Case Law Details
Kabbathi Bochegowda Shivanna Vs CIT (Appeals) (Karnataka High Court)
The Karnataka High Court quashed an ex-parte Income Tax assessment order issued against Kabbathi Bochegowda Shivanna after his Chartered Accountant (CA) failed to appear before the Assessing Officer (AO) during proceedings. The petitioner argued that the assessment order, passed on March 24, 2023, was the result of his CA’s inability to present a defense, leading to an ex-parte decision. Shivanna requested the court to quash the assessment order and associated demand notice and sought a fresh opportunity to submit the required documents and contest the case. Additionally, the petitioner offered to withdraw a pending appeal and requested the court to direct the authorities to adjust any amounts already recovered under a previous notice.
In response, the court recognized the petitioner’s claim of not being able to contest the case due to unavoidable circumstances. Adopting a justice-oriented approach, the court set aside both the assessment order and the associated bank account attachment notice. It remitted the case back to the AO, granting the petitioner a chance to present his case again. The court also directed that any amount recovered from the petitioner be adjusted in the fresh proceedings. This judgment allows the petitioner to contest the assessment in accordance with the law, giving him a second chance to resolve the tax matter.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition petitioner seeks the following reliefs:
“WHEREFORE the Hon’ble Court be pleased to:-
i) Quash the Assessment Order dt:24-03-2023 bearing no. ITBA/AST/S/147/2022-23/1051280785(1) passed by the 2nd Respondent marked as ANNEXURE “A” and the Demand Notice dt:24-03-2023 bearing DIN & Notice No. ITBA/AST/S/156/2022/23-1051280855(1) issued by the 2nd Respondent marked as ANNEXURE “B” the by issuing a writ in the nature of certiorari.
OR IN THE ALTERNATIVE.
i) issue a writ in the nature of mandamus by directing the 1st Respondent to dispose off the appeal ANNEXURE “C” filed by the Petitioner in the e-portal within a period of three months and till the disposal of the said appeal, not to make any demand of income tax from the petitioner.
ii) Quash the Order dt:01-02-2024 bearing No. ITBA/COM/F/17/2023-24/1060397426(1) passed by the 3rd Respondent marked as ANNEXURE “K” by issuing a writ in the nature of certiorari;
iii) Quash the order dt:09-11-2023 bearing No. ITBA/COM/F/17/2023-24/1057826504(1) passed by the 3rd Respondent marked as ANNEXURE “H” by issuing a writ in the nature of certiorari; and
iv) grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice.”
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that he had entrusted the matter to his Chartered Accountant who was not in a position to appear before the respondent No.2 – AO and contest the proceedings on behalf of the petitioner which ultimately culminated in the impugned exparte order being passed against the petitioner. It is submitted that if one more opportunity to be given in favour of the petitioner by setting aside the impugned order and remitting back the matter to respondent No.2 afresh for consideration in accordance with law, the petitioner would submit his reply/response along with documents and contest the proceedings. It is also submitted that the appeal filed by the petitioner in Form No.35 would be unconditionally withdrawn by the petitioner. It is further submitted that necessary directions may be issued to the respondent to adjust the amount already recovered pursuant to Annexure – H dated 09.11.2023 issued under Section 226(3) of the IT Act, 1961.
4. Per contra, learned counsel for the respondents will support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed.
5. Though several contentions have been urged by both sides in support of their respective claims in the light of the specific assertion on the part of the petitioner that he could not contest the proceedings due to the matter being entrusted to the Chartered Accountant and due to bonafied reasons, unavoidable circumstances and sufficient cause, without expressing any opinion on the merits/demerits of the rival contentions, I deem it just and appropriate to adopt a justice oriented approach and in order to provide an opportunity to the petitioner, set aside the impugned order dated 24.03.2023 at Annexure – A and remit the matter back to the respondent No.2 – AO and issue further directions in this regard.
6. In the result, I pass the following:
ORDER
i) Petition is hereby allowed.
ii) The impugned order at Annexure – A and notice at Annexure – B both dated 24.03.2023, are hereby set aside.
iii) The submission made on behalf of the petitioner that he would unconditionally withdraw the appeal is hereby placed on record.
iv) The impugned notice at Annexure – H dated 09.11.2023 attaching Bank Account of the petitioner is hereby set aside subject to the condition that the amount already recovered by the respondents pursuant to Annexure – H shall be adjusted at the time of passing the fresh orders by the respondent No.2.
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