KOLLASRU KANDY DHANESH KUMAR vs. ASSESSMENT UNIT

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WP(C)/10822/2024HC KeralaKLHC01092353202418 March 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court found no substance in the petitioner's contentions. Regarding the notice, it was stated that the notice was issued and available on the web portal. The Court rejected the argument that no real-time alert was sent, emphasizing that automatic systems send alerts to the registered mobile number and email address once a notice is issued. Consequently, if the petitioner did not respond to the notice under Section 148A, there was no requirement for a further notice for an opportunity of hearing, as the petitioner had not controverted the allegations. Concerning faceless assessment, the Court held that the assessment was completed facelessly and that prior to the assessment stage, there is no requirement for faceless proceedings as per the IT Act. Therefore, the writ petition was dismissed.

What were the facts?

The petitioner, Kollasru Kandy Dhanesh Kumar, an assessee under the Income Tax Act, 1961, filed a writ petition challenging an Assessment Order passed under Section 147 read with Section 144B of the Act for Assessment Year 2016-17. The petitioner had not filed a return of income for AY 2016-17. Based on information of substantial financial transactions during FY 2015-16, the Assessing Officer had reason to believe income had escaped assessment. An order under Section 148A(d) was passed, followed by a notice under Section 148 on March 31, 2023. The petitioner filed a return on April 24, 2023, declaring a total income of Rs. 1,67,33,860/-. Subsequent notices under Sections 143(2)/142(1) were issued, to which the petitioner did not respond, leading to the completion of the assessment.

What were the issues?

1. Whether the petitioner was provided with proper notice under Section 143 of the IT Act and an opportunity of hearing under Section 148A(d) of the IT Act? (Mixed question of law and fact, concerning Sections 143, 148A(d), 147, 144B). 2. Whether the Assessing Officer had jurisdiction in light of the faceless assessment provisions incorporated in the IT Act from 2022? (Question of law, concerning the applicability of faceless assessment provisions). Assessee's Contentions: - The petitioner was not given 'proper' notice under Section 143 of the IT Act. - No opportunity of hearing was provided under Section 148A(d). - The Assessing Officer lacked jurisdiction due to the faceless assessment provisions. Revenue's Contentions: - Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 139(1),Section 148A,Section 148,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 18TH DAY OF MARCH 2024 / 28TH PHALGUNA, 1945 WP(C) NO. 10822 OF 2024 PETITIONER/S:

KOLLASRU KANDY DHANESH KUMAR, AGED 53 YEARS KOLLARUKANDY SAROJINI NIVAS, PANTHEERANKAVU P.O, KOZHIKODE, PIN - 673019

BY ADVS. P.RAGHUNATHAN PREMJIT NAGENDRAN; RISHAL.K SUDEVAN MAMIYIL MUKKATH

RESPONDENT/S:

1 ASSESSMENT UNIT HEADED BY PRINCIPLE CHIEF COMMISSIONER, INCOME TAX DEPARTMENT, MINISTRY OF INDIA, NEW DELHI, PIN - 110001 2 INCOME TAX OFFICER WARD 2(3), AAYAKKAR BHAVAN, SOUTH BLOCK, MANANCHIRA, CALICUT, PIN - 673001

BY ADV KEERTHIVAS GIRI OTHER PRESENT:

SRI.P.G.JAYASHANKAR-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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J U D G M E N T

The petitioner, an assessee under the provisions of the Income Tax Act 1961 (for short, ‘IT Act’), has filed the present writ petition impugning the Ext.P7 Assessment Order passed under Section 147 read with Section 144B of the IT Act. The assessment involved in the present case is 2016-17. 2. The petitioner did not file the return of his income for the Assessment Year 2016-17 under Section 139(1) of the IT Act. As per the information available with the Department, the petitioner, during the Financial Year 2015-16, relevant to the Assessment Year 2016-17, has entered into financial transactions of huge proportions, which are already extracted in the Assessment Order in question. As the petitioner, despite entering into huge financial transactions of crores, did not file the return of income, the jurisdictional Assessing Officer had reason to believe that the income of the petitioner had escaped

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assessment within the meaning of Section 147 of the IT Act. As a consequence, an order under Section 148A(d) came to be passed, and a notice under Section 148 of the IT Act was issued on 31.03.2023. 2.1 In response to the notice under Section 148 of the IT Act, the petitioner filed return of his income on 24.04.2023 and declared a total income of Rs.1,67,33,860/-. Subsequent thereto, several notices under Sections 143(2)/142(1) were issued, the details of which have been given in the Assessment Order itself. The petitioner did not respond to the several notices which are issued to him, and therefore the assessment came to be completed in Ext.P7. 3. The learned Counsel for the petitioner submits that the petitioner was not given ‘proper’ notice under Section 143 of the IT Act; no opportunity of hearing was given to him under Section 149A(d); and the Assessing Officer does not have

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jurisdiction in view of the faceless provisions incorporated in the IT Act with effect from 2022. 4. Admittedly, the petitioner was issued notice and the notice is available in the web portal. This Court cannot believe the contention of the learned Counsel for the petitioner that no real-time alert was sent by e-mail and to the mobile number given by the petitioner to the Income Tax Department, inasmuch as there is no human intervention and these are automatic systems. Once a notice is issued, a real-time alert is sent to the mobile number given to the Department as well as the e-mail address. Therefore, this Court finds no substance in the first contention. 4.1 Once the petitioner did not respond to the notice issued under Section 148A of the IT Act, there is no question of issuing further notice for an opportunity of hearing as the petitioner had not controverted the allegations in the notice

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issued under Section 148A of the Act. 4.2 So far as the question of faceless assessment is concerned, the assessment has been completed faceless. Prior to assessment, there is no requirement for faceless proceedings as per the provisions of the Income Tax Act. Therefore, I find no substance in the present writ petition, which is hereby dismissed. Sd/- DINESH KUMAR SINGH JUDGE

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APPENDIX OF WP(C) 10822/2024

PETITIONER EXHIBITS Exhibit P-1 TRUE COPY OF NOTICE U/S 148A[B] FOR AY 2016.17 DTD 09.02.2023 Exhibit P-2 TRUE COPY OF ORDER U/S 148A[D] FOR AY 2016.17 DTD 31.03.2023 Exhibit P-3 TRUE COPY OF NOTICE U/S 148 FOR AY 2016.17 DTD 31.03.2023 Exhibit P-4 RETURN OF INCOME FOR AY 2016.17 FILED ON 24.04.2023 Exhibit P-5 TRUE COPY OF SHOW CAUSE NOTICE FOR AY 2016.17 DTD 03.01.2024 Exhibit P-6 TRUE COPY OF REPLY DTD 24.01.2024 TO EXT-P5 NOTICE Exhibit P-7 TRUE COPY OF ASSESSMENT ORDER FOR AY 2016.17 DTD 29.02.2024 Exhibit P-8 TRUE COPY OF PENALTY NOTICE U/S 275 R/W SEC 271F AY 2016.17 DTD 29.02.2024

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