M/S KOTHARI METALS vs. INCOME TAX OFFICER

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WP/7935/2015HC KarnatakaKAHC01019019201518 August 2015Bench: RAM MOHAN REDDY4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the reassessment proceedings were illegal and unsustainable due to a violation of the principles of natural justice. The petitioner was not provided with the statements forming the basis of the reassessment notice, nor was an opportunity for hearing granted.

What were the facts?

The Income Tax Officer reopened the assessment of the petitioner for AY 2008-09 based on statements from certain individuals regarding payments made to the petitioner. The petitioner alleges that the reassessment order was passed without providing an opportunity to be heard or access to these statements.

What were the issues?

Whether the reassessment order passed without providing the petitioner with the basis of the reopening and an opportunity of hearing violates principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 18TH DAY OF AUGUST, 2015

BEFORE

THE HON'BLE MR. JUSTICE RAM MOHAN REDDY

WRIT PETITION NO. 7935 OF 2015 (T-IT)

BETWEEN:

M/S KOTHARI METALS OMKAR HOUSE, NO.8/1, 4TH CROSS, KALASIPALYAM NEW EXTENSION, BANGALORE-560 002.

REPRESENTED BY ITS PROPRIETOR MR.SURESH KUMAR KOTHARI S/O SHA POONAMCHAND GALBAJI AGED ABOUT 40 YEARS. ... PETITIONER

(By Sri. HARISH V.S., ADV.,)

AND

INCOME TAX OFFICER WARD 1(4), NO.59, HMT BHAVAN, 6TH FLOOR, BELLARY ROAD, BANGALORE-560 032. ... RESPONDENT

(By Sri. JEEVAN J. NEERALGI, ADV.,)

2 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 U/S 143[3] R.W. SECTION 147 OF THE INCOME TAX ACT 1961 DATED 31.10.2014 FOR THE ASSESSMENT YEAR 2008-09 VIDE ANN-B AND CONSEQUENTIAL NOTICE OF DEMAND ISSUED BY THE RESPONDENT DATED 31.10.2014 FOR THE ASSESSMENT YEAR 2008-09 i.e. ANN-C & ETC.,

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

According to learned counsel for petitioner, having filed return of income for the assessment year 2008-2009, though accepted, the assessing authority reopened the assessment by issuing notice under Section 148 of the Income Tax Act (for short the ‘Act’), on the premise that certain persons made statements of certain monies having been paid to the petitioner which were not accounted for in their return for the said assessment year. It is the allegation of the petitioner that proceeding of re-assessment order when concluded

3 and passed was without extending an opportunity of hearing to the petitioner over the alleged statements made by certain persons. The allegation is not seriously controverted by the Revenue.

3.

Undoubtedly, violation of principles of natural justice is palpable since a copy of the statement of person the basis for the notice under Section 148 of the Act, is not made available to the petitioner.

4.

Suffice it to state that the proceeding culminating in the reassessment order, impugned, without notice to the petitioner over the statement of certain persons, is illegal and cannot be sustained.

5.

Petition is accordingly allowed. Impugned reassessment order is quashed. Liberty is reserved to the assessing authority to issue notice to the petitioner, furnish copies of the statements, the basis of such notices, and extend reasonable opportunity of hearing

4 to the petitioner and thereafterwarads pass orders in accordance with law. Since parties are represented by learned counsel, are directed to be present before the assessing officer on 10th September 2015 at 3.00 p.m. without further notice.

Sd/- JUDGE

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