Wp/23728/2024 Of Mr. Narayanasetty Srinivasa v. Income Tax Officer

Digitallysigned byLEELAVATHIS RLocation:High Courtof Karnataka IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR -WRIT PETITION NO. 23728 OF 2024 (TIT) BETWEEN: MR. NARAYANASETTY SRINIVASA, SON OF LATE NARAYANA SETTY, AGED ABOUT 64 YEARS, RESIDING AT NO.296, 16 CROSS, SADASHIVANAGAR, BENGALURU 560 080. …PETITIONER (BY SRI. ALOKE MADAPPA, ADVOCATE) AND: 1. INCOME TAX OFFICER, WARD 6 (2)(2), INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. WARD 6 (2)(2), INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6(2)(1),INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. 3. NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2 FLOOR, E RAMP, JAWARHARLAL NEHRU STADIUM, DELHI 110 003. REP BY ADDITIONAL/JOINT/DEPUTY/ ASST. COMMISSIONER OF INCOME TAX. JAWARHARLAL NEHRU STADIUM, DELHI 110 003. REP BY ADDITIONAL/JOINT/DEPUTY/ ASST. COMMISSIONER OF INCOME TAX. 4. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(3) BLR, CENTRAL REVENUE BUILDING, CENTRAL CIRCLE 1(3) BLR, CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU 560 001. …RESPONDENTS (BY SRI.M. DILIP, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED SHOW CAUSE NOTICE DTD. 24.12.2018 BEARING NO. ITBA/AST/F/143(3) (SCN)/20/18-19/1014554659(1) ISSUED BY THE R-2 (ANNX-A) AND ETC., THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM:HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “i) Quash the impugned Show Cause Notice dated. 24.12.2018 bearing No.ITBA/AST/F/143(3) (SCN)/20/18-19/1014554659(1) issued by the 2[nd] Respondent (ANNXURE-A). ii) Quash the impugned Notice issued under Section 274 read with Section 271 (1)(c) dated 29.12.2018 bearing No. ITBA/PNL/S/271(1)(c)/2018-19/1014661568(1) issued by the 2[nd]Respondent (ANNEXURE-B). iii) Quash the impugned Notice issued under Section 274 read with Section 271 (1)(c) dated 30.12.2018 bearing No. ITBA/PNL/S/271(1)(c)/2019-20/1016294781(1) issued by the 2[nd]Respondent (ANNEXURE-C). iv) Quash the impugned Assessment Order bearing No. ITBA/AST/S/143(3)/2018-19/1014661559(1) (ANNEXURE-D) along with Computation sheet bearing No. ITBA/AST/S/114/2018-19/1014661564(1) both dated 30.12.2018 (ANNEXURE-D1) both passed by the 2[nd] Respondent. v) Quash the impugned Notice of Demand under Section 156 dated 30.12.2018 bearing No. ITBA/AST/S/156/2018- 19/1014661565(1) issued by the 2[nd] Respondent (ANNEXURE- D2). vi) Quash the impugned Show Cause Notice for Penalty dated 17.01.2022 under Section 271(10(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)(c)/2021-22/1038779328(1) issued by the 3[rd] Respondent (ANNEXURE- E). vii) Quash the impugned Notice for Penalty dated 22.08.2022 under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)(C)/2022-23/1044843934(1) issued by the 4[th] Respondent (ANNEXURE--F). viii) quash the impugned Notice for Penalty dated 22.08.2022 under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)9C)/2022-23/1044847719(1) issued by the 4[th] Respondent (ANNEXURE--G). ix) Pass such other or further order as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity.” 2. Heard learned counsel for the parties and perused the material on record. 3. In addition to reiterating various contentions urged in the E). vii) Quash the impugned Notice for Penalty dated 22.08.2022 under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)(C)/2022-23/1044843934(1) issued by the 4[th] Respondent (ANNEXURE--F). viii) quash the impugned Notice for Penalty dated 22.08.2022 under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 bearing No. ITBA/PNL/F/271(1)9C)/2022-23/1044847719(1) issued by the 4[th] Respondent (ANNEXURE--G). ix) Pass such other or further order as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity.” 2. Heard learned counsel for the parties and perused the material on record. 3. In addition to reiterating various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned order in order to point out that apart from the fact that the same is un-reasoned and non-speaking order, the details as regards how and when the show cause notice dated 24.12.2018 under Section 143(2) of the Income Tax Act, 1961 (for short, ‘the I.T.Act’) was allegedly served upon the petitioner are conspicuously absent in the impugned order and the 2[nd] respondent has proceeded to pass the impugned assessment order without providing sufficient and reasonable opportunity to the petitioner to submit his reply along with the documents, thereby violating principles of natural justice and as such, the petitioner is before this Court by way of present petition. 3.1 Learned counsel for the petitioner submits that he would unconditionally withdraw the appeal filed by him before the appellate authority in relation to the impugned order. The said submission is placed on record. 4. Per contra, learned counsel for the respondents-revenue submits that there is no merit in the petition and that the same is liable to be dismissed. 5. A perusal of the impugned order will indicate that the 2[nd]respondent has not stated the details as to the service of notice upon the petitioner or as to whether the same was uploaded on the portal or sent to the registered e-mail ID of the petitioner. In paragraph-3 of the impugned assessment order, except stating that the show cause notice under Section 143(2) of the I.T. Act was issued to the petitioner, the 2[nd] respondent has not stated as to when the said notice was delivered/served upon the petitioner. Under these circumstances, I am of the considered opinion that the impugned notices, proceedings culminating in the impugned assessment order cannot be said to have been done after providing sufficient and reasonable opportunity to the petitioner, thereby violating the principles of natural justice and consequently, the impugned order deserves to be set aside by adopting justice oriented approach and to provide one more opportunity to the petitioner to submit his reply to the said notice issued under Section 143(2) of the I.T.Act and with a direction to the respondents to proceed further in accordance with law. However, it is to be stated that since indulgence is being shown in favour of the petitioner after a lapse of almost six years from the date of the impugned order, in the event, the 2[nd] respondent passes an order against the petitioner after remand by virtue of this order, the 2[nd]respondent would be entitled to claim interest on the amount in terms of the Notice of Demand at Annexure-D2 dated 30.12.2018. 6. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned assessment order at Annexure-D dated 30.12.2018 passed by the 2[nd] respondent is hereby set aside. (iii) The matter is remitted back to the *4[th] respondent for reconsideration afresh in accordance with law. (iv) Liberty is reserved in favour of the petitioner to submit his response/reply along with the documents to the *4[th] respondent, who shall consider the same and proceed further in accordance with law. 6. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned assessment order at Annexure-D dated 30.12.2018 passed by the 2[nd] respondent is hereby set aside. (iii) The matter is remitted back to the *4[th] respondent for reconsideration afresh in accordance with law. (iv) Liberty is reserved in favour of the petitioner to submit his response/reply along with the documents to the *4[th] respondent, who shall consider the same and proceed further in accordance with law. (v) In the event, the *4[th] respondent does not accept the response/reply of the petitioner and passes an order against the petitioner, the *4[th] respondent would be entitled to claim interest on the amount in terms of the Notice of Demand at Annexure-D2 dated 30.12.2018. Sd/- (S.R.KRISHNA KUMAR) JUDGE Srl. *Corrected vide court order dated 17.01.2025.