IGOOR SEVA SAHAKARA SANGHA NIYAMITHA vs. INCOME TAX OFFICER

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WP/12740/2024HC KarnatakaKAHC01022640202408 August 2024Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. It was an undisputed fact that the petitioner had not submitted a reply to the Section 148A(b) notice. Considering the petitioner's assertion that this failure was due to bonafide reasons, unavoidable circumstances, and sufficient cause, and their willingness to submit a reply if given another opportunity, the Court deemed it just and appropriate to set aside the impugned order dated 25/03/2022 passed under Section 148A(d) and all subsequent notices and orders. The matter was remitted back to the Income Tax Officer (Respondent No.1) for reconsideration. The petitioner was granted liberty to submit their replies, responses, pleadings, and documents, which the respondent No.1 was directed to consider, provide a reasonable opportunity, and proceed further in accordance with the law. The Court did not decide on the merits of the assessment or penalty.

What were the facts?

The petitioner, IGOOR SEVA SAHAKARA SANGHA NIYAMITHA, filed a writ petition before the High Court of Karnataka challenging various notices and orders issued by the Income Tax Department for Assessment Year 2018-19. These included a notice under Section 148A(b) dated 11/03/2022, an order under Section 148A(d) dated 25/03/2022, an unsigned notice under Section 148 dated 25/03/2022, an order under Section 147 r.w.s 144 dated 23/03/2023, a penalty order under Section 271AAC(1) dated 26/09/2023, and a penalty notice under Section 274 r.w.s 272A(1)(d) dated 23/03/2023. The petitioner contended that the Section 148A(b) notice was not received, preventing them from submitting a reply due to bonafide reasons and sufficient cause.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, dated 11/03/2022 was duly served on the petitioner, and if not, whether the subsequent proceedings are vitiated? (Mixed question of law and fact) Assessee's Contention: The petitioner argued that the notice under Section 148A(b) was not received, and consequently, they were unaware of it and could not submit a reply. This omission was due to bonafide reasons, unavoidable circumstances, and sufficient cause. They sought an opportunity to submit their response. Revenue's Contention: The respondents argued that the petition had no merit and was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 271AAC(1),Section 274,Section 272A(1)(d)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:31786 WP No. 12740 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 12740 OF 2024 (T-IT) BETWEEN:

IGOOR SEVA SAHAKARA SANGHA NIYAMITHA IGOORU, IGOORU B.O., AIGUR, KODAGU - 571251 PAN. AAAAI1036J REP BY CEO DICKYMRAJ A A ALSO AT DICKYRAJ A A S/O AIYAPPA, AGED ABOUT 50 YEARS, KIRAGANDOOR VILLAGE AND POST, SOMWARPET TALUK, KODAGU - 571251 …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND:

1.

INCOME TAX OFFICER ITO WARD MADIKERI KODAGU - 571201

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,

Digitally signed by ANAND N Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:31786 WP No. 12740 of 2024

DELHI - 110 003.

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX -3 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX - 3 BMTC BUILDING, KOKRAMANGALA, BANGALORE - 560095 …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE UNDER SECTION 148A(b) OF THE ACT DATED 11/03/2022 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2021- 22/1040620153(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANENXURE-A; QUASH THE ORDER UNDER SECTION 148A(d) OF THE ACT DATED 25/03/2022 BEARING DIN NO. ITBA/AST/F/148A/2021- 22/1041518111(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 201819 HEREIN MARKED AS ANNEXURE-A1 AND ETC.

THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner has sought for the following reliefs:

"i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148A(b) of the Act dated 11/03/2022 bearing DIN No. ITBA/AST/F/148A(SCN)/2021-22/1040620153(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A.

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NC: 2024:KHC:31786 WP No. 12740 of 2024

ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order under Section 148A(d) of the Act dated 25/03/2022 bearing DIN No. ITBA/AST/F/148A/2021-22/1041518111(1) issued by the Respondent No.1 for the assessment year 2018- 19 herein marked as Annexure - A1.

iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the unsigned notice under Section 148 of the Act dated 25/03/2022 bearing DIN No. ITBA/AST/S/148_1/2021- 22/1041518965(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A2.

iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order passed U/s 147 r.w.s 144 dated 23/03/2023 bearing ITBA/AST/S/147/2022-23/1051219571(1) issued by the Respondent No. 2 for the assessment year 2018- 19 herein marked as Annexure - AЗ.

v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order u/s 271AAC(1) of the Act dated 26/09/2023 bearing DIN No. ITBA/PNL/F/271AAC(1)/2023-24/1056574175(1) by the Respondent No. 2 for the assessment year 2018-19 herein marked as Annexure - A4.

vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice under Section 274 r.w.s 272A(1) (d) of the Act dated 23/03/2023 vide ITBA/PNL/S/272A(1)(d)FL//2022-

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NC: 2024:KHC:31786 WP No. 12740 of 2024

23/1051189191(1), issued by the Respondent No.2 for the assessment year 2018-19 herein marked as Annexure - A5."

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that notice issued by the respondents under Section 148A(b) of the Income Tax Act, 1961 (for short, ‘IT Act’), dated 11.03.2022 was not received by petitioner and he was not aware of the notice and consequently, petitioner could not submit its reply / response along with documents to the said notice. It is submitted that the inability and omission on the part of the petitioner to submit reply / response along with documents to the Section 148A(b) notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, if one more opportunity is provided to the petitioner to do so by setting aside the impugned orders and notices, the petitioner would do so and respondents may be directed to proceed further in accordance with law.

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NC: 2024:KHC:31786 WP No. 12740 of 2024

4.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.

5.

A perusal of the impugned order will indicate that it is an undisputed fact that the petitioner has not submitted reply / response along with documents to Section 148A(b) notice. Under these circumstances, in view of the specific assertion on the part of the petitioner that its inability and omission to submit a reply along with documents to Section 148A(b) notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and if one more opportunity is granted, the petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned order at Annexure-A1 dated 25.03.2022 passed under Section 148A(d) of the IT Act and subsequent notice / orders, etc., and remit the matter back to respondent No.1 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 148A(b) notice and to proceed further in accordance with law.

6.

In the result, the following:

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NC: 2024:KHC:31786 WP No. 12740 of 2024

ORDER

(i) The petition is hereby allowed.

(ii) Impugned notices / orders at Annexures - A, A1, A2, A3, A4 and A5 are hereby set aside.

(iii) Matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 148A(b) of the IT Act at Annexure-A dated 11.03.2022.

(iv) Liberty is reserved in favour of the petitioner to submit replies, responses, pleadings, documents, etc., to the respondent No.1, who shall consider the same, provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law.

Sd/- (S.R.KRISHNA KUMAR) JUDGE

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