Temple Authority’s Income Tax Appeal Dismissed without Adjudication: Karnataka HC Quashes Assessment & Attachment Notices [Read Order]

The Karnataka HighCourt recently granted relief to a temple authority, and set aside an income tax assessment order and consequent attachment notices issued against it, after noting that the appeals instituted by the temple had been dismissed without adjudication.

A writ petition was filed by Sri Ghati Subramanya Kshetra Development Authority, a temple development authority situated in Doddaballapur Taluk of Bengaluru Rural District, challenging an assessment order pertaining to Assessment Year 2020-21 as well as the attachment notices issued pursuant to the said order.

The department had initiated proceedings on the basis of certain cash transactions and alleged non-filing of return by the assessee for the Assessment Year 2020-21. The assessing authority observed that the petitioner had failed to furnish a valid explanation or supporting evidence regarding the source of the cash deposits. Accordingly, an ex-parte assessment order was passed.

Poornima H. S. prayed before the High Court that the matter may be remitted to the stage of assessment proceedings so that the assessee could be afforded an opportunity to participate and place the necessary material before the assessing authority.

Dilip M., counsel for the Revenue submitted that in the absence of registration under Section 12A of the Income Tax Act, 1961, the petitioner would be required to substantiate its position regarding the cash transactions before the assessing officer. It was further brought to the notice of the Court that 20% of the tax amount had already been paid.

Justice S. Sunil Dutt Yadav primarily noted that the assessment order had been passed ex-parte and that the appeal filed by the petitioner had been rejected without any adjudication on merits. The Court noted that the assessee had made written submissions under Section 148A(b), they were not party to the assessment proceedings.

Accordingly, the High Court set aside the assessment order. Since the assessment itself was quashed, the attachment notices issued against the petitioner were also set aside.

The Court further remitted the matter back to the stage of notice under Section 148 of the Income Tax Act, with the petitioner directed to file their response to the same.

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