HASHAM INVESTMENT AND TRADING vs. THE ADDITIONAL / JOINT/DEPUTY/

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WP/13151/2021HC KarnatakaKAHC01024578202128 October 2021Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Assessing Officer had erroneously stated that no reply was filed, despite evidence to the contrary. This violation of natural justice warranted quashing the assessment order.

What were the facts?

The petitioner sought to quash an assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act. The petitioner argued that their detailed reply to a show cause notice was not considered, leading to an unreasoned order and violation of natural justice.

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 to a show cause notice.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 156

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 28TH DAY OF OCTOBER, 2021

BEFORE

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

WRIT PETITION NO.13151/2021 (T-IT)

BETWEEN:

HASHAM INVESTMENT AND TRADING COMPANY PRIVATE LIMITED NO. 134, NEXT TO WIPRO CORPORATE OFFICE SARJAPUR ROAD, DODDAKANNELLI BENGALURU - 560035 REPRESENTED HEREIN BY ITS DIRECTOR MR. PAGALTHIVARTHI SRINIVASAN

…PETITIONER (BY SRI GANESH, SR.COUNSEL FOR SRI SANDEEP HUILGOL, ADVOCATE)

AND:

1 . THE ADDITIONAL / JOINT / DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE INCOME-TAX DEPARTMENT 2ND FLOOR, JAWAHARLAL NEHRU STADIUM NEW DELHI-110003

2 . THE ASSISTANT COMMISSIONER OF INCOME-TAX

CIRCLE 3(1)(2), BENGALURU

BMTC BUILDING, 80 FEET ROAD

6TH BLOCK, NEAR KHB GAMES VILLAGE

KORAMANGALA BENGLAURU-560095.

3 . THE PRINCIPAL COMMISSIONER/ COMMISSIONER OF INCOME-TAX, BENGALURU BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, KORAMANGALA BENGALURU 560095.

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

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER DATED 25.06.2021 PASSED BY THE R1 UNDER SECTION 143(3) R/W SECTION 144B OF THE INCOME TAX ACT, 1961 FOR ASSESSMENT YEAR 2018-19 ANNEXURE-A AND ETC.

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

ORDER In this petition, the petitioner has sought for the following reliefs: “(i) Quashing the impugned assessment order dated 25.06.2021 bearing DIN No.ITBA/AST/S/143(3)/2021-22/10336 82380(1) passed by the 1st Respondent under Section 143(3) read with Section 144B of the Income-tax Act, 1961, for assessment year 2018-19 (Annexure ‘A’);

(ii) Quashing the impugned computation sheet dated 25.06.2021 bearing DIN and Document No.ITBA/AST/S/ 186/2021-22/1033682450 (1) issued by the 1st Respondent under the provisions of the Income-tax Act, 1961, for assessment year 2018-19 (Annexure ‘A-1’);

(iii) Quashing the impugned notice of demand dated 25.06.2021 bearing DIN and Notice No.ITBA/AST/S/156/2021- 22/1033682436 (1) issued by the 1st Respondent under Section 156 of the Income-tax Act, 1961, for assessment year 2018-19 (Annexure ‘A-2’); and

(iv) Pass such order or further orders as this Hon’ble Court may deem fit in the facts

3 and circumstances of the case, and in the interests of justice and equity.”

2.

Heard Sri Ganesh, the learned Senior Counsel appearing for the petitioner, Sri K.V.Aravind, the learned counsel appearing for the respondents and perused the petition papers.

3.

In addition to reiterating the various contentions urged in the petition and referring to the documents produced by the petitioner, the learned Senior Counsel for the petitioner invites the attention of this Court to the reply at Annexure-L dated 19.04.2021 to the show cause notice at Annexure-H dated 12.04.2021, in order to point out that despite detailed reply submitted by the petitioner along with the relevant documents, the same have not been considered by the first respondent before proceeding to pass the impugned assessment order at Annexure-A dated 25.06.2021, which is not only unreasoned and non- speaking order but also without granting any opportunity of being heard to the petitioner and not considered the objections filed by the petitioner. It is

4 further submitted that no reply or response have been submitted by the petitioner to the show cause notice. Thereby the said impugned order is erroneous and in violation of principles of natural justice and deserves to be quashed.

4.

Per contra, the learned counsel appearing for the respondents vehemently contended that there is no merit in the petition particularly, when the efficacious or alternative remedy is available by way of an appeal, as such, the same is liable to be dismissed.

5.

As rightly contended by the learned Senior Counsel for the petitioner and on perusal of the reply at Annexure-L to the show cause notice will indicate that the petitioner has submitted the detailed reply along with the relevant documents together with the acknowledgment of the receipt of the said reply which has been completely ignored by the first respondent at paragraph 2 of the impugned assessment order wherein he has proceeded to pass the impugned order erroneously contending that no reply or response was

5 filed or submitted by the petitioner. Under this circumstance, despite availability of an alternative remedy by way of an appeal to the petitioner, since the first respondent has violated the principles of natural justice, I am of the considered opinion that the impugned assessment order deserves to be quashed and the matter may be remitted back to the first respondent for consideration afresh after providing sufficient and reasonable opportunity to the petitioner and granting him personal hearing in accordance with law. In the result, I pass the following: ORDER (i) The petition is allowed; (ii) The Assessment Order at Annexure-A dated 25.06.2021 is hereby quashed; (iii) The matter is remitted back to the first respondent for reconsideration afresh after providing an opportunity to the petitioner and after granting him personal hearing and thereafter proceed in accordance with law after considering

6 the objections and documents submitted by the petitioner along with the reply to the show cause notice; (iv) Liberty is reserved in favour of the petitioner to submit additional reply and additional documents in support of his claim; (v) Consequent upon quashment of Annexure-A, the impugned computation sheet at Annexure-A1 dated 25.06.2021 and Demand Notice at Annexure-A2 dated 25.06.2021 are also hereby quashed.

Subject to the above directions, the petition is allowed.

Sd/- JUDGE

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