Wp/15600/2025 Of M/S Ruchira Projects Private Limited v. Office Of The Assistant Commissioner Of Income Tax

Digitallysigned byVANAMALANLocation:High CourtofKarnataka HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4 DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD -WRIT PETITION NO. 15600 OF 2025 (TIT) BETWEEN: M/S RUCHIRA PROJECTS PRIVATE LIMITED (A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT), HAVING ITS OFFICE AT NO.31, GCN ENCLAVE, FF2, 15 CROSS, KUNDANAHALLI, BENGALURU-560037 REPRESENTED BY ITS DIRECTOR, SRI RAMANJULU GONIGUNTLA. …PETITIONER BHARADWAJ, (BY SRI. GAUTAM SHREEDHAR ADVOCATE) AND: OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(4), CENTRAL REVENUE, BUILDING, NO.1, QUEENS ROAD, BANGALORE-560001. …RESPONDENT (BY SRI.M. DILIP., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED. 29.03.2025 BEARING DIN AND ORDER NO. ITBA/AST/S/147/2024-25/1075256244(1) ISSUED BY RESPONDENT AUTHORITY FOR ASSESSMENT YEAR 2019-20 (ANNX-A).QUASH THE DEMAND ORDER DATED 29.03.2025 BEARING DIN AND NOTICE NO. ITBA/AST/S/156/2024-25/1075256352(1) ISSUED BY THE RESPONDENT HC-KAR AUTHORITY FOR ASSESSMENT YEAR 2019-20 (ANNX-B). THIS PETITION, COMING ON FOR PRELIMINAY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORAL ORDER The petitioner has called in question the Assessment Order dated 29.03.2025 [Annexure-Awhich is for the assessment year 2019-20] under Section 147 read with Section 144 of the Income Tax Act, 1961 [for short, 'the IT Act']. The Assessing Officer, in the impugned Assessment Order which has resulted in the impugned demand, has observed that [i] there is repeated non-compliance and [ii]failure to substantiate revenue recognition and inventory valuation. The Assessing Officer has also observed that the petitioner relies upon judicial precedents that are not relevant. 2.Sri Gautam S. Bharadwaj, the learned counsel for the petitioner, while arguing for a - 3 - remand, submits that the petitioner, who is engaged in construction and sale of apartments, has declared income for the assessment years 2018-19 to 2023-24; and that the income declared claiming expenditure for the assessment years 2020-21, 2021-22 and 2022-23 are considered permitting allowance based on Books of Accounts but it is only for the assessment years 2018-19, 2019-20 as also 2023-24 that the Books of Accounts are rejected. The learned counsel also emphasizes that the petitioner’s earlier correspondence shows that the petitioner has produced Books of Accounts even relevant for the subject assessment years . 3.As against these submissions, Sri M.Dilip, the learned standing counsel for the respondents who is called upon to accept notice, submits that as is stated in paragraph 4 of the impugned assessment order, multiple opportunities have been granted with issuance of notice under Section 142(1) starting from - 4 - 07.10.2024 either with no response or with a request for adjournment. However, crucially, it is undisputed that Books of Accounts filed for the assessment years 2020-21 to 2022-23 have been accepted permitting allowance for expenditure incurred in construction, and if this is so, the Assessing Officer must consider why the same must not be for the subject assessment year. Further, the Assessing Officer will also have to consider this question in the light of the Books of Accounts already submitted, and if not submitted, the petitioners must be given a reasonable opportunity to submit such Books of Accounts. This opportunity must foreclose all defenses based on limitation lest it be that there is fortuitous defense based on a default. In the light of afore, the petition must be disposed of quashing the impugned Assessment Order and the consequential Demand [Annexures-A and B] restoring the proceedings to the HC-KAR respondent for due consideration leaving open all questions except as aforesaid. Hence, the following: Further, the Assessing Officer will also have to consider this question in the light of the Books of Accounts already submitted, and if not submitted, the petitioners must be given a reasonable opportunity to submit such Books of Accounts. This opportunity must foreclose all defenses based on limitation lest it be that there is fortuitous defense based on a default. In the light of afore, the petition must be disposed of quashing the impugned Assessment Order and the consequential Demand [Annexures-A and B] restoring the proceedings to the HC-KAR respondent for due consideration leaving open all questions except as aforesaid. Hence, the following: ORDER [a[ The petition is allowed quashing the impugned Assessment Order and the consequential Demand [Annexures-A and B] restoring the proceedings to the respondent. impugned Assessment Order and the consequential Demand [Annexures-A and B] restoring the proceedings to the respondent. [b] The petitioner is reserved with liberty to make all submissions once again without any further notice before 07.07.2025, and thereafter, the respondents shall issue further notice to extend an opportunity of personal hearing and conclude the assessment proceedings. make all submissions once again without any further notice before 07.07.2025, and thereafter, the respondents shall issue further notice to extend an opportunity of personal hearing and conclude the assessment proceedings. Sd/- (B M SHYAM PRASAD) JUDGE SA ct:sr