Karnataka High Court
M/S. Manjunatha Electricals And ... vs The Principal Commissioner Of Income ... on 18 September, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2025:KHC:37318
WP No. 28007 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 28007 OF 2025 (T-IT)
BETWEEN:
1. M/S. MANJUNATHA ELECTRICALS
AND ENGINEERS
NO.49, OLD NO.170,
1ST CROSS, 2ND STAGE,
K.K.LAYOUT, PAPAREDDY PALYA
BENGALURU,
KARNATAKA- 56079
REP BY SRI. GANGADHARA
PARTNER OF THE
M/S MANJUNATHA ELECTRICALS
AND ENGINEERS
S/O SOMAIAH,
AGED 55 YEARS
Digitally signed R/O NO.68 AND 90E,
by NAGAVENI 3RD BLOCK, 1ST STAGE,
Location: High NAGARBHAVI,
Court of
Karnataka BENGALURU- 560072
...PETITIONER
(BY SMT.JINITA CHATTERJEE, ADVOCATE)
AND:
1. THE PRINCIPAL COMMISSIONER
OF INCOME TAX
BENGALURU - 4,
5TH FLOOR, BMTC BUILDING,
80 FEET ROAD, 6TH BLOCK,
-2-
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KORAMANGALA,
BENGALURU - 560 095
2. THE NATIONAL FACELESS
ASSESSMENT UNIT,
INCOME TAX DEPARTMENT
ROOM NO-245A, NORTH BLOCK
NEW DELHI - 110 001
3. THE INCOME TAX DEPARTMENT
OFFICE OF THE INCOME TAX OFFICER
WARD 6(2) (1)
BANGALORE -560-095
...RESPONDENTS
(BY SRI.M.DILIP, ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE EX-
PARTE ASSESSMENT ORDER PASSED UNDER SECTION 147
R.W.S 144 READ WITH SECTION 144B OF THE INCOME TAX
ACT AND ACCORDINGLY ISSUED DEMAND NOTICE AND
COMPUTATION SHEET DATED 20.03.2022 FOR THE PERIOD
2017-18 VIDE DIN NO.ITBA/AST/S/147/2021-
2/1041108939(1) AS ANNEXURE-A TO A2 PASSED BY 2ND
RESPONDENT AND ETC.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
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WP No. 28007 of 2025
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CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
ORAL ORDER
The petitioner is an assessing and is before the doors of
this Court calling in question the Assessment order under
passed Section 147 r/w Section 144 r/w Section 144B of the
Income Tax Act, 1961 (for short 'the Act') in pursuant to an
ex-parte proceedings, computation sheet and demand notice
dated 20.03.2022..
2. Heard the learned counsel for the petitioner and
learned counsel for the respondents.
3. It would suffice if the narration would commence
from an ex-parte assessment order passed by respondent No.2
on 20.03.2022 and a subsequent penalty order on 23.09.2022
under Section 271B of the Act along with the demand notice
and computation sheet. It is then the petitioner is said to have
come to know of the proceedings that have been initiated
against the petitioner as the order and demand notice were
said to be received by e-mail.
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3. Learned counsel appearing for the petitioner
submits that the firm is engaged in Government Electrical
Contracts and had seized operation from 01.04.2018 due to
several constrains including financial and therefore, for the
assessment year 2017-18, the proceedings that were initiated
were never known to the petitioner and it was an ex-parte
assessment proceedings under Sections 147, 144 and 144B
followed by penalty orders under Sections 271B and 270A of
the Act and consequent recovery notice being issued against
the petitioner. Learned counsel would further take this Court to
the documents appended to the petition to demonstrate that in
the proceedings itself the Assessing Officer would indicate that
no e-mail of the petitioner was found which is indicative of the
fact that there was no proceedings that was made known to the
petitioner. The proceedings were, thus, ex-parte.
4. Learned counsel Sri M.Dillip appearing for the
respondents would vehemently refute the submission to
contend that the petitioner did received the email, but did not
chose to reply or participate in the proceedings and therefore,
indulgence should not be shown to such person, who would not
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reply to the notice or participate in the proceedings despite
complete knowledge of what is happening and only come
before this Court contending that it was in violation of principles
of natural justice.
5. Learned counsel for the petitioner would join issue
to contend that all the documents and every responsibility was
handed over to the Chartered Accountant, who has not replied
or appeared as the case would be. Learned counsel would seek
to place reliance upon the judgment rendered by the Division
Bench of High Court of Judicature at Bombay in the case of
Vijay Shrinivasrao Kulkarni (Deceased) vs. Income Tax
Appellate Tribunal and others in W.P.No.17572 of 2024.
6. The afore narrated facts are not in dispute. The
averment in the petition is that the petitioner had shut shop in
the year 2018 and was not aware of the re-assessment
proceedings being taken up for the assessment year 2017-18
and orders passed thereon. The Assessing Officer himself
notices that the email was not found. Therefore, to what email
service has been effected is still a lurking doubt. The orders
passed are now made known to the petitioner. The proceedings
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are admittedly ex-parte as the petitioner did not participate in
the proceedings. The non-participation is on account of non-
communication by the Chartered Accountant. In an identical
circumstancec, the Division Bench of High Court of Judicature
at Bombay held as follows:
"12. It was during the proceedings initiated by
the petitioner before the NFAC that various notices
under section 250 of the IT Act were issued to the
petitioner on 31 August 2022, 15 March 2023, 9 May
2023, 22 June 2023, 6 July 2023, 25 July 2023, 3
August 2023 and 4 September 2023. However, the
petitioner's Chartered Accountant ("CA" in short)
could not respond to the above notices, and sought
adjournments, mainly on the ground that a senior CA
was intended to be engaged to defend the petitioner
in the said proceedings.
13. On the aforesaid backdrop, the NFAC
proceeded to pass an ex- parte order dated 8
September 2023, rejecting the petitioner's appeal
filed before it, thereby confirming the assessment
order passed by respondent no. 2.
14. The petitioner being aggrieved by the
above, approached ITAT, Pune, by filing an appeal
dated 6 November 2023 in Form 36 under
section WP 17572-2024 - 4.02.2025.doc 253 of
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the IT Act read with rule 47(1) of the IT Rules. The
petitioner supported his case on the grounds set out
in the appeal memo.
15. The appeal filed by the petitioner was listed
for hearing on 11 March 2024 before the Division
Bench of ITAT, Pune. The petitioner's advocate
submitted that the matter was required to be
remanded to the NFAC, on the ground that the order
of the NFAC was an ex-parte order, as it was passed
in absence of a hearing being granted to the
petitioner/his representative. The petitioner's CA also
filed an affidavit in this regard. The ITAT rejected the
petitioner's prayer to remand the matter to NFAC
and insisted on hearing the appeal on merits. The
petitioner's advocate then requested for a short
adjournment, so that a paper book could be
submitted. However, such request was denied. The
petitioner's advocate then requested to the ITAT to
grant one day's time to submit such paper book and
to take up appeal for hearing on merits on the next
date. Such request was also rejected by the ITAT.
The petitioner's advocate was directed to submit
written submissions and paper book on the basis of
which, the ITAT would pass appropriate orders. The
petitioner through his legal representative
accordingly submitted written submissions, along
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with the paper book and case laws on 12 March
2024, before the ITAT.
16. It was in the above backdrop that the ITAT
proceeded to pass the impugned order dated 12
March 2024, a copy of which was received by the
petitioner on 11 October 2024 by email. The
petitioner being aggrieved by such order approached
this court by filing a writ petition dated 18 October
2024.
23. A perusal of the impugned order of the
ITAT makes it clear that it proceeded to deal with the
case of the petitioner on merits as is evident from
paragraph 5 of its order. The petitioner submitted
that considering the fact that the order impugned
before the ITAT itself was passed by respondent no.
2 was passed ex-parte, it would be just and WP
17572-2024 - 4.02.2025.doc proper for the ITAT to
remand the matter to respondent no. 2 for passing
orders on merits, after considering submissions of
the petitioner. Also, the written submissions being
tendered on behalf of the petitioner before the ITAT
on 12 March 2024 the same appear to have not
being considered in the impugned order being
passed by the Tribunal. We may refer to a judgment
of the Supreme Court in the case of Delhi Transport
Corporation v. DTC Mazdoor Union.1 The Supreme
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Court inter alia held that Article 14 guarantees a
right of hearing to a person who is adversely affected
by an administrative order. The principle of audi
alteram partem is a part of Article 14 of the
Constitution of India. In light of such decision, the
petitioner ought to have been granted an opportunity
of being heard which, partakes the characteristic of
the fundamental right under Article 14 of the
Constitution of India.
24. In the facts and circumstances of the given
case, it will be apposite to refer to a decision of the
Supreme Court in the case of Commissioner of
Income Tax Madras v. Chenniyappa Mudiliar.2 The
Supreme Court in interpreting the section 33(4) of
the Income Tax Act, 1922 has held that the appellate
tribunal was bound to give a proper decision on
question of fact as well as law, which can only be
done if the appeal is disposed off on merits and not
dismissed owing to the absence of the appellant.
There is no escape from the conclusion that under
the said provision, the appellate tribunal had to
dispose 1 AIR 1999 SC 564 2 1969 1 SCC 591 WP
17572-2024 - 4.02.2025.doc off the appeal on
merits which could not have been done by dismissing
the appeal summarily for default of appearance. The
principles laid down in the said decision would
squarely apply to the facts and circumstances of the
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present case, in as much as the petitioner was
neither heard nor were his written submissions
placed before the ITAT, considered.
\
25. In light of the above, we concur with the
submissions of Mr. Bora in regard to the setting
aside of the impugned order of the ITAT dated 12
March 2024 is concerned. We are unable to accept
the submissions of Mr. Saxena for the respondent for
the reasons noted above.
26. Considering the above discussion, we allow
this petition in terms of prayer clause (a).
27. We accordingly remand the proceedings to
the ITAT, i.e., respondent no. 1 for de novo hearing
of the petitioner's appeal filed before it. ITAT shall
after hearing the parties, pass fresh orders on merits
and in accordance with law, as expeditiously as
possible not later than within six weeks from the
date of this order made available to the ITAT.
28. Rule made absolute in the above terms. No
costs."
7. The Division Bench of High Court of Judicature at
Bombay was considering the identical circumstance of the
proceedings being ex-parte. The reason for the proceedings
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going ex-parte was a non-communication from the hands of the
Chartered Accountant. In the light, the projection of the
petitioner being similar, I deem it appropriate to grant one
opportunity to the petitioner with a direction to the petitioner to
appear before respondent No.3 and furnish reply to Section
148B notice.
8. For the aforesaid reasons, the following:
ORDER
i) Writ petition is allowed-in-part.
ii) The impugned orders at Annexures-A and B to
B2 are quashed.
iii) The matter is remitted back to the hands of
respondent No.3.
iv) The petitioner shall appear before respondent
No.3 on 26.09.2025 at 2.30 p.m.
v) On appearance, respondent No.3 shall serve
the notices under Section 148B of the Act and
grant such time to the assessee to furnish
reply and regulate the procedure thereafter in
taking the issue to its logical conclusion.
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vi) In the event, the petitioner would not avail of
the opportunity now granted by appearing on
26.09.2025, the indulgence shown would
automatically gets vanished and the orders
impugned would get revived.
Sd/-
(M.NAGAPRASANNA)
JUDGE
VM
