Nc: 2023:Khc:24398Wp v. Abhisarbuildwell Private Limited - 2023 Scc Online Sc 481

Digitally signedby VIDYA G RLocation: HighCourt ofKarnataka -1- NC: 2023:KHC:24398WP No. 10632 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 13 DAY OF JULY, 2023 BEFORE. THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV|(WRIT PETITION NO. 10632 OF 2023 (TIT) BETWEEN: 1.SRI. S S SATHYAMURTHY (HUF) S/O S.N. SHIVASHANKAR, AGED 55 YEARS,R/AT NO.11, 1 CROSS,2 STAGE, NEAR SHANKARMUTT,BASAVESHWARANAGAR, BENGALORE-560 079.REP. BY ITS KARTHA|SRI.S.S. SATHYAMURTHY —_ PETITIONER (BY SRI. ARAVIND V CHAVAN., ADVOCATE) AND: 1.ASSISTANT COMMISSIONER OF INCOME TAX.CENTRAL CIRCLE-2(1),C.R.BUILDING,|QUEENS ROAD,|BANGALORE-560 OOL. 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 220)AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TQ)QUASH THE PENALTY ORDER DATED 26.09.2022 BEARING|NO.ITBA/PNL/F/2 70A/2022-23/1045977950(1) ANNEXURE-H2 -).- FOR THE ASSESSMENT YEAR 2017-18 PASSED BY THE R3 ANDQUASH THE ASSESSMENT ORDER DATED 18.03.2022 BEARING|NO. ITBA/AST/M/153C/2021-22/1041017600(1) ANNEXURE-CFOR THE ASSESSMENT YEAR 201/7-18 PASSED BY THE R3 ANDETC. THIS WRIT PETITION COMING ON FOR ORDERS, THISDAY, THE COURT MADE THE FOLLOWING: ORDER Sri M. Dilip, learned counsel accepts notice for therespondents. 2.|Tne petitioner has challenged the Penalty Orderat Annexure-H2 dated 26.09.2022 for the Assessment|Year 2017-2018 and has also sought for setting aside ofthe Assessment Order at Annexure-C dated 18.03.7027. 3.|It is the contention of learned counsel! for thepetitioner that the impugned order 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, -3- NC: 2023:KHC:24398WP No. 10632 of 2023 the opportunity of hearing as is provided for under Section143(3) of the Act was not given. It is also contended that|the Authority had no jurisdiction to invoke Section 153C ofthe Act. 4 iIt is pointed out that for the purpose of|Initiatingproceedings,there.MUST.de|recoveryOT 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 v. AbhisarBuildwell Private Limited - 2023 SCC Online SC 481 5.|Admittedly,there|has|beenviolation.ofprinciples 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 of -4.- the Act with reference to the law laid down by the Apex.Court in the caseot |Abhisar Buildwell (supra) 6.|The Penalty Order at Annexure--H2' and theAssessment Order at Annexure-'C’ in Writ Petition are set! aside. The Authority to reconsider the matter in light ofthe discussion made above. The respondent is directed tofix a date for hearing and afford an opportunity of personalhearing aS mandated under law as noticed above and pass|orders afresh. Writ petition Isallowedaccordingly. Sd/-— JUDGE|