What did the High Court hold?

The High Court found that the assessment order was based on a mistaken belief that the petitioner had not provided an explanation, when in fact, a reply had been filed. The court also noted a violation of natural justice and non-application of mind.

The petitioner, a company, filed a writ petition challenging an assessment order and a consequent notice issued by the Deputy Commissioner of Income Tax. The petitioner contended that the assessment order was passed on a wrong factual premise.

What were the issues?

Whether the assessment order was passed on a correct factual basis and whether principles of natural justice were violated.

M/S Ilms Builders Pvt Ltd vs Deuty Commissioner of Income Tax | Karnataka High Court 2020

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 28TH DAY OF JANUARY, 2020

BEFORE

THE HON’BLE MR. JUSTICE KRISHNA S.DIXIT

WRIT PETITION NO.4303 OF 2018 (T-IT)

BETWEEN: M/S. ILMS BUILDERS PVT. LTD., NO.103, EDEN PARK NO.20, VITTAL MALLYA ROAD, BENGALURU – 560 001. REPRESENTED BY ITS DIRECTOR

... PETITIONER

(BY MS. SWATHI ASHOK & SMT. ANURADHA S.R., ADVOCATES)

AND:

1 . DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1) BENGALURU - 560 001.

2 . GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT 7TH FLOR, INCOME TAX OFFICE, BMTC BUILDING, 8O FEET ROAD, KORAMANGALA, BENGALURU - 560 001. REPRESENTED BY ITS COMMISSIONER

... RESPONDENTS (BY SRI. K.V.ARAVIND, ADVOCATE FOR R1 & R2)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER PASSED BY THE 1ST RESPONDENT DATED 22.12.2017 FOR THE ASSESSMENT YEAR 2015-16 (ANNEXURE-A); AND ETC.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

Petitioner-Company being the assessee under the Income Tax Act, 1961 is invoking the writ jurisdiction of this Court grieving against the Assessment Order dated 22.12.2017, a copy whereof is at Annexure-A covering the assessment year 2015-16 and the consequent Notice dated 22.12.2017, a copy whereof is at Annexure-B, both issued by the first respondent.

After service of notice, the respondents having entered appearance through their Senior Panel Counsel Sri. K.V.Aravind, resist the writ petition making submission in justification of impugned order and the notice.

Having heard the learned counsel for the parties and having perused the petition papers, this Court is of a considered opinion that, reprieve needs to be granted to the petitioner as under and for the following reasons:

a) the impugned order at Annexure-A proceeds on the wrong factual premise that the petitioner had not sent explanation to the notice in question when the original

3 records admittedly reveal that the petitioner had filed one vide Reply dated 20.12.2017, a copy whereof is at Annexure-G; and, b) the contention that petitioner has an alternate remedy of statutory appeal and therefore, no relief can be granted in the writ petition cannot be accepted since there is an apparent violation of principles of natural justice apart from demonstrable non-application of mind to the material borne out from the record.

In the above circumstances, this writ petition succeeds; the writ of certiorari issues quashing the impugned order; matter is remitted to the first respondent for consideration afresh after adverting to the reply sent by the petitioner, in accordance with law.

The period for compliance is three months from the date a copy of this judgment is received by the first respondent.

No costs, now.

Sd/-

JUDGE

M/S ILMS BUILDERS PVT LTD vs. DEUTY COMMISSIONER OF INCOME TAX

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