KOTTIAHGAL YARISWAMY vs. INCOME TAX OFFICER

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WP/103320/2024HC KarnatakaKAHC02008685202427 June 2024Bench: PRADEEP SINGH YERUR7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the petition should be allowed. The Court noted that Annexure-B, dated 30.11.2022, clearly showed that the petitioner had uploaded his changed email address in the respondents' filing portal. The show cause notice, admittedly issued on 14.02.2023, was sent to the old email address 'prahalladsetty@gmail.com', not the updated one. Therefore, the petitioner was not notified on his correct email address, preventing him from responding, replying, and participating in the proceedings. The Court emphasized the fundamental principle of law that an assessee must be given notice and an opportunity of hearing to controvert or participate in any action initiated by the respondents. Consequently, all impugned orders, including the notice under Section 148A(b), the approval order under Section 151, and subsequent notices and orders, were quashed. The petitioner was to be provided an opportunity of hearing on the show cause notice within four weeks, and the respondents were directed to consider the updated email ID for future notices.

What were the facts?

The petitioner, Kottiahgal Yariswamy, proprietor of Himalaya Kissan Seva Kendra, filed a writ petition challenging notices issued under Section 148A(b) and 148A(d) of the Income Tax Act, 1961, and subsequent orders, including an approval order under Section 151. The assessment year in question is 2019-20. The petitioner stated that he failed to file his return for AY 2019-20 due to inadvertence. He claimed he was unaware of the notices as they were not sent to his updated email address, 'yariswamy25@gmail.com', which he had uploaded on the filing portal on 30.11.2022, prior to the issuance of the notice on 14.02.2023. The respondents contended that the notices were sent to the then-existing email address 'prahalladsetty@gmail.com' and it was the petitioner's duty to verify and communicate any discrepancies.

What were the issues?

1. Whether the notices issued under Section 148A(b) of the Income Tax Act, 1961, and subsequent proceedings are vitiated due to non-service of notice on the petitioner's updated email address, thereby violating principles of natural justice? Assessee's Contention: The petitioner argued that despite updating his email address on the filing portal on 30.11.2022, the notices dated 14.02.2023 and subsequent orders were sent to an old email address ('prahalladsetty@gmail.com'), rendering him unaware of the proceedings and denying him an opportunity to participate. He sought quashing of the orders and a fresh assessment. Revenue's Contention: The respondents contended that the notices were issued to the email address existing on their web portal ('prahalladsetty@gmail.com') at the time. They argued that it was the petitioner's responsibility to verify the email address and ensure communication, and that there was no illegality, perversity, or arbitrariness in the issuance of the show cause notice and the subsequent order.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 151

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 27TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO.103320 OF 2024 (T-IT) BETWEEN:

KOTTIAHGAL YARISWAMY, AGE: 57 YEARS, PROPRIETOR: HIMALAYA KISSAN SEVA KENDRA, TOOLAHALLI ROAD, UJJINI-583136. … PETITIONER (BY SRI RAVI SHANKAR S.V. AND SRI SHASHANK S. HEGDE, ADVOCATES)

AND:

1.

INCOME TAX OFFICER, WARD NO-1 AND TPS, AYAKAR BHAVAN, M.J. NAGAR, 1ST CROSS, DAM ROAD, HOSAPETE, KARNATAKA-583203.

2.

NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003.

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-HUBLI, C.R. BUILDING, NAVANAGAR, HUBBALLI, KARNATAKA-580025. … RESPONDENTS (BY SRI M. TIRUMALESH AND SMT. ROOPA ANAVEKAR, ADVOCATES)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF

ASHPAK KASHIMSA MALAGALADINNI Digitally signed by ASHPAK KASHIMSA MALAGALADINNI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2024.07.10 12:25:32 +0530

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE UNDER SECTION 148A(b) OF THE ACT, DATED 14/02/2023 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2022-23/1049724124(1), ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2019-20 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

1.

Heard learned counsel for the petitioner and respondents. 2. The present petition is filed seeking to quash the notice issued under Sections 148A(b) and 148A(d) of the Income Tax Act, 1961 (for short the Act) and other notices issued by respondent Nos. 1 and 2 and also the approval order passed under Section 151 of the Act, by the respondent No.3 in pursuance to notices issued under Section 148 of the Act. 3. Petitioner is an individual, running a petrol pump business and purchases fuel from the Indian Oil Corporation Ltd., which is retailed to the public. The petitioner also owns a truck for easy procurement of fuel and the truck, which leads to the Indian Oil Corporation Ltd., to which he receives contract receipts towards leasing of the trucks, which is reflecting in the Form No.26AS.

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

4.

The petitioner not filed his returns of income for the assessment year 2019-2020 due to inadvertence, hence, respondent No.1 issued notice under Section 148A(b) of the Act on 14.02.2023. For the reason stated therein in the notice, respondent No.3 passed an order after obtaining unsigned approval under Section 151 of the Act, as it was a fit case for issuance of the notice under Section 148 of the Act. Therefore, respondent No.1 issued notice for proposing to reassess the income and re-compute the loss or depreciation allowances or any other allowances or deductions requiring the petitioner to furnish income tax returns in response to the same. 5. It is the case of the petitioner that it was unaware of the notices issued until completion of penalty proceedings as the petitioner’s personal email ID which was uploaded in the filing portal in the form of ‘yariswamy25@gmail.com’ and which was updated on 30.11.2022 and the notices were issued by respondent under Section 148A(b) of the Act is on 14.02.2023. Therefore, it is the contention of the learned counsel for the petitioner that despite him uploading in the filing portal about the changed e-mail address, he was not notified on the present e-mail address, while issuing the notice under Section 148 of

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

the Act, so also the orders that were passed subsequent to the said notice. Therefore, the petitioner was totally kept in dark and un-aware of the proceedings, he could not participate. Hence, he is before this Court on the ground that no proper opportunity was provided in view of the notices not issued to the petitioner to the e-mail that was uploaded prior to the issuance of notices. On these grounds, he seeks interference in the hands of this Court to quash the order and remit the matter for fresh assessment by accepting the changed e-mail ID in the filing portal by providing opportunity and re-assess the computation for payment of tax. 6. Per contra, learned counsel for respondents vehemently contends that the contention so raised would not be accepted for the reason that, in the notices issued to the petitioner, the e-mail is notified as ‘prahalladsetty@gmail.com’, who was earlier listed in the web portal of respondents. It is also the duty of the petitioner to have checked on the said person whether he is the petitioner himself or tax auditor, who should have communicated the same to the petitioner and he should have replied to the notice as that was the existing mail, which is also reflected in the change of e-mail produced by the

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

petitioner. Learned counsel sustains the order passed on the ground that there is no illegality, perversity or arbitrariness in issuance of show cause notice and the order passed thereafter. 7. Having heard learned counsel for both the parties, apparently it is clear from the document produced at Annexure- B, dated 30.11.2022 that the petitioner has uploaded his change in e-mail address in the filing portal of the respondents. The show cause notice admittedly was issued on 14.2.2023, which is much later i.e. again issued to e-mail address of one ‘prahalladsetty@gmail.com’, thereby not showing the correct e-mail. ID of the petitioner, which was uploaded in the filing portal. Hence, the Email ID of the petitioner’ which was uploaded in the filing portal was not issued any notice. Hence, the submissions put forth by the counsel for the petitioner has sufficient force that, as on date of issuance of notices, the notices were not sent to the email address of the petitioner for him to respond and reply and participate in the proceedings. 8. Under the circumstances, It is fundamental principle of law that notice and an opportunity of hearing is to be given to assessee to controvert or participate, or show cause as to

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

why any action that is initiated by the respondents should be sustained or not. 9. Under the circumstances, the petition requires to be allowed. Hence, I pass the following: ORDER i) The Petition is allowed. ii) The impugned order dated 21.03.2023, passed by respondent No.1 at Annexure-A1, impugned order dated 21.03.2023, issued by respondent No.1 at Annexure-A2, impugned order dated 10.03.2024, issued by respondent No.2 at Annexure-A3, impugned order dated 10.03.2024, issued by respondent No.2 at Annexure-A4, impugned order dated 10.03.2024, issued by respondent No.2 at Annexure-A5 and impugned order dated 10.03.2024, issued by respondent No.3 at Annexure-A6 are hereby quashed. iii) The order of approval order under Section 151 of the Act, dated 20.3.2023, issued by the respondent No.3 for the assessment year 2019-2020 vide Annexure-A7 is also quashed.

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NC: 2024:KHC-D:8749 WP No. 103320 of 2024

iv) In view of the above said order, the petitioner shall be provided an opportunity of hearing and participate in the show cause notice issued by the respondents vide Annexure-A, within four weeks from the date of receipt of copy of this order. v) The respondents shall also take into consideration the change of Email ID that is furnished by the petitioner vide Annexure-B in it’s portal for issuance of notice thereafter.

Sd/- JUDGE

VB CT:BCK List No.: 1 Sl No.: 23

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