- 1 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 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. 27732 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 R/O NO.68 AND 90E, 3RD BLOCK, 1ST STAGE, NAGARBHAVI, 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, Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 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 -560095 …RESPONDENTS (BY SRI.M.DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER UNDER CLAUSE(D) OF SECTION 148A OF THE INCOME TAX ACT 1961 FOR THE AY 2018-19 DTD 31.3.2022 AS ANNX- A PASSED BY THE R-2 AND EX PARTE ASSESSMENT ORDER PASSED U/S 147 RWS 144 R/W SECTION 144B OF THE INCOME TAX ACT AND ACCORDINGLY ISSUED DEMAND NOTICE AND COMPUTATION SHEET DTD 18.03.2023 FOR THE PERIOD 2018-19 AS ANNX-B TO B2 PASSED BY THE R-2 AND ETC., THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 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 orders passed under clause (d) of Sections 148A and 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. 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 order that is passed under sub-clause (d) Section 148A of the Act for the assessment year 2018-19. Respondent No.2 passes an order on 18.03.2023 and a subsequent penalty order on 14.09.2023 under Section 272A(1)(d) 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 orders and demand notice were said to be received by e-mail. - 4 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 4. Learned counsel appearing for the petitioner submits that the firm is engaged in Government Electrical Contracts and had ceased operation from 01.04.2018 due to several constrains, including financial, and therefore, for the assessment year 2018-19, 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 272A(1)(d) and 271AAC(1) 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. 5. 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, - 5 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 indulgence should not be shown to such person, who would not 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. 6. 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. 7. 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 2018-19 and orders passed thereon. The orders passed are now made known to the petitioner. The proceedings are admittedly ex- parte as the petitioner did not participate in the proceedings. - 6 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 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 - 7 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 section WP 17572-2024 - 4.02.2025.doc 253 of 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 - 8 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 appropriate orders. The petitioner through his legal representative accordingly submitted written submissions, along 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 - 9 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 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 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 - 10 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 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 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." (Emphasis supplied) - 11 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 8. 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 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 Sections 148A and 148B notices. 9. 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 Sections 148A and 148B of the Act and grant such time to the assessee to - 12 - HC-KAR NC: 2025:KHC:37317 WP No. 27732 of 2025 furnish reply and regulate its procedure thereafter, in taking the issue to its logical conclusion. 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 vacated and the orders impugned, would get revived. Ordered accordingly. Sd/- (M.NAGAPRASANNA) JUDGE VM List No.: 1 Sl No.: 11