M/S Elegant Builders And Developers vs Deputy Commissioner Of Income Tax
2024 Latest Caselaw 22337 Kant

Karnataka High Court

M/S Elegant Builders And Developers vs Deputy Commissioner Of Income Tax on 3 September, 2024

Author: S.R.Krishna Kumar

Bench: S.R.Krishna Kumar

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                                                             WP No. 23042 of 2024




                             IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                               DATED THIS THE 3RD DAY OF SEPTEMBER, 2024

                                                BEFORE
                               THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
                                  WRIT PETITION No. 23042 OF 2024 (T-IT)
                      BETWEEN:

                           M/S ELEGANT BUILDERS AND DEVELOPERS
                           A PARTNERSHIP FIRM REPRESENTED HEREIN
                           BY ITS PARTNER, MR.M. SUBRAMANI
                           S/O OF MR. MOTHULU, AGED ABOUT 62 YEARS
                           (SENIOR CITIZENS BENEFIT NOT CLAIMED)

                           HAVING OFFICE AT No.34
                           10TH B MAIN, 3RD BLOCK,
                           JAYANAGAR III BLOCK, S.O.,
                           BANGALORE - 560 011.
                           (UNDER REGISTERED INDIAN
                           PARTNERSHIP ACT, 1932).
                                                                    ...PETITIONER
                      (BY SRI. SANDEEP HUILGOL, ADVOCATE)

                      AND:

                      1.   DEPUTY COMMISSIONER OF INCOME TAX
Digitally signed by        CIRCLE 7(1) (1), BANGALORE
REKHA R
Location: High             BMTC BUILDING, 80 FT ROAD,
Court of Karnataka
                           6TH BLOCK, KORAMANGALA
                           BENGALURU - 560 095.

                      2.   ASSISTANT COMMISSIONER OF INCOME TAX
                           CIRCLE 7(2)(1), BANGALORE
                           BMTC BUILDING, 80 FT ROAD
                           6TH BLOCK, KORAMANGALA
                           BENGALURU - 560 095.

                      3.   COMMISSIONER OF INCOME -TAX (APPEALS)
                           NATIONAL FACELESS APPEAL CENTRE
                           INCOME TAX DEPARTMENT
                           ROOM No.245-A, NORTH BLOCK
                           NEW DELHI -110 001.
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                                                  NC: 2024:KHC:35732
                                               WP No. 23042 of 2024




4.   PRINCIPAL COMMISSIONER
     OF INCOME TAX-2, BENGALURU
     BMTC BUILDING, 80 FT ROAD
     6TH BLOCK, KORAMANGALA
     BENGALURU - 560 095.
                                                      ...RESPONDENTS

(BY SRI E I SANMATHI, ADVOCATE)

      THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE
IMPUGNED BANK ATTACHMENT NOTICE DATED 28.06.2024
BEARING      DIN    AND    LETTER     No.ITBA/COM/F/17/2024-
                                   ST
25/1066172554(1) ISSUED BY THE 1      RESPONDENT UNDER
SECTION 226(3) OF THE INCOME-TAX ACT, 1961 TO BANK OF
BARODA (ANNEXURE-A1) AND ETC.,

    THIS PETITION COMING ON FOR ORDERS 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) Quashing the impugned bank Attachment notice dated 28.06.2024 bearing din and letter No. ITBA/COM/F/17/2024-25/1066172554(1) issued by the 1st respondent under Section 226(3) of the Income-tax Act, 1961 to Bank of Baroda (Annexure-'a-

1');

(ii) Quashing the impugned bank Attachment notice dated 28.06.2024 bearing ITBA/COM/F/17/2024- 25/1066172256(1) issued by the 1st respondent under the Income-tax Act, 1961 to State Bank of India (Annexure-A2);

(iii) Quashing the impugned bank Attachment notice dated 28.06.2024 bearing ITBA/COM/F/17/2024-

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25/1066170945(1) issued by the 1st respondent under Section 226(3) of the Income-Tax Act, 1961 to Canara Bank (Annexure-'A-3');

(iv) Quashing the impugned Bank Attachment notice dated 28.06.2024 bearing ITBA/COM/F/17/2024- 25/1066170650(1) issued by the 1st respondent under Section 226(3) of the Income-Tax Act, 1961 to Canara Bank (Annexure-A4);

(v) Quashing the impugned Assessment order dated 22.12.2018 bearing order No. ITBA/AST/S/143(3)/2018- 19/1014493407(1) passed by the 2nd respondent under Section 143(3) of the Income-Tax Act, 1961 for the assessment year 2016- 17 (Annexure 'S-1');

(vi) Quashing the impugned computation sheet dated 22.12.2018 bearing Document No. ITBA/AST/S/115/2018- 19/1014493422(1) issued by the 2nd respondent for the Assessment year 2016-17 (Annexure 'S-2');

(vii) Quashing the impugned notice of demand dated 22.12.2018 bearing notice No. ITBA/AST/S/156/2018- 19/1014493431(1) issued by the 2nd respondent for the Assessment year 2016-17 (Annexure 'S-3');

(viii) Quashing the impugned show cause notice for penalty dated 22.12.2018 bearing notice No. ITBA/PNL/S/271(1)(c)/2018-19/1014493437(1)issued by Respondent No. 2 under Section 274 read with section 271(1)(c) of the Income-Tax Act, 1961 for the Assessment year 2016-17 (Annexure-V);

(ix) In the alternative to the paras (v) to (vii) above, permitting the Petitioner to file an appeal against impugned assessment order dated 22.12.2018 bearing order no. itba/ast/s/143(3)/2018- 19/1014493407(1) passed by the 2nd Respondent under section 143(3) of the Income- Tax Act, 1961 for the Assessment year 2016-17 (Annexure 'S-1') before respondent No.3 or the concerned appellate authority, and directing the said first appellate authority to

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consider the appeal on merits without raising the issue of limitation, and to then dispose off the said appeal at the earliest and in accordance with law; and

(x) Pass such order or further orders 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 petitioner and learned

counsel for the respondents and perused the material on record.

3. A perusal of the material on record will indicate that

subsequent to the petitioner submitting his response on 10.12.2018

to the notice dated 29.10.2018 issued by respondent No.1, the

petitioner was not subsequently notified about the proceedings and

could not address the same, which culminated in the impugned

assessment order dated 22.12.2018. It is the specific contention of

the petitioner that it was not aware of the aforesaid impugned

assessment order till there was an attachment of his Bank

accounts on 28.06.2024, pursuant to which the petitioner is before

this Court by way of the present petition

4. It is submitted that apart from the fact that the

impugned assessment order is an exparte assessment order,

which was passed in violation of the principles of natural justice

and without providing sufficient and reasonable opportunity to the

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petitioner, the impugned assessment order is neither digitally

signed nor physically signed nor the same is served on the

petitioner and in the light of the judgment of this Court in the case

of Begur Sinappa Venkatesh Vs. The Income Tax Officer and

another passed in W.P.No.20807/2023, which was followed by this

Court in the case of Sri.Narayanappa Gangadhar Vs. Income

Tax Officer and Ors, the aforesaid impugned assessment order is

illegal and the same deserves to be set aside. It is submitted that it

is necessary to provide one more opportunity to the petitioner by

setting aside the impugned assessment order and remitting back

the matter to respondent No.1 for reconsideration afresh in

accordance with law.

5. Per contra, learned counsel for respondent No.1 would

support the impugned order and submit that notices were uploaded

by the respondent in e-portal and the petitioner was aware of the

same and also submits that there is no merit in the petition and the

same is liable to be dismissed.

6. A perusal of the impugned assessment order dated

22.12.2018 will indicate that apart from the fact that the same is

neither digitally signed nor physically signed, the same is

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undisputedly exparte assessment order, which is passed without

petitioner contesting in the proceedings.

7. Under these circumstances, without expressing any

opinion on the merits/demerits of the rival contentions, I deem it

just and appropriate to set aside the impugned assessment order

and consequential proceedings, orders, notices, etc., and remit the

matter back to respondent No.1 for reconsideration afresh in

accordance with law.

8. In the result, I pass the following:

      (i)    The petition is hereby allowed.


      (ii)   The       impugned         Assessment         Order     at

Annexure - S1 dated 22.12.2018, Computation Sheet

at Annexure - S2 dated 22.12.2018, Notice of Demand

at Annexure - S3 dated 22.12.2018, Show Cause

Notice for Penalty at Annexure - V dated 22.12.2018,

Bank Attachment Notice at Annexure - A1 dated

28.06.2024, Bank Attachment Notice at Annexure - A2

dated 28.06.2024, Bank Attachment Notice at

Annexure - A3 dated 28.06.2024 and Bank Attachment

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Notice at Annexure - A4 dated 28.06.2024 are hereby

quashed.

(iii) The matter is remitted back to respondent No.1 for

reconsideration afresh in accordance with law.

(iv) Liberty is reserved in favour of the petitioner to submit

replies, responses, pleadings, documents, etc., to the

respondent, who shall consider the same by providing

sufficient and reasonable opportunity to the petitioner

and proceed further in accordance with law.

(v) Petitioner is directed to deposit Rs.50 Lakhs before

respondent No.1 within a period of four weeks from

today; It is needless to state that the amount deposited

by the petitioner would be subject to the final outcome

of the proceedings before respondent No.1.

Sd/-

(S.R.KRISHNA KUMAR) JUDGE

MDS