Nc: 2023:Khc:24103Wp v. Abhisar.buildwel/] Private Limited - 202.3 Scc Online Sc 4

Digitally signedby VIJAYA PLocation: HighCourt ofKarnataka -1- NC: 2023:KHC:24103WP No. 10588 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 12 DAY OF JULY, 2023 BEFORE. THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV|'WRIT PETITION NO. 10588 OF 2023 (TIT)BETWEEN: 1.SRI. SS MADHUSUDHAN (HUF) |S/O S.N.SHIVASHANKAR,AGED 49 YEARS,R/AT NO.11, 1 FLOOR,1 CROSS, KIRLOSKAR COLONY,|NEAR AVANI SHANKA MAIN,|BASAVESHWARANAGAR, BANGALORE - 560 0/9REP. BY ITS KARTHA |SRI. S.S.MADHUSUDHAN—_ PETITIONER (BY SRI. ARAVIND V CHAVAN., ADVOCATE) AND: 1.DEPUTY COMMISSIONER OF INCOME TAX.CENTRAL CIRCLE-2(1),C.R. BUILDING,QUEENS ROAD,|BANGALORE - 560 OO1.. 2.PRINCIPAL COMMISSIONER OF INCOME TAXCENTRAL CIRCLE,C.R. BUILDING,QUEENS ROAD,|BANGALORE - 560 OO1.._ RESPONDENTS| (BY SRI. M. DILIP, ADVOCATE)| -).- THIS WRIT PETITION IS’ FILED UNDER ARTICLES 276AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TOQUASH THE PENALTY ORDER DATED 26.09.22 BEARING NO.|ITBA/PNL/F/2 70A/2022-23/1045989952(1) ANNEXURE-H2 FORTHE ASSESSMENT YEAR 201/7-18 PASSED BY THE FIRSTRESPONDENT AND ETC. THIS WRIT PETITION COMING ON FOR’ PRELIMINARYHEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Petitioner has cnallenged the penalty order atAnnexure-H2 for the assessment year 2017-18 and hasalso sought for setting aside of the assessment order atAnnexure-C.. 2.It is the contention of the learned counsel forpetitioner that the impugned orders passed including the)penalty order under Section 270A of the Income Tax Act,|1961 (the Act’) is without affording mandatory hearing in|terms of the legal requirements under Section 274(1) ofthe Act and also insofar as the assessment order passedunder Section 143(3) read with Section 153C of the Act,the opportunity of hearing as is provided for under Section143(3) of the Act was not given. It is also contended that| -3- the Authority had no jurisdiction to invoke Section 153C ofthe Act. ‘3It is pointed out that for the purpose of|initiatingproceedings, there.MUST.de|recoveryOf 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 forreassessment under Sections 14/7 to 148 of the Act.Reliance is placed on the judgment in the case of.Principal Commissioner of Income Tax vs. Abhisar.Buildwel/] Private Limited - 202.3 SCC Online SC 4 4Admittedly,there hasbeen|violationofprinciples of natural justice. Accordingly, case is made out)for remanding the matter for fresh consideration whiledirecting the Authority to embark upon reconsideration|including the contentions raised regarding Section 153C ofthe Act with reference to the law laid down by the ApexCourt in the caseot |Abhisar Buildwell (supra) -4.- NC: 2023:KHC:24103WP No. 10588 of 2023 5.The penalty order at Annexure-H2 and theassessment order at Annexure-C are set aside. The'Authority to reconsider the matter in light of the discussionmade above. The respondents are 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. 6.Writ petition Isallowedaccordingly. Sd/-|JUDGE| VP|