PRATHAMIKA KRISHI PATHINA SAHAKARA SANGHA NIYAMITHA vs. INCOME TAX OFFICER

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WP/125/2025HC KarnatakaKAHC01000141202508 January 2025Bench: S.G.PANDIT6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition, quashing several notices including Annexure-A1 dated 28.03.2023, Annexure-A2 dated 30.03.2023, Annexure-A3 dated 30.03.2023, Annexure-A4 dated 30.01.2024, Annexure-A5 dated 12.07.2024, and Annexure-A6 dated 12.07.2024. The court held that the petitioner should be provided an opportunity to reply to the notice under Section 148A(b) and participate in the proceedings. The matter was remanded to the first respondent (Income Tax Officer) to provide this opportunity. The petitioner was granted three weeks from the date of the order to file objections to the notice under Section 148A(b), after which the first respondent was to proceed in accordance with law. All contentions of the parties were left open.

What were the facts?

The petitioner, Prathimika Krishi Pathina Sahakara Sangha Niyamitha, a Primary Agricultural Co-operative Society, filed a writ petition challenging an ex-parte assessment order for Assessment Year 2019-20. The petitioner received a notice under Section 148A(b) of the Income Tax Act, 1961, but was unable to reply or participate in the proceedings due to various reasons. The petitioner sought an opportunity to file a reply and explain that the repayment of loans by farmers, which was treated as income, was a misunderstanding. The respondents admitted the order was ex-parte but noted the petitioner's failure to respond to the notice.

What were the issues?

1. Whether the petitioner should be granted an opportunity to file a reply to the notice under Section 148A(b) of the Income Tax Act, 1961, and participate in the assessment proceedings, considering the ex-parte nature of the order and the petitioner's submission regarding the treatment of farmers' loan repayments as income? (Mixed question of law and fact, concerning principles of natural justice and assessment procedures under Section 148A). Assessee's contentions: The petitioner argued that despite receiving the notice under Section 148A(b), they could not reply due to various reasons and sought an opportunity to explain that the repayment of loans by farmers was wrongly treated as income. They relied on the principle of providing an opportunity to be heard. Revenue's contentions: The revenue admitted that the order was ex-parte but contended that the petitioner failed to submit a reply or participate in the proceedings after receiving the notice under Section 148A(b).

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 272A(1)(d),Section 271AAC(1)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:573 WP No. 125 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 125 OF 2025 (T-IT) BETWEEN:

PRATHAMIKA KRISHI PATHINA SAHAKARA SANGHA NIYAMITHA CO-OPERATIVE SOCIETY ACT, 1956 #1, A CHOLENAHALLY ADAGUR B. O., ADAGUR HASSAN-573116 REP. BY SECRETARY PAN AANFP17053

ALSO AT: ALSO AT RAVI C M AGED 43 YEARS S/O MANJAPPA R/AT NO.1, NEAR VETERINARY HOSPITAL MAIN ROAD, CHOLENAHALLY ADGUR POST CHANNARAYAPATNA- 573116.

…PETITIONER

(BY SRI. RAVI SHANKAR S. V., ADV.)

AND:

1.

INCOME TAX OFFICER WARD -1 AND TPS HASSAN- 573201.

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2025:KHC:573 WP No. 125 of 2025

2.

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

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX -3 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX -3 BMTC BUILDING, KORAMANGALA, BANGALORE -560095.

…RESPONDENTS

(BY SRI. DILIP M. & SRI.M.THIRUMALESH ADVS.)

THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO I) QUASHING THE NOTICE UNDER SECTION 148A(B) OF THE ACT DATED 19/03/2023, BEARING DIN ITBA/AST/F/148A(SCN)/2022- 23/1050959633(1)

NO. ISSUED BEARING DIN ITBA/AST/F/148A(SCN/2022-23/ 1050959633(1) NO ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2019-20 HEREIN MARKED AS ANN-A AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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NC: 2025:KHC:573 WP No. 125 of 2025

CORAM: HON'BLE MR JUSTICE S.G.PANDIT

ORAL ORDER

Learned counsel Sri.M.Dilip accepts notice for respondents.

2.

Though the matter is listed for preliminary hearing, with the consent of the learned counsel appearing for the parties, the petition is taken up for disposal.

3.

Heard learned counsel Sri.Ravishankar S.V. for petitioner and Sri.M.Dilip learned counsel for the respondents. Perused the writ petition papers.

4.

Learned counsel for the petitioner would submit that the petitioner, a Primary Agricultural Co-operative Society is before this Court, questioning the ex-parte assessment order passed for the assessment year 2019-20. It is submitted that the notice under Section 148A(b) of the Income Tax Act, 1961 (for short “1961 Act”) was issued to the petitioner. Though the petitioner received the notice, he could not reply for various reasons and participate in

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NC: 2025:KHC:573 WP No. 125 of 2025

the proceedings initiated in pursuance of the said notice. Learned counsel would pray for an opportunity to the petitioner to file their reply and participate in the proceedings. He submits that repayment of loan taken by the farmers by way of cash is treated as income for the assessment year. Thus, he would pray for an opportunity to explain the same before respondent No.1.

5.

Per contra, learned counsel Sri.Dilip for the respondents admits that it is an ex-parte order, but submits that having received the notice issued under Section 148A(b) of 1961 Act, the petitioner failed to submit its reply or participate in the proceedings.

6.

Having heard the learned counsel for the parties and taking note of the fact situation, I am of the view that the petitioner is to be provided an opportunity to reply to Annexure-A notice issued under Section 148A(b) of 1961 Act and ought to be given an opportunity to the petitioner to participate in the proceedings.

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NC: 2025:KHC:573 WP No. 125 of 2025

7.

As submitted by the learned counsel for the petitioner, the petitioner is a co-operative society. The contention of the petitioner that repayment of small loans by the farmers is treated as income, which needs to be explained by the petitioner. In the above circumstances, only to provide an opportunity to the petitioner, the matter requires to be remanded to respondent No.1.

8.

Hence, the following order:

(i) The writ petition is allowed.

(ii) Annexure-A1 bearing No.ITBA/AST/S/118/ 2022-23/1051500326(1) dated 28.03.2023; Annexure-A2 bearing No.ITBA/AST/F/148A/2022-23/1051635272(1) dated 30.03.2023; Annexure-A3 bearing No.ITBA/AST/S/148-1/2022-23/1051635668(1) dated 30.03.2023; Annexure-A4 bearing No.ITBA/AST/S/147/ 2023-24/1060314130(1) dated 30.01.2024; Annexure-A5 bearing No.ITBA/PNL/F/272A(1)(d)/2024-25/1066654129 (1) dated 12.07.2024; Annexure-A6 bearing

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NC: 2025:KHC:573 WP No. 125 of 2025

No.ITBA/PNL/F/271AAC (1)/2024-25/1066654418(1) dated 12.07.2024 are quashed.

(iii) The petitioner is provided three weeks time from today to file objections to notice under Section 148A(b) of 1961 Act. Thereafter, the first respondent to proceed further, in accordance with law.

All contentions of the parties left open.

Sd/- (S.G.PANDIT) JUDGE

MPK CT:bms List No.: 1 Sl No.: 46

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