RUDRAKSHIPURA PUTTAMADAPPA SUNIL vs. INCOME TAX OFFICER

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WP/13996/2024HC KarnatakaKAHC01025112202419 June 2024Bench: S SUNIL DUTT YADAV4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated March 21, 2022, was indeed contrary to the statutory provision, as it provided a reply period of less than the mandatory minimum of seven days. The Court accepted the assessee's contention that prejudice was caused by this non-adherence to the time limit. Consequently, the notice under Section 148A(b) was set aside. In light of this, the order under Section 148A(d), the notice under Section 148, the assessment order under Section 147 read with Sections 144 and 144B, and all consequential penalty orders and notices were also set aside. The revenue was granted liberty to issue a fresh notice under Section 148A(b) and resume proceedings in accordance with the law. No issue was expressly left undecided.

What were the facts?

The petitioner, Rudrakshipura Puttamadappa Sunil, challenged notices and orders related to income escaping assessment for Assessment Year 2018-19. The primary challenge was to the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated March 21, 2022. The petitioner argued that this notice provided a reply deadline of March 25, 2022, which was less than the mandatory minimum of seven days stipulated in Section 148A(b). This procedural defect, the petitioner contended, rendered all subsequent proceedings invalid. The revenue was represented by the Income Tax Officer, Ward No.1, Mandya, and other authorities.

What were the issues?

1. Whether the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated March 21, 2022, is invalid for providing a reply period of less than seven days, thereby violating the statutory mandate. Assessee's Contention: The petitioner argued that the notice under Section 148A(b) provided a reply period from March 21, 2022, to March 25, 2022, which is less than the statutorily mandated minimum of seven days. This violation of Section 148A(b) renders the notice defective, and consequently, all subsequent proceedings, including the order under Section 148A(d), the notice under Section 148, the assessment order under Section 147 read with Sections 144 and 144B, and the penalty orders, should be quashed. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the validity of the notice or the time period provided.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:21978 WP No. 13996 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 13996 OF 2024 (T-IT) BETWEEN: RUDRAKSHIPURA PUTTAMADAPPA SUNIL RUDRAKSHIPURA POST, MADDUR TALUK MANDYA -571 422. …PETITIONER (BY SRI RAVISHANKAR S.V, ADV.) AND:

1.

INCOME TAX OFFICER WARD NO.1 AND TPS MANDYA - 571 401.

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, 3-RAMP, JAWAHARLAL NEHRY STADIUM, DELHI - 110 003.

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-3 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-3, BMTC BUILDING, KORAMANGALA, BANGALORE - 560 095. …RESPONDENTS (BY SRI M. THIRUMALESH, ADV.)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRYING TO DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE UNDER SECTION 148A(B) OF THE ACT, DATED 21/03/2022 BEARING DIN NO.

Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:21978 WP No. 13996 of 2024

ITBA/AST/F/148A(SCN)/2021-22/1041110629 (1), ISSUED BY THE RESPONDENT NO. 1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE -A.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

1.

The petitioner has called in question the validity of the notice under Section 148A(b) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act' for short) at Annexure-A as also the order under Section 148A(d) of the Act at Annexure-A1 and notice under Section 148 of the Act at Annexure - A2, assessment order under Section 147 read with Sections 144 and 144B at Annexure - A3, penalty order at Annexure- A4 and penalty notice at Annexures - A5, A6, A7 and A8.

2.

Learned counsel for the petitioner submits that the notice under Section 148A(b) of the Act issued on 21.03.2022 has provided time till 25.03.2022 for reply which is in violation of the time of not less than 7 days in terms of Section 148A(b) of the Act and accordingly, once the notice under Section 148A(b) of the Act is held to be defective, all proceedings pursuant thereto ought to be set-aside.

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NC: 2024:KHC:21978 WP No. 13996 of 2024

3.

The legal mandate under Section 148A(b) of the Act is that an opportunity would be provided to show cause by notice being not less than 7 days. In the present case, admitted facts would show that the period prescribed is less than period prescribed under Section 148A(b) of the Act. Section 148A(b) of the Act reads as under:- "148A. Conducting inquiry, providing opportunity before issue of notice under section 148.-The Assessing Officer shall, before issuing any notice under section 148,-

(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;

(b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);"

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NC: 2024:KHC:21978 WP No. 13996 of 2024

4.

In the light of the admitted facts as the notice under Section 148A(b) of the Act is contrary to the mandate of the statutory provisions, the contention of the assessee that prejudice is caused by not adhering to the time limit under the provisions requires acceptance. Accordingly, notice under Section 148A(b) of the Act is set-aside and in the light of the same, the order under Section 148A(d) of the Act at Annexure- A1 as well as notice under Section 148 at Annexure-A2 and assessment order at Annexure-A3 are set-aside. Consequentially, penalty order at Annexure - A4, penalty notice at Annexures - A5, A6, A7 and A8 are set-aside.

5.

Revenue is at liberty to issue fresh notice under Section 148A(b) of the Act and resume proceedings after following procedure as per law.

6.

Accordingly, petition is disposed off.

SD/- JUDGE

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