondents would support the impugned order and would submit that there is no merit in the petition and the same is liable to be dismissed.

5.

Though several contentions have been urged by both sides in support of their respective claims, a perusal of the impugned notification will indicate that the same is not in conformity with the mandatory requirements of Section 127 of the I.T. Act, in as much as no reasons, muchless, valid or cogent reasons have been assigned by respondent No.1 in the impugned order, so as to enable

4 him to issue the impugned notification as against the petitioner. So also, no material is available on record to indicate the reasons as to why the impugned notification was issued under Section 127 of the I.T. Act. Under these circumstances, in view of the material on record including the impugned order, which indicates that the mandatory requirements/ingredients of Section 127 of the I.T. Act have not been followed/fulfilled prior to issuance of the impugned notification, I am of the considered opinion that the impugned notification deserves to be quashed.

6.

In the result, I pass the following: ORDER (i) The petition is allowed. (ii) The impugned notification No.31/Misc/Centralisation/ Pr.CIT(C)/2021-22 dated 07.07.2021 vide Annexure- A is hereby quashed; however, liberty is reserved in favour of the respondents to initiate such proceedings in accordance with law. SD/- JUDGE Bmc

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