- 1 - HC-KAR NC: 2025:KHC:21934 WP No. 16156 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.16156 OF 2025 (T-IT) BETWEEN: KARNATAKA NEERAVARI NIGAM LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS OFFICE AT 4TH FLOOR, ROOM NO.1, COFFEE BOARD BUILDING, DR. B.R. AMBEDKAR VEEDHI, BENGALURU - 560 001 REPRESENTED BY ITS MANAGING DIRECTOR …PETITIONER (BY SRI. KIRAN V RON, ADVOCATE) AND: 1. THE ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001. 2. ITO WARD 4(3)(1) BMTC BUILDING, Digitally signed by CHAITHRA A Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:21934 WP No. 16156 of 2025 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560095. REP. BY INCOME TAX OFFICER …RESPONDENTS (BY SRI. M.DILIP AND E.I.SANMATHI, ADVOCATES) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE AN ORDER, DIRECTION, WRIT IN THE NATURE OF CERTIORARI, QUASHING/SETTING ASIDE THE ASSESSMENT ORDER DATED 07.03.2025 PASSED BY RESPONDENT NO.1 AT ANNEXURE-A AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The petitioner/Karnataka Neeravari Nigam Limited is assailing the Assessment Order dated 07.03.2025 passed by respondent No.1 for the Assessment Year 2023-24 and consequential Demand Notice issued under Section 156 of the - 3 - HC-KAR NC: 2025:KHC:21934 WP No. 16156 of 2025 Income Tax Act, 1961 (for short 'I.T.Act') and the Notices of Penalty issued under Section 274 of I.T.Act. 2. Heard learned counsel for the petitioner and learned counsel appearing for the respondents. Perused the grounds and the material placed on record. 3. The learned counsel for the petitioner, adverting to the reply submitted by the petitioner in response to the notice issued for the Assessment Year 2023-24, primarily contends that the impugned Assessment Order is vitiated for want of compliance with the principles of natural justice. It is submitted that the petitioner-Company was not afforded sufficient opportunity to submit a comprehensive response to the notice. The petitioner, being a Public Utility Company, engages over 1200 contractors and, due to technical and procedural constraints, was unable to upload all relevant supporting documents within the prescribed time. This, according to the petitioner, resulted in a restricted and incomplete reply being submitted in response to the show-cause notice. - 4 - HC-KAR NC: 2025:KHC:21934 WP No. 16156 of 2025 4. Learned counsel would further contend that the denial of adequate opportunity to present its case has materially prejudiced the petitioner and rendered the assessment process procedurally unfair. Consequently, it is urged that the impugned Assessment Order deserves to be quashed on this ground alone. 5. Per contra, the learned counsel appearing for the respondent-Revenue Authority submits that sufficient opportunity was afforded to the petitioner, which is evident from the documents produced along with the writ petition. It is contended that the petitioner failed to utilize the time and channels available for uploading the relevant material and now cannot turn around to allege breach of natural justice. Therefore, no case is made out for interference. 6. Having considered the rival submissions, this Court finds merit in the contentions urged on behalf of the petitioner. A perusal of the material placed on record prima facie reveals that the petitioner was constrained in uploading the full and complete reply along with all supporting documents owing to the voluminous nature of the data and the large number of - 5 - HC-KAR NC: 2025:KHC:21934 WP No. 16156 of 2025 contractors involved. This Court is mindful of the fact that the petitioner is a Public Utility Company and any assessment or demand raised against such a company has implications on public interest as well as financial discipline in handling public funds. 7. It is well settled that adherence to the principles of natural justice is foundational to any quasi-judicial adjudication. A fair and reasonable opportunity must be provided to the assessee to rebut the allegations or claims made in the show- cause notice. In the present case, the denial of a meaningful opportunity to submit a complete and comprehensive response vitiates the assessment proceedings. 8. In view of the above, this Court is of the considered opinion that the Assessment Order suffers from procedural irregularity and non-compliance with the principles of natural justice. Therefore, the impugned order cannot be sustained. ORDER i. The writ petition is allowed. - 6 - HC-KAR NC: 2025:KHC:21934 WP No. 16156 of 2025 ii. The impugned Assessment Order passed by respondent No.1 for the Assessment Year 2023-24, along with all consequential demand notices, is hereby quashed and set aside. iii. The matter is remitted to respondent No.1 for a fresh consideration in accordance with law. iv. The petitioner is granted four weeks’ time from the date of receipt of a certified copy of this order to submit a fresh and comprehensive reply to the show-cause. v. The respondent authority, on receipt of the petitioner’s objections/response, shall pass a fresh assessment order in accordance with law and after affording due opportunity to the petitioner. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE SMJ List No.: 3 Sl No.: 2