M/S Ruchira Projects Private Limited Vs Office of the Assistant Commissioner of Income Tax

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NC: 2025:KHC:18759 WP No. 15599 of 2025

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4^TH DAY OF JUNE, 2025

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BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 15599 OF 2025 (T-IT)

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BETWEEN:

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M/S RUCHIRA PROJECTS PRIVATE LIMITED (A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT) HAVING ITS OFFICE AT NO.31, GCN ENCLAVE, FF2, 15^TH CROSS, KUNDANAHALLI, BENGALURU- 560037 REPRESENTED BY ITS DIRECTOR SRI. RAMANJULU GONIGUNTLA.

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…PETITIONER

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(BY SRI. GAUTAM SHREEDHAR BHARADWAJ.,ADVOCATE)

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Digitally signed by VANAMALA N

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Location: High Court of Karnataka

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AND:

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OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(4), CENTRAL REVENUE BUILDING, NO.1, QUEENS ROAD, BANGALORE- 560001.

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…RESPONDENT

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(BY SRI.M. DILIP., ADVOCATE)

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NC: 2025:KHC:18759 WP No. 15599 of 2025

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HC-KAR

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUITON OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED 29.03.2025 BEARING DIN AND ORDER NO. ITBA/AST/S/144/202425/1075236373(1) ISSUED BY RESPONDENT AUTHORITY FOR ASSESSMENT YEAR 2018-19 (ANNX-A); QUASH THE DEMAND ORDER DATED 29.03.2025 BEARING DIN AND NOTICE NO. ITBA/AST/S/156/202425/1075236473(1) ISSUED BY THE RESPONDENT AUTHORITY FOR ASSESSMENT YEAR 2018-19 (ANNXB).

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD

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ORAL ORDER

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The petitioner has called in question the Assessment Order dated 29.03.2025 [ Annexure-A which is for the assessment year 2023-24¹ ] under Section 144 of the Income Tax Act, 1961 [for short, ' the IT Act' ]. The Assessing Officer, in the impugned Assessment Order which has resulted in the

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1 In the prayer column the assessment year is erroneously mentioned as "the assessment year 2018-19".

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NC: 2025:KHC:18759 WP No. 15599 of 2025

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HC-KAR

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impugned demand, has observed that [i] there is repeated non-compliance and [ii] failure to substantiate revenue recognition and inventory valuation. The Assessing Officer has also observed that the petitioner relies upon judicial precedents that are not relevant.

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Sri Gautam S. Bharadwaj, the learned

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counsel for the petitioner, while arguing for a remand, submits that the petitioner, who is engaged in construction and sale of apartments, has declared income for the assessment years 2018-19 to 2023-24; and that the income declared claiming expenditure for the assessment years 2020-21, 2021-22 and 2022-23 are considered permitting allowance based on Books of Accounts but it is only for the assessment years 2018-19, 2019-20 as also 2023-24 that the Books of Accounts are rejected. The learned counsel also emphasizes that the petitioner’s earlier correspondence shows that the petitioner has

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4 - NC: 2025:KHC:18759 WP No. 15599 of 2025

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HC-KAR

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produced relevant Books of Accounts even for the subject assessment years .

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As against these submissions, Sri M.Dilip,

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the learned standing counsel for the respondents who is called upon to accept notice, submits that as is stated in paragraph 2 of the impugned assessment order, multiple opportunities have been granted with issuance of notice under Section 142(1) starting from 07.10.2024 either with no response or with a request for adjournment. However, crucially, it is undisputed that Books of Accounts filed for the assessment years 2020-21 to 2022-23 have been accepted permitting allowance for expenditure incurred in construction, and if this is so, the Assessing Officer must consider why the same must not be for the subject assessment year.

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Further, the Assessing Officer will also have to consider this question in the light of the Books of Accounts already submitted, and if not submitted,

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5 - NC: 2025:KHC:18759 WP No. 15599 of 2025

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HC-KAR

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the petitioners must be given a reasonable opportunity to submit such Books of Accounts. This opportunity must foreclose all defenses based on limitation lest it be that there is fortuitous defense based on a default. In the light of the afore, the petition must be disposed of quashing the impugned Assessment Order and the consequential Demand [Annexures-A and B] restoring the proceedings to the respondent for due consideration leaving open all questions except as aforesaid. Hence, the following:

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ORDER

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[a[ The petition is allowed quashing the impugned Assessment Order and the consequential Demand [Annexures-A and B] restoring the proceedings to the respondent.

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[b] The petitioner is reserved with liberty to make all submissions once again without any further notice before 07.07.2025, and

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