Allowed¶42

Sharadayane Laxmi Ceramics LLP v. Union of India

Karnataka HC15 Apr 2025WP/11019/2025

Case brief

AI extract

What is this about?

Income tax; Section 144 best-judgement assessment; Section 144B faceless assessment; ex parte assessment order set aside; natural justice / one more opportunity; change of e-mail ID; Assessment Year 2023-24; National E-Assessment Centre; remand for fresh consideration; writ of certiorari under Article 226; Karnataka High Court.

What did the court decide?

Assessment order (Annexure-A), Computation Sheet (Annexure-B) and demand notice (Annexure-C), all dated 05.03.2025, set aside; matter remitted to respondent No.2 for fresh consideration from the stage of reply to the Section 144 show cause notice, with liberty to the petitioner to file additional pleadings and documents. ¶42

Sharadayane Laxmi Ceramics LLP Vs Union of India — Income Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the ex parte assessment order dated 05.03.2025 passed under Section 144 read with Section 144B of the Income Tax Act, 1961 (with the consequential computation sheet and demand notice) should be quashed and the petitioner granted one more opportunity to submit a reply and contest the proceedings.

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Court's answer

Since the petitioner had not submitted any reply or documents to the Section 144 notice and the assessment proceeded ex parte, the Court adopted a justice-oriented approach and deemed it just and appropriate to grant one more opportunity to the petitioner to submit a reply along with documents.

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Ratio / Principle

The impugned assessment order at Annexure-'A' dated 05.03.2025, passed under Section 144 read with Section 144B of the Income-tax Act, together with subsequent notices/orders, was set aside.

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Key takeaways

The matter was remitted back to respondent No.2 for reconsideration afresh in accordance with law from the stage of submitting a reply to the Show Cause Notice under Section 144 of the IT Act.ratio¶47
Liberty was reserved to the petitioner to submit additional pleadings and documents, which the respondent shall consider while proceeding further in accordance with law.ratio¶48

Detailed headnote1 paragraphs

Karnataka High Court (S.R. Krishna Kumar, J.) allowed a writ petition under Article 226 filed by an LLP assessee against an ex parte assessment order dated 05.03.2025 passed under Section 144 read with Section 144B of the Income Tax Act, 1961 for Assessment Year 2023-24, along with the computation sheet and demand notice of even date. The petitioner had failed to respond to the intimations/notices and to show cause notices dated 21.01.2025 and 22.02.2025, allegedly due to a change in its e-mail ID. Adopting a justice-oriented approach, the Court set aside the assessment order, computation sheet and demand notice, remitted the matter to respondent No.2 (National E-Assessment Centre) for fresh consideration from the stage of filing a reply to the Section 144 show cause notice, and reserved liberty to the petitioner to file additional pleadings and documents.

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NC: 2025:KHC:15781 WP No. 11019 of 2025

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF APRIL, 2025

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BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 11019 OF 2025 (T-IT)

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BETWEEN:

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SHARADAYANE LAXMI CERAMICS LLP HAVING OFFICE AT 14 1 T 58/74, ESSEL TOWER, BUNTS HOSTEL ROAD, MANGALORE, MANGALORE - 575 003, KARNATAKA, INDIA REPRESENTED BY ITS AUTHORIZED SIGNATORY/MANAGING PARTNER MR. BANTWAL RAGHUNATH SOMAYAJI.

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…PETITIONER

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(BY SRI. ANISH ACHARYA, ADVOCATE)

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AND:

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Digitally signed by CHANDANA B M Location: High Court of Karnataka

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UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NORTH BLOCK, NEW DEHLI- 110 001 REPRESENTED BY ITS SECRETARY.

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ADDITIONAL / JOINT / DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX INCOME-TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, DELHI-110 001.

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…RESPONDENTS

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(BY SRI. M. DILIP, ADVOCATE)

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THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING ASSESSMENT ORDER PASSED BY THE RESPONDENT DATED 05.03.2025 BEARING DIN NO. ITBA/AST/S/144/2024-25/1074038338(1) UNDER

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NC: 2025:KHC:15781 WP No. 11019 of 2025

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SECTION 144 READ WITH SECTION 144B OF THE INCOME TAX ACT, 1961 AT ANNEXURE -A AND ETC.,

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORD WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

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ORAL ORDER

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In this petition, petitioner seeks the following reliefs:

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" (a) Issue a writ of certiorari quashing Assessment order passed by the respondent dated 05.03.2025, bearing DIN No.ITBA/AST/S/144/2024-25/1074038338(1) under Section 144 read with Section 144B of the Income Tax Act, 1961 at Annexure-A.

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(b) Consequently, issue a writ of certiorari or appropriate order quashing Computation sheet dated 05.03.2025, bearing No.ITBA/AST/S/523/2024-25 /1074038450(1) under Section 144 of the Income Tax Act, 1961 at Annexure-B.

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(c) And issue a writ of certiorari or appropriate order quashing the notice of demand dated 05.03.2025, bearing DIN No.ITBA/AST/S/156/2024-25/1074038492(1) under Section 156 of the Income Tax Act, 1961 issued by the respondent at Annexure-C.

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(d) Grant such other or further orders as this Hon'ble Court may deems fit and proper under the facts and circumstances of the case, in the interests of justice and equity."

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2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

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3 - NC: 2025:KHC:15781 WP No. 11019 of 2025

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A perusal of the material on record will indicate that,

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pursuant to intimations, letters, notices etc., issued by the respondent to the petitioner in relation to the Assessment Year 2023-24, the petitioner did not submit any reply, The respondent issued show cause notices dated 21.01.2025 and 22.02.2025 under Section 144 of the Income-tax Act, 1961, to which also the petitioner did not submit any reply nor contested the proceedings, which culminated into ex parte impugned order, which has been assailed in this petition.

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Learned counsel for the petitioner submits that due to change in the e-mail ID of the petitioner, the petitioner did not receive the aforesaid intimations, letters, notices etc., and as such, the petitioner was not in a position to contest the proceedings and if one more opportunity is provided by setting aside the impugned Assessment Order at Annexure-A dated 05.03.2025, the petitioner will file a reply and contest the proceedings in accordance with law.

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Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

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NC: 2025:KHC:15781 WP No. 11019 of 2025

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A perusal of the material on record will indicate that it is an

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undisputed fact that petitioner has not submitted reply / response along with documents to Section 144 notice, which culminated in the impugned ex parte Assessment Order without the petitioner contesting the proceedings. Under these circumstances, by adopting justice oriented approach and in order to provide one more opportunity to the petitioner to submit the reply and contest the proceedings, I deem it just and appropriate to grant one more opportunity to the petitioner to submit reply along with documents,

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by setting aside the impugned order at Annexure-`A' dated 05.03.2025, passed under Section 144 read with Section 144B of the Income-tax Act, and subsequent notice / orders, etc., and remitting the matter back to respondent No.2 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 144 notice and to proceed further in accordance with law.

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In the result, pass the following:

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ORDER

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(i) The Petition is hereby allowed .

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(ii) Impugned order at Annexure-A, dated 05.03.2025, Computation Sheet dated 05.03.2025 at

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5 - NC: 2025:KHC:15781 WP No. 11019 of 2025

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Annexure-B and the demand notice dated 05.03.2025 at

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Annexure-C, are hereby set aside.

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(iii) Matter is remitted back to respondent No.2 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 144 of the IT Act,

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(iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the respondent, who shall consider the same and proceed further in accordance with law.

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Sd/(S.R.KRISHNA KUMAR) JUDGE

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BK List No.: 1 Sl No.: 25

Sharadayane Laxmi Ceramics LLP v. Union of India

Case brief

What is this about?

What did the court decide?

Sharadayane Laxmi Ceramics LLP v. Union of India

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

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