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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 30TH DAY OF OCTOBER, 2013
BEFORE
THE HON'BLE MRS.JUSTICE B.V.NAGARATHNA
W.P.No.19282/2013(T-IT)
BETWEEN:
M/S NAPEAN TRADING & INVESTMENT COMPANY PVT. LTD., REP. BY ITS DIRECTOR, SRI.P.V.SRINIVASAN, AGED ABOUT 53 YEARS, NO.134, NEXT TO WIPRO CAMPUS, SARJAPUR ROAD, DODDAKANNELLI, BANGALORE-560 035. ... PETITIONER
(BY SRI: A.SHANKAR, ADV.)
AND:
UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001.
THE COMMISSIONER OF INCOME-TAX III, C.R.BUILDING, QUEENS ROAD, BANGALORE-560 001.
THE ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE-12, 14/3A, 4TH FLOOR, R.P.BHAVAN, NRUPATHUNGA ROAD, BANGALORE-560 001.
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THE DEPUTY COMMISSIONER OF INCOME-TAX,CIRCLE-12(2), R.P.BHAVAN, OPP. RESERVE BANK OF INDIA, NRUPATHUNGA ROAD, BANGALORE-560 001. ... RESPONDENTS
(BY SRI: E.I.SANMATHI, ADV. FOR R1, SRI.K.V.ARAVIND FOR R2,R3 & R4)
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THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A.QUASHING THE ASSESSMENT ORDER PASSED BY THE R-4 U/S 143(3) OF THE INCOME-TAX ACT 1961 DT.28.3.2013 FOR THE ASSESSMENT YEAR 2010-11 VIDE ANNX-A AND ETC.,
THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, COURT MADE THE FOLLOWING:-
O R D E R
In this writ petition, the petitioner has assailed the assessment order passed by respondent No.4 under Section 143(3) of the Income Tax Act, 1961 (herein after, referred to as the ‘Act’ for short), dated 28/03/2013, for the Assessment Year 2010-11 (Annexure “A”) and the notice of demand issued under Section 156 of the Act by respondent No.4 dated 28/03/2013 for the very same assessment year, a copy of which is produced as Annexure “B”. Though several other prayers have been sought by the petitioner including a challenge being made to the
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Explanation to Section 10(2-A) of the Act, the main grievance of the petitioner is with regard to the order at Annexure “A” being not in consonance with Section 144-A of the Act, as according to the petitioner, principles of natural justice as stated in the proviso therein have been violated.
I have heard the learned counsel for the petitioner and the learned counsel for the respondents and perused the material on record.
The order at Annexure “A” has been passed on a reference sought by the assessee. It is passed under Section 144-A of the Act. When power under Section 144- A of the Act is exercised to issue directions prior to the completion of the assessment, which directions are ultimately binding on the assessee, it is incumbent that the assessee be given an opportunity of being heard or otherwise, it would amount to violation of the principles of natural justice particularly, when the proviso to Section 144-A explicitly states that such an opportunity must be given to an assessee. In the instant case, nowhere in the impugned order is it forthcoming that such an opportunity
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was given to the assessee. On this short ground alone, the order at Annexure “A” is quashed. Consequently, notice of demand at Annexure “B” is also quashed. The matter is remanded to the competent authority under Section 144-A of the Act so as to enable the assessee to have an opportunity to have its say in the matter and thereafter, to pass fresh orders thereon. In this regard, it is noted that while the challenge to Explanation to Section 10(2-A) of the Act and other prayers are also sought, the contentions on those prayers are left open.
In the result, the writ petition is disposed of quashing Annexure “A” and “B” and remanding the matter to the competent authority under Section 144-A of the Act, to pass fresh orders after giving an opportunity to the petitioner and in accordance with law. All contentions on both sides are left open.
Sd/- JUDGE.
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