SHRI SHIVLINGESHWAR COOPERATIVE CREDIT SOCIETY vs. THE INCOME TAX OFFICER WARD 1 AND TPS BAGALKOT

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WP/106292/2023HC KarnatakaKAHC02015651202313 September 2024Bench: JYOTI MULIMANI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the ex-parte assessment order dated 21.03.2022, passed under Section 147 read with Section 144 and Section 144B of the Income Tax Act, 1961, for Assessment Year 2015-16, was untenable. The Court found that the respondents failed to consider that the petitioner had been assigned a new PAN number, which prevented it from replying to the notice sent using the old PAN. Due to this procedural lapse and the resulting ex-parte order, the Court deemed it proper to allow the assessee to contest the matter by participating in the proceedings. Therefore, the assessment order was set aside, and the matter was remanded to the first respondent (ITO) to the stage of replying to the Section 148 notice. The Court explicitly stated that it had not expressed any opinion on the merits of the case and kept all contentions of the parties open. The petitioner was directed to appear before the first respondent on 21.10.2024.

What were the facts?

The petitioner, Shri. Shivlingeshwar Co-operative Credit Society, a cooperative society engaged in providing credit facilities, was initially assigned a PAN with the status of 'Firm'. Subsequently, in 2017, a new PAN was issued. The Income Tax Officer (ITO), Ward 1 and TPS Bagalkot, issued a notice under Section 148 of the Income Tax Act, 1961, for Assessment Year 2015-16, referencing the old PAN. The petitioner, unable to access the portal due to the old PAN and password issues, requested a password reset, which was not resolved. Consequently, an ex-parte assessment order was passed on March 21, 2022, under Section 147 read with Section 144 and Section 144B of the Act.

What were the issues?

1. Whether the ex-parte assessment order dated 21.03.2022, passed under Section 147 read with Section 144 and Section 144B of the Income Tax Act, 1961, for Assessment Year 2015-16, is liable to be quashed on the grounds that it was passed without considering the petitioner's change in PAN and the inability to respond to the notice. Assessee's Contention: The petitioner argued that the assessment order was untenable because it was passed ex-parte, failing to acknowledge the petitioner's new PAN and the resulting inability to respond to the notice issued under the old PAN. The petitioner also highlighted the unresolved issue of password reset for the old PAN. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC-D:13128 WP No. 106292 of 2023

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 13TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 106292 OF 2023 (T-IT) BETWEEN:

SHRI. SHIVLINGESHWAR CO-OPERATIVE CREDIT SOCIETY, AT/POST: SAIDAPUR, TAL: MUDHOL, DIST: BAGALKOT-587 316, REPRESENTED BY ITS SECRETARY, SHRI. RAMESH BASAPPA MOPAGAR, AGE: 59 YEARS, OCC: SECRETARY, R/O: BISANAL, RABAKAVI BANAHATTI, DIST: BAGALKOT. …PETITIONER (BY SRI. SANGRAM.S.KULKARNI., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER, WARD 1 AND TPS BAGALKOT, AIKAR BHAVAN SECTOR 24, NAVANAGAR, DIST: BAGALKOT-587 102.

2.

THE PRINCIPAL COMMISSIONER OF INCOME TAX, C.R. BUILDING, NAVANAGAR, HUBBALLI-580 025. …RESPONDENTS (BY SRI. M.THIRUMALESH., ADVOCATE FOR R1-R2)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, AN ORDER IS MADE AS UNDER:

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC-D:13128 WP No. 106292 of 2023

ORAL ORDER Sri.Sangram S.Kulkarni., counsel for the petitioner and Sri.M.Thirumalesh., counsel for the respondents have appeared in person. 2. The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the assessment order dated 21.03.2022 passed under Section 147 R/w Section 144 R/w Section 144B of the Income Tax Act, 1961 in DIN No:ITBA/AST/S/147/2021- 22/1041190113(1) for the Assessment Year 2015-16 vide Annexure-H. 3. Heard the arguments and perused the Writ papers with care. 4. The petitioner is a Cooperative Society registered under the Karnataka Cooperative Societies Act, 1959 and is engaged in the business of providing credit facilities to its members. The petitioner after its registration applied for issuance of PAN card and was assigned the status of Firm instead of AOP and PAN bearing No.AAYFS3296G was issued. However, in the year 2017, a new PAN number was assigned

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NC: 2024:KHC-D:13128 WP No. 106292 of 2023

bearing No.AARAS3928B. The first respondent issued notice under Section 148 of the Income Tax Act, 1961 relating to Assessment Year 2015-16 on the pretext that the petitioner has not filed its returns of income for the said Assessment Year by referring to the old PAN number. Since the petitioner did not have the password, requested the first respondent to reset the password. Despite requests, the issue was not resolved to reset the password. However, an ex-parte assessment order was passed on 21.03.2022. This is untenable. The respondents have failed to consider that the petitioner has been assigned with new PAN number and therefore, it could not reply to the notice sent to it by referring to the old PAN number. Because of the ex-parte order, this Court considers it proper to allow the assessee to contest the matter by taking part in the proceedings. Hence, the matter requires a remand. Therefore, the assessment order is liable to be set aside, so it is set aside. 5. The Writ of Certiorari is ordered. The assessment order dated 21.03.2022 passed under Section 147 R/w Section 144 R/w Section 144B of the Income Tax Act, 1961 in DIN No:ITBA/AST/S/147/2021-22/1041190113(1) for the Assessment Year 2015-16 vide Annexure-H is quashed.

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NC: 2024:KHC-D:13128 WP No. 106292 of 2023

The matter is remanded to the first respondent to the stage of reply to 148 notice and to pass fresh order. All contentions of the parties are kept open. This Court has not expressed any opinion on the merits of the case. Since the petitioner is represented by its counsel, petitioner is directed to appear before the first respondent on 21.10.2024 without awaiting further notice. 6. Resultantly, the Writ Petition is allowed and remanded. Sd/- (JYOTI MULIMANI) JUDGE

TKN/MRP LIST NO.: 1 SL NO.: 29

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