SMT MANJULA MALLASHETTY vs. THE CHIEF COMMISSIONER OF INCOME TAX

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WP/12290/2024HC KarnatakaKAHC01025466202412 June 2024Bench: S SUNIL DUTT YADAV3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka, after perusing the sale deed and considering the petitioner's contentions, found that the petitioner's argument that the entirety of the sale consideration was taken into account, while her share was only Rs. 6,00,000/-, merits consideration. The Court observed that the order taking the entirety of the sale consideration made out a strong ground on merits. Consequently, the Court set aside the assessment order at Annexure-A. It directed that the matter be relegated to the stage of reply to the notice under Section 148 of the Act. The petitioner was granted three weeks from the date of receipt of the certified copy of the order to file her reply. All contentions were kept open. The operative direction was to remand the matter for fresh assessment after providing an opportunity of being heard.

What were the facts?

The petitioner, Smt. Manjula Mallashetty, challenged an assessment order dated 28.03.2023 passed under Section 147 read with Section 144 of the Income Tax Act, 1961, for Assessment Year 2018-19. The petitioner contended that she was not served with notice and that the entire sale consideration of Rs. 59,90,248/- was brought to tax as short-term capital gain. She argued that her share as the 5th vendor in the sale deed dated 28.03.2018 was only Rs. 6,00,000/-, as evidenced by a cheque dated 16.03.2018. The petitioner sought an opportunity to present her case before the Assessing Officer. The petition also challenged consequential orders dated 14.09.2023 and 06.10.2023.

What were the issues?

1. Whether the assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961, is liable to be quashed on the ground of non-service of notice to the petitioner? Assessee's Contention: The petitioner argued that she was not served with any notice, and therefore, the assessment order is invalid. She further contended that the entire sale consideration was wrongly attributed to her, whereas her actual share was significantly lower, and sought an opportunity to present her case. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments regarding non-service of notice or the quantum of her share in the sale consideration. The focus of the court's order was on the procedural aspect of providing an opportunity to be heard.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148

AI-generated summary — verify with the full judgment below

Before: SMT MANJULA MALLASHETTY

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NC: 2024:KHC:20643 WP No. 12290 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12290 OF 2024 (T-IT) BETWEEN: 1. SMT MANJULA MALLASHETTY W/O NAGARAJ SETTY, AGED ABOUT 64 YEARS, RESIDING AT NO.398, DHARMA SHREE RAMAGONDANAHALLI BANGALORE - 560 066. … PETITIONER (BY SRI. SURESH BABU B N., ADVOCATE) AND: 1. THE CHIEF COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU - 560 001. 2. THE ASSESSING OFFICER, WARD 4(2)(1) INCOME TAX DEPARTMENT, BMTC BUILDING, 80 FT ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. … RESPONDENTS (BY SRI. E.I. SANMATHI., ADVOCATE) Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:20643 WP No. 12290 of 2024

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT QUASHING THE ASSESSMENT ORDER 28.03.2023 PASSED IN DIN AND ORDER NUMBER ITBA/AST/S/147/2022- 23/1051465138(1) FOR THE AY 2018-19 PASSED BY THE R-2 PRODUCED AND MARKED AS ANNEXURE-A AND CONSEQUENTIAL ORDERS DTD 14.09.2023 BEARING NO. DIN ITBA/PNL/F/270A/2023-24/1056076171 (1) PASSED BY THE R- 2 PRODUCED AND MARKED AS ANNEXURE-J AND AN ORDER DTD 06.10.2023 PASSED IN DIN NO. ITBA/PNL/F/272A(1)(d)/2023-24/1056850098(1) PRODUCED AND MARKED AS ANNEXURE-K AND REMAND THE MATTER TO R-2 FOR FRESH ASSESSMENT BY PROVIDING OPPORTUNITY OF BEING HEARD AND ETC.

THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Petitioner has challenged the assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961 (for short ‘the Act’) at Annexure-A, on the ground that she was not served with notice. 2. It is submitted that the petitioner is not an assessee and the sale consideration on sale of the movable property has been taken note of and an amount of Rs.59,90,248/- is brought to tax under the head ‘short terms capital gain’. However, it is submitted that in terms of the sale deed dated 28.03.2018, the petitioner herein is

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NC: 2024:KHC:20643 WP No. 12290 of 2024 the 5th vendor and her share is only Rs.6,00,000/- as per the cheque dated 16.03.2018 and accordingly, she seeks for affording an opportunity before the Authority to put forth her case. 3. Perused the sale deed, prima facie the contention of the petitioner merits consideration. The order passed taking entirety of the sale consideration makes out a strong ground on merits. In light of such facts as made out, the matter is relegated to the stage of reply to the notice under Section 148 of the Act. 4. Accordingly, the order at Annexure-A is set aside. All contentions are kept open. The petitioner to make out her reply to the notice under Section 148 of the Act within a period of 3 weeks from the date of receipt of certified copy of this order. Petition is disposed off accordingly. Sd/- JUDGE VP

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