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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF NOVEMBER, 2019
BEFORE
THE HON’BLE MRS.JUSTICE S.SUJATHA
WRIT PETITION No.3800/2018 (T – IT)
BETWEEN :
Mr. SAWARMAL AGARWAL S/O LATE FAKIRCHAND AGARWAL AGED ABOUT 64 YEARS R/AT No.28, 4TH CROSS, LALBAGH ROAD, K.S.GARDEN BANGALORE-560027
...PETITIONER
(BY SRI PRADEEP KUMAR J., ADV. FOR SRI HARISH V.S., ADV.)
AND :
THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-7(2)(1), ROOM NO.318, 3RD FLOOR, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK KORAMANGALA, BANGALORE-560095 …RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ASSESSMENT ORDER PASSED BY THE RESPONDENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, DATED 29.12.2017 FOR THE ASSESSMENT YEAR 2015-2016 i.e., ANNEXURE-C AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESPONDENT UNDER SECTION 156 OF THE INCOME TAX ACT, 1961, DATED 29.12.2017 FOR THE ASSESSMENT YEAR 2015-2016 i.e., ANNEXURE-C1.
THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
- 2 - O R D E R
The petitioner has assailed the assessment order passed by the respondent under Section 143(3) of the Income Tax Act, 1961 (‘Act’ for short) relating to the assessment year 2015-16 and consequential notice of demand issued by the respondent under Section 156 of the Act.
The petitioner is an individual. It is submitted that during the relevant assessment year the petitioner has sold equity shares of M/s PS(IT) Infra and Services Limited, had earned long term capital gain, accordingly claimed exemption under Section 10(38) of the Act. The relevant investments were made by the petitioner way back in the year 2012 which were the shares in the DEMAT form. The said shares were sold by the petitioner in the stock exchange. The sale proceeds were received by the petitioner though banking channel. It is submitted that the Income Tax
- 3 - Department selected the cases of all those individuals across the Country who had claimed exemption under Section 10(38) of the Act. The petitioner’s case was also selected for scrutiny. Pursuant to the show cause notice issued, the petitioner has furnished all the documents/information that were sought by the respondent in addition to demonstrating that the allegation of the respondent was contrary to the petitioner’s case.
It is the contention of the petitioner that the respondent has hastily and arbitrarily concluded the assessment in violation of the principles of natural justice by failing to furnish the copy of the investigation report, sworn statements that were relied upon by the respondent. Hence, the present writ petition.
Learned counsel for the Revenue would submit that the background of investigation referred by the Assessing Officer was only to facilitate the
- 4 - assessment proceedings. Marshalling of facts for better understanding of the case would not be considered as the reliance made by the Assessing Officer to arrive at a conclusion. Indeed, all the relevant materials were made available to the assessee and adequate opportunity was provided to putforth his reply/objections with all materials. After considering the same, the order impugned has been passed. The petitioner has an efficacious, alternative remedy available under the Act. However, circumventing the same, the present writ petition is filed.
Having heard the learned counsel for the parties and perusing the material on record, this Court is of the considered view that it would be appropriate to relegate the petitioner to file an alternative and efficacious statutory remedy of appeal available under the Act since the disputed questions of facts and law involved herein cannot be adjudicated in the writ
- 5 - proceedings. Indeed, reasonable opportunity was provided to the petitioner to putforth his case. If the petitioner is aggrieved by the decision of the Assessing Officer, hierarchy of authorities provided under the Act are required to adjudicate upon the said issue. 6. Without expressing any opinion on the merits or demerits of the case, the petitioner is relegated to file the alternative remedy of appeal under the Act. If such an appeal is preferred within a period of two weeks from the date of receipt of certified copy of the order, the same shall be considered by the Appellate Authority on merits without objecting to the aspect of limitation. All rights and contentions of the parties are left open. The Appellate Authority shall decide the matter in accordance with law in an expedite manner. Writ petition stands disposed of, in terms of the above. Sd/- JUDGE Dvr: