Wp/4407/2022 Of Kamalakshi Vividhoddesha Sahakara Sangha Ltd v. Commissioner Of Income Tax Appeals

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10 DAY OF MARCH2022 BEFORE THE HON’BLE MR.JUSTICE B.M.SHYAM PRASAD WRIT PETITION NO.4407/2022(T-IT) BETWEEN : KAMALAKSHIVIVIDHODDESHASAHAKARASANGHALTD KRISHNAPURAMUTTBUILDING OPPSANSKRITCOLLEGE UDUPITALUKANDDISTRICT-576101 REPBYITSMANAGER-MS.ASHARAO. (BY SRI.MAHESH R UPPIN., ADVOCATE) ... PETITIONER AND : 1.COMMISSIONEROFINCOMETAX(APPEALS) NATIONALFACELESSAPPEALCENTREROOMNO.356,CRBUILDING IPESTATE,NEWDELHI-110002. NATIONALFACELESSAPPEALCENTREROOMNO.356,CRBUILDING IPESTATE,NEWDELHI-110002. 2.ADDL.COMMISSIONEROFINCOMETAX NATIONALFACELESSASSESSMENTCENTREDELHI-110002. NATIONALFACELESSASSESSMENTCENTREDELHI-110002. 3.INCOMETAXOFFICER WARD1ANDTPSAAYAKARBHAVAN ADIUDUPIMALPEROAD,UDUPI-576103. WARD1ANDTPSAAYAKARBHAVAN ADIUDUPIMALPEROAD,UDUPI-576103. ... RESPONDENTS (BY SRI. JEEVAN J. NEERALGI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE PENALTY ORDER DATED 22.01.2022 PASSED BY THE R-2 IN PAN NO. MARKED AS ANNEXURE-G. THIS WRIT PETITION COMING ON FOR PRLIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Sri Mahesh R. Uppin, learned counsel for the petitioner and Sri Jeevan J.Neeralgi, learned counsel for the respondents, are heard for final disposal of the petition. The petitioner has impugned Annexure-G, an order under Section 271(1)(c) of the Income Tax Act, 1961. The learned counsel for the petitioner submits, relying upon Annexure-E [which is a show cause notice regarding penalty] that the penalty order is in the premise that the petitioner’s appeal is dismissed but it would be indisputable that the appeal is pending consideration before the appellate authority. If the appeal is pending consideration, there is no cause of action for issuance of show cause notice. Significantly, the learned counsel for the petitioner submits that the petitioner should have been extended an opportunity of personal hearing before the impugned order is passed but such opportunity is not extended. In the circumstances of the case, this Court must intervene. On behalf of the respondents, Sri Jeevan J. Neeralgi, learned counsel, submits that the penalty proceedings need not be deferred because the appeal is filed. It would always be open to the authorities to initiate penalty proceedings if there is no stay. In this case, admittedly the petitioner has not sought for stay before the Assessing Officer. Sri Jeevan J. Neeralgi, also submits that the Assessing Officer grants stay subject to deposit of a certain percentage of the demand, and if there is a case for not depositing even such amount, the appropriate remedy for the petitioner is to approach the jurisdictional Commissioner. Therefore, this Court could keep the impugned order in abeyance for a limited period with liberty to the petitioner to seek stay of the impugned demand that is pending in appeal. There is some controversy on whether there was a request for personal hearing by the petitioner. On consideration of the rival submissions, and because it cannot be said with certainty that the petitioner was granted due opportunity before the impugned order, this Court is of the considered view that there must be interference only on such limited ground. It should be open to the respondents, notwithstanding this Court’s interference with the impugned order on the ground of lack of due opportunity, to initiate fresh proceedings and conclude the proceedings after due opportunity to the petitioner. It would be needless to observe that the petitioner, in the meanwhile, could avail remedy before the Assessing Officer and before the jurisdictional Commissioner if there is reason for such initiation. For the foregoing, the petition is allowed-in-part and the impugned order dated 22.01.2022 by the Additional Commissioner of Income Tax - second respondent at Annexure –G is quashed with liberty to the authorities as aforesaid. Sd/- JUDGE SA/- Ct:sr