MUNISWAMAPPA JAYARAM vs. THE INCOME TAX OFFICER

PDF · subscribers
WP/14712/2024HC KarnatakaKAHC01028494202419 June 2024Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka set aside the order dated 23.03.2024 passed under Section 148A(d) of the Income Tax Act, 1961. The Court found that the petitioner's reply, which included an explanation for cash deposits and a computation of income, did not appear to have been taken note of or adverted to in the impugned order. The Court noted that the petitioner specifically contended that if his explanation were considered, the amount assessable to tax would be less than Rs. 50.00 lakhs, which would render the passing of an order under Section 148A(d) based on Section 149(1)(b) inappropriate. Therefore, the matter was remitted back to the respondent Authority for reconsideration. The Authority is directed to reconsider the petitioner's reply and pass a fresh order under Section 148A(d). The petitioner is granted liberty to substantiate his case by producing further documents and clarifications. All contentions are kept open. The petition is disposed of accordingly.

What were the facts?

The petitioner, Muniswamappa Jayaram, challenged notices and an order issued by the Income Tax Officer (ITO), Ward-3(2)(1), Bangalore, concerning Assessment Year 2017-2018. The challenge was to a notice dated 08.03.2024 under Section 148A(b) of the Income Tax Act, 1961, an order dated 23.03.2024 under Section 148A(d) of the Act, and a notice dated 23.03.2024 under Section 148 of the Act. The petitioner argued that his reply to the show cause notice, which included explanations for cash deposits and a computation of income, was not considered by the ITO. The petitioner contended that if his explanation were properly considered, the amount assessable to tax would be less than Rs. 50.00 lakhs, which would preclude the passing of an order under Section 148A(d) based on Section 149(1)(b).

What were the issues?

1. Whether the notice dated 08.03.2024 issued under Section 148A(b) of the Income Tax Act, 1961, and the subsequent order dated 23.03.2024 passed under Section 148A(d) of the Act, are valid, considering the petitioner's submission that his reply and computation of income were not adequately considered by the respondent authority? (Question of law and fact, concerning Section 148A and Section 149(1)(b)). Assessee's Contentions: - The petitioner argued that a detailed explanation regarding cash deposits and a computation of income were submitted in response to the show cause notice. - The petitioner contended that the impugned order under Section 148A(d) was passed without taking note of this explanation. - It was further argued that if the explanation were considered, the income assessable to tax would be less than Rs. 50.00 lakhs, thereby making the provisions of Section 149(1)(b) inapplicable and preventing the passing of an order under Section 148A(d). Revenue's Contentions: - The judgment records that the respondent authority, in its order dated 23.03.2024, stated that the assessee had not submitted any explanation/documents on the transaction of Rs. 73,24,975/-, and only submitted a computation of income for AY 2017-18.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:21935 WP No. 14712 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. 14712 OF 2024 (T-IT) BETWEEN: 1. MUNISWAMAPPA JAYARAM S/O. MUNISWAMAPPA, AGED ABOUT 63 YEARS, RESIDING AT NO.28, SRI VENKATESHA NILAYA, MUNISWAMAPPA GARDEN, CHUNCHAGHATTA, BANGALORE-560 062. … PETITIONER (BY SRI. RAMA MURTHY R.,ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD-3(2)(1), BMTC BULDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE-560 095. … RESPONDENT (BY SRI. THIRUMALESH M., ADVOCATE) ***

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO (A) QUASHING THE NOTICE DATED 08.03.2024 ISSUED U/S 148A(B) OF THE ACT, FOR THE ASSESSMENT YEAR 2017-2018 (ANNEXURE-A) (ITBA/AST/F/148A(SCN)2023-24/1062226028(1)) BY THE Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:21935 WP No. 14712 of 2024 RESPONDENT; (B) QUASHING THE ORDER DATED 23.03.2024 MADE U/S 148A(D) OF THE ACT, FOR THE ASSESSMENT YEAR 2017-2018 (ANNEXURE-C) [ITBA/AST/F/148A/2023- 24/1063245135(1)] PASSED BY THE RESPONDENT; (C) QUASHING THE NOTICE ISSUED R/S.148 OF THE ACT DATED 23.03.2024 FOR THE ASSESSMENT YEAR 2017-2018 (ANNEXURE-D) [ITBA/AST/S/148_1/2023-24/1063245321(1)] ISSUED BY THE RESPONDENT AND ETC.

THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has called in question the correctness of the order at Annexure-'C' dated 23.03.2024 passed under clause (d) of Section 148A of the Income Tax Act, 1961 ('the Act' for brevity) as well as the notice at Annexure-'A' dated 08.03.2024 issued under clause (b) of Section 148A of the Act. 2. It is submitted that insofar as notice issued under clause(b) of Section 148A of the Act, the petitioner had made out the reply, copy of the said reply is filed alongwith the memo before this Court. It is submitted that a detailed explanation has been made as regards the cash deposits.

It is further submitted that the

- 3 -

NC: 2024:KHC:21935 WP No. 14712 of 2024 computation of income was also made, which however has not been taken note of and the impugned order is passed under clause (d) of Section 148A of the Act. 3. Perused the impugned order at Annexure-'C' dated 23.03.2024. At para-6 of the order, it is observed as follows:- "6. In response to the show cause notice the assessee filed a reply dated 18-03-2024. In reply, the assessee has not submitted any explanation/documents on transaction of Rs.73,24,975/-. The assessee has submitted only computation of income for A.Y.2017-18." 4. Insofar as the contention of petitioner regarding the reply, a perusal of the reply filed alongwith the memo would indicate that the petitioner has made an explanation, which however does not appear to have been taken note of or adverted to in the impugned order. It is the specific case of petitioner that, if his explanation would be taken note of, the amount assessable to tax would be

- 4 -

NC: 2024:KHC:21935 WP No. 14712 of 2024 lesser than Rs.50.00 lakhs and accordingly, in terms of Section 149(1)(b), the question of passing an order under clause (d) of Section 148A would not arise. The said aspect requires reconsideration by the respondent Authority. 5. Note is made of the reply filed by the petitioner, as also the computation of total income and bank statements, copies of which are produced before this Court alongwith the memo which are stated to have been filed before the Assessing Officer. 6. Accordingly, the order at Annexure-'C' dated 23.03.2024 passed under clause (d) of Section 148A is set aside. The matter is remitted for reconsideration by the Authority who has to reconsider the reply of the petitioner and pass fresh order under clause (d) of Section 148A of the Act. The liberty is reserved to the petitioner to substantiate his case by producing further documents and

- 5 -

NC: 2024:KHC:21935 WP No. 14712 of 2024 clarifications as may be deemed fit. All contentions are kept open. Accordingly, the petition is disposed off. Sd/- JUDGE VGR

More judgments on Section 148A

All 3,543 judgments and leading authorities on Section 148A →

Recent GST High Court judgments

Search GST case law →