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

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WP/106293/2023HC KarnatakaKAHC02015649202313 September 2024Bench: JYOTI MULIMANI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the ex-parte assessment order dated 17.03.2022, passed under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2014-15, was untenable. The Court found that the respondents failed to consider that the petitioner was assigned a new PAN number and therefore could not effectively reply to the notice sent referencing the old PAN number. The Court deemed it proper to allow the assessee to contest the matter by participating in the proceedings. Consequently, the assessment order was set aside, and the matter was remanded to the first respondent (ITO) to the stage of reply to the Section 148 notice. The Court directed the petitioner to appear before the ITO on 21.10.2024. All contentions of the parties were kept open, and the Court expressed no opinion on the merits of the case. The operative direction was to quash the assessment order and remand the matter for fresh consideration.

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 as a Firm. In 2017, a new PAN was issued. The Income Tax Officer (ITO) issued a notice under Section 148 for Assessment Year 2014-15, referencing the old PAN. The petitioner, unable to access the portal due to password issues with the old PAN, requested a reset. Despite these requests, an ex-parte assessment order was passed on March 17, 2022, under Section 147 read with Section 144 and 144B of the Income Tax Act, 1961. The petitioner contended that the notice was invalid as it referred to an old PAN, and they could not respond effectively.

What were the issues?

1. Whether the ex-parte assessment order dated 17.03.2022, passed under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2014-15, is liable to be quashed on the grounds that it was passed without considering the petitioner's inability to respond to a notice issued under Section 148 referencing an old PAN number, despite the issuance of a new PAN number. (Question of law and fact, turning on Section 147, 144, 144B, and 148 of the Income Tax Act, 1961). Assessee's contentions: The petitioner argued that the assessment order was untenable because the notice under Section 148 was issued referencing an old PAN number, and they could not respond due to password issues with that old PAN. They also highlighted that a new PAN had been assigned, making the notice based on the old PAN ineffective. The ex-parte nature of the order was also challenged. Revenue's contentions: The judgment does not record 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:13127 WP No. 106293 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. 106293 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 ORDERS, 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:13127 WP No. 106293 of 2023

ORAL ORDER Sri.Sangram Kulkarni., counsel for the petitioner and Sri.M.Thirumalesh., counsel for the respondents have appeared in person. 2. Though the matter is listed today for orders, it is heard finally. 3. The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the assessment order dated 17.03.2022 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- 22/1040934151(1) for the Assessment Year 2014-15 vide Annexure-H. 4. Heard the arguments and perused the Writ papers with care. 5. 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 the issuance of a PAN card and was assigned the status of a Firm instead of AOP and PAN bearing No.AAYFS3296G was

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NC: 2024: KHC-D:13127 WP No. 106293 of 2023

issued. However, in the year 2017, a new PAN number was assigned bearing No. AARAS3928B. The first respondent issued notice under Section 148 of the Income Tax Act, 1961 relating to Assessment Year 2014-15 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 17.03.2022. This is untenable. The respondents have failed to consider that the petitioner was assigned with new PAN number and therefore, could not reply to the notice that was sent 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. 6. The Writ of Certiorari is ordered. The assessment order dated 17.03.2022 passed under Section 147 R/w Section 144 R/w Section 144B of the Income Tax Act, 1961 in DIN No:

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NC: 2024: KHC-D:13127 WP No. 106293 of 2023

ITBA/AST/S/147/2021-22/1040934151(1) for the Assessment Year 2014-15 vide Annexure-H is quashed. The matter is remanded to the first respondent to the stage of reply to 148 notice and to pass a 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, the petitioner is directed to appear before the first respondent on 21.10.2024 without awaiting further notice. 7. Resultantly, the Writ Petition is allowed and remanded. Sd/- (JYOTI MULIMANI) JUDGE TKN/MRP LIST NO.: 3 SL NO.: 1

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