It Is The Contention Of Sri.aravind v. Nc: 2023:Khc:26420Wp

Digitally signedby VIJAYA PLocation: HighCourt ofKarnataka IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 27 DAY OF JULY, 2023 BEFORE. THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV|'WRIT PETITION NO. 10367 OF 2023 (TIT) BETWEEN: 1.SRI.S.D NAGESHWAR (HUF) S/O. LATE S.D. DHAKTAPPA,|AGED 72 YEARS,R/AT. NO.9/1, 13 CROSS,2 MAIN ROAD, RMV 2| STAGE,|HANUMAIAH LAYOUT,SANJAYANAGAR,|BANGALORE-560 O94.REP. BY ITS KARTHA|SRI. S.D. NAGESHWAR. —_ PETITIONER (BY SRI, ARAVIND V CHAVAN., ADVOCATE) AND: 1.DEPUTY COMMISSIONER OF INCOME TAX.CIRCLE-5(2)(1),BMTC BUILDING,8O FEET ROAD,KORAMANGALA. BANGALORE-560 O95. 2.PRL. COMMISSIONER OF INCOME TAX- 5,BMTC BUILDING,8O FEET ROAD,BMTC BUILDING,8O FEET ROAD, -).- KORAMANGALA. BANGALORE-560 095, 3.DEPUTY COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-2(1),C.R. BUILDINGQUEENS ROAD,|BANGALORE-560 OO1. VAPRINCIPAL COMMISSIONER OF INCOME TAX,|CENTRAL CIRCLEC.R. BUILDINGQUEENS ROAD,|BANGALORE-560 OO1. _ RESPONDENTS| (BY SRI. M. DILIP, ADVOCATE)| THIS W.P. IS FILED UNDER ARTICLES 226 AND 22/7 OFTHE CONSTITUTION OF INDIA, PRAYING TO QUASH THEPENALTY.ORDER.DTD26.09.7027)BEARING|NO. ITBA/PNL/F/2 70A/2022-23/1045978034(1) ANNEXURE-H2 FORTHE ASSESSMENT YEAR 201/7-18 PASSED BY THE R-3 ANDETC. THIS W.P. COMING ON FOR PRELIMINARY HEARING,THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petition was dismissed for non-prosecution due| to non-compliance of office objections. 2. During the pendency of I.A.-1/2023 for recallingthe order of dismissal, the petitioner has complied the -3- office objections. Accordingly, I.A.-1/2023 is allowed andthe order of dismissal! dated 19.06.2023 is recalled and thepetition is restored to file. — 3. Sri Dilip, learned counsel accepts notice for therespondents. — 4. The Petitioner has challenged the penalty orderdated 26.09.2022 at Annexure-H2 for the assessment year2017-18 and has also sought for setting aside of theassessment order dated 10.03.2022 at Annexure-C.. 5. It is the contention of Sri.Aravind V. Chavan,learned counsel for petitioner that the impugned orders.passed including the penalty order under Section 270A of|the Income Tax Act, 1961 (‘the Act’) is without affordingmandatory hearing in terms of the legal requirements|under Section 274(1) of the Act and also insofar as theassessment order passed under Section 143(3) read with|Section 153C of the Act, the opportunity of hearing as isprovided for under Section 143(3) of the Act was not) -4.- given. It is also contended that the Authority had nojurisdiction to invoke Section 153C of the Act. 6. It is pointed out that for the purpose of initiatingproceedings, there must be recovery of incriminatory|material without which recourse cannot be had to Section.153C of the Act and that the only option available under|such circumstance would be to proceed for reassessment.under Sections 147 to 148 of the Act. Reliance is placedon the judgment in the case ofPrincipal Commissioner|of Income Tax vs. Abhisar Bujildwel] Private Limited- 20273 SCC Online SC 48 7. Admittedly, there has been violation of principlesof natural justice. Accordingly, case is made out forremanding the matter for fresh consideration while)directing the Authority to embark upon reconsideration|including the contentions raised regarding Section 153C ofthe Act with reference to the law laid down by the Apex.Court in the case of Apnisar Bulidwell (supra) -5- NC: 2023:KHC:26420WP No. 10367 of 2023 8. The penalty order at Annexure-H2 and the|assessment order at Annexure-C are set aside. The'Authority to reconsider the matter in light of the discussionmade above. The respondent is directed to fix a date for.hearing and afford an opportunity of personal hearing as)mandated under law as noticed above and pass orders)afresh. 9. Writ petition isallowedaccordingly. Sd/-| JUDGE|