SANDEEP MUNIRAJ REDDY vs. THE INCOME TAX OFFICER

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WP/14723/2024HC KarnatakaKAHC01028844202403 July 2024Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka, while perusing the calculation sheet and considering the submissions, found merit in the petitioner's case for an opportunity to respond to the notice under Section 148-A(b). Consequently, the Court set aside the order under Section 148-A(d), the notice under Section 148, the order under Section 147 read with Sections 144 and 144B, and the penalty notices. The matter was remitted back to the stage of allowing the petitioner to file a reply to the notice under Section 148-A(b). All contentions on merits were kept open for consideration by the authorities. The operative direction was to permit the petitioner to make his reply and for the authorities to proceed thereafter.

What were the facts?

The petitioner, Sandeep Muniraj Reddy, filed a writ petition challenging notices and orders issued under the Income Tax Act, 1961, for Assessment Year 2018-19. The petitioner contended that he could not respond to the notice under Section 148-A(b) because his email ID on record with the Income Tax Department was outdated and had changed. Consequently, the subsequent proceedings, including the order under Section 148-A(d), the notice under Section 148, the order under Section 147 read with Sections 144 and 144B, and penalty notices, were passed without his participation. The petitioner also pointed out that the assessing authority's observation that returns were not filed was incorrect, as returns had been filed, albeit found to be defective later. The petitioner argued that the details of capital gains computation should have been considered.

What were the issues?

1. Whether the notice under Section 148-A(b) of the Income Tax Act, 1961, and the subsequent proceedings are liable to be quashed due to the petitioner's inability to respond owing to an outdated email ID on record with the Department? (Mixed question of law and fact) Assessee's Contentions: - The petitioner could not reply to the notice under Section 148-A(b) because his email ID with the Department was not updated and had changed. - As a result, the order under Section 148-A(d) and subsequent proceedings were passed without his participation. - Returns were filed, contrary to the assessing authority's observation, although they were later found to be defective. - Details of capital gains computation ought to have been considered. Revenue's Contentions: - The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 148-A,Section 148,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:25044 WP No. 14723 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14723 OF 2024 (T-IT) BETWEEN: 1. SANDEEP MUNIRAJ REDDY 33 YEARS NO.44, "DODDA MANE" DODDA APPAYANNA REDDY LAYOUT DODDA BANASWADI BANGALORE - 560 045 PAN: BZYPM2990K PREVIOUSLY AT: SANDEEP MUNIRAJ REDDY MUNIRAJ REDDY BUILDING BODDA MANE DODDA APPAYANA REDDY LAYOUT DODDA BANASH BANGALORE - 560 043 … PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD-1(1)(1) BANGALORE - 560 095 2. NATIONAL FACELESS ASSESSMENT CENTRE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:25044 WP No. 14723 of 2024 INCOME TAX OFFICER INCOME TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO. 401, 2ND FLOOR, E -RAMP JAWAHARLAL NEHRU STADIUM DELHI - 110 003 3. THE PRINCIPAL COMMISSIOENR OF INCOME TAX-1 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 BMTC BUILDING KORAMANGALA BANGALORE - 560 095 … RESPONDENTS (BY SRI. M. DILIP, JUNIOR STANDING COUNSEL)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO I) QUASHING THE NOTICE UNDER SECTION 148(B) OF THE ACT, DATED 2203/2022 BEARING DIN NO.ITBA/AST/F/148A(SCN)/2021- 22/1041244477(1), ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

Petitioner has called in question the validity of the notice under Section 148-A(b) of the Income Tax Act, 1961 (for short 'the Act') at Annexure-A; order under

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NC: 2024:KHC:25044 WP No. 14723 of 2024 Section 148-A(d) of the Act at Annexure-A1; notice under Section 148 of the Act at Annexure-A2; order passed under Section 147 read with Sections 144, 144B of the Act at Annexure-A3 and the penalty notices at Annexures-A4 and A5. 2. It is the case of the petitioner that though the notice under Section 148-A(b) was issued, the petitioner could not reply as the email-ID of the assessee was not updated and it stood changed from the earlier one as was available with the Department. It is submitted that consequently, the order passed under Section 148-A(d) and other proceedings pursuant thereto have culminated without the participation of the petitioner. 3. It is pointed out that on merits as well, the assessing authority at Para No. 3.2 of the order at Annexure-A3 has observed that returns have not been filed, while the petitioner in effect has filed the returns as is evidenced at Annexures-B and C though subsequently, it was found out that the same were defective. Even

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NC: 2024:KHC:25044 WP No. 14723 of 2024 otherwise, it is stated that though the details of computation of capital gains having been made as noticed by the assessing officer, the same ought to have been taken note of in an appropriate manner. 4. Taking note of the submission made and having prima facie perused the calculation sheet, case is made out for affording an opportunity to the petitioner to make out his reply to the notice under Section 148-A(b)of the Act at Annexure-A and to permit the authorities to proceed therefrom. 5. Accordingly, the order under Section 148-A(d) of the Act at Annexure-A1; notice under Section 148 of the Act at Annexure-A2; order passed under Section 147 read with Sections 144, 144B of the Act at Annexure-A3 and the penalty notices at Annexures-A4 and A5 are set aside. The matter is remitted back to the stage of reply to the notice under Section 148-A(b) of the Act at Annexure-A. All contentions on merits are kept open.

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NC: 2024:KHC:25044 WP No. 14723 of 2024 6. Writ petition is accordingly disposed off. Sd/- JUDGE VP

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