PRATHAMIKA KRUSHI PATTINA SAHAKARA SANGHA NIYAMITHA vs. INCOME TAX OFFICER

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WP/14933/2024HC KarnatakaKAHC01028950202419 June 2024Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, taking into consideration the petitioner's submission that their income is essentially exempt and that they had incurred a loss for the relevant year, found it appropriate to grant the petitioner another opportunity. The Court decided to allow the petitioner to submit a more comprehensive reply to the notice under Section 148A(b). To facilitate this, the Court also permitted the petitioner to request the Department to explain the source of the information that led to the detailing of withdrawals and deposits in the notice. Consequently, the order passed under Section 148A(d), the notice under Section 148, the order under Section 147 read with Sections 144 and 144B, and the penalty notice were set aside. The matter was remitted back to the stage of submitting a reply to the notice under Section 148A(b), with all contentions preserved.

What were the facts?

The petitioner, Prathimika Krushi Pattina Sahakara Sangha Niyamitha, filed a writ petition challenging notices and orders related to reassessment proceedings for Assessment Year 2019-20. The petitioner questioned the validity of a notice under Section 148A(b) of the Income Tax Act, 1961, issued by the Income Tax Officer, Ward 1, Tumkur. The petitioner contended that the details of cash withdrawals and deposits mentioned in the notice lacked clarity regarding their source. Despite submitting a reply, an order under Section 148A(d) was passed, followed by further proceedings. The petitioner argued that the information in the notice was incorrect and that they could explain the cash transactions, which they claimed did not constitute taxable income. They also sought an opportunity to question the Department on the source of its information.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, issued for Assessment Year 2019-20, is valid, considering the petitioner's contention that it lacks clarity regarding the source of information about cash withdrawals and deposits. 2. Whether the petitioner should be granted an opportunity to explain the cash transactions and to call upon the Department to disclose the source of its information. Assessee's Arguments: The petitioner argued that the notice under Section 148A(b) lacked clarity regarding the source of information concerning cash withdrawals and deposits. They contended that the information provided was incorrect and that they could explain these transactions, asserting they did not represent income assessable to tax. The petitioner also sought an opportunity to question the Department on the origin of the information cited in the notice. Revenue's Arguments: The judgment does not record specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:21963 WP No. 14933 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. 14933 OF 2024 (T-IT) BETWEEN: 1. PRATHAMIKA KRUSHI PATTINA SAHAKARA SANGHA NIYAMITHA SANGHA NIYAMITHA DODDAGUNI, BETTADAGAKKU, AT BETTADAHALLI, TUMKUR-572 222. PAN: AAFAPO578G ALSO AT: OMKARAMURTY B S, AGED 49 YEARS, S/O SADASHIVAIAH, BETTADAHALLI, GUBBI TALUQ, TUMKUR-572 222. NO.DRTS/815/1976-77 DATED 25-9-1976 CO-OPERATIVE SOCIETY ACT, 1959. … PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. INCOME TAX OFFICER WARD 1 AND TPS, TUMKUR-572 103. 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:21963 WP No. 14933 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 COMMISSIONER OF INCOME TAX-2 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-2, BMTC BUILDING, KORAMANGALA, BANGALORE-560 095 … RESPONDENTS (BY SRI. E.I. SANMATHI., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 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 25/01/2023, BEARING DIN NO. ITBA/AST/F/148A(SCN)/2022-23/1049080926(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2019-20 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 order under Section 148-A(d) of the Income Tax Act, 1961 (for short 'the Act') at Annexure-A2. Petitioner has also challenged the notice under Section 148 of the Act at Annexure-A3; order passed under Section 147 read with

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NC: 2024:KHC:21963 WP No. 14933 of 2024 Sections 144 and 144B of the Act at Annexure-A4 and the penalty notice at Annexure-A5. 2. Learned counsel for the petitioner submits that notice under Section 148A(b) was issued and details of cash withdrawals and cash deposits have been mentioned, which however according to the petitioner lacks clarity regarding the source of such information. It is submitted that though the petitioner had made out a reply, an order was passed under Section 148A(d), after which proceedings have commenced. 3. It is the case of the petitioner that the information as made out in the notice extracted as Annexure, is incorrect and detailed explanation was made pointing out clarifications from petitioner's side. It is further submitted that the petitioner if granted an opportunity would be in a position to explain cash deposits and withdrawals as mentioned in the Annexure which does not constitute income assessable to tax.

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NC: 2024:KHC:21963 WP No. 14933 of 2024 4. Learned counsel for the petitioner has also sought for an opportunity to call upon the Department to explain the source of information contained in the Annexure to notice under Section 148A(b). 5. Taking note of the contention of the petitioner that the income of the petitioner is essentially exempt and in fact, the petitioner had undergone loss for the relevant year, it would be appropriate to afford another opportunity to the petitioner to make out a better reply to the notice under Section 148A(b) and to facilitate such opportunity, to afford the opportunity to call upon the Department to explain the source of information by virtue of which withdrawals and deposits are detailed in the Annexure. 6. Accordingly, the order Section 148-A(d) of the Act at Annexure-A2; notice under Section 148 of the Act at Annexure-A3; order passed under Section 147 read with Sections 144 and 144B of the Act at Annexure-A4 and the penalty notice at Annexure-A5 are set aside. The matter is

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NC: 2024:KHC:21963 WP No. 14933 of 2024 remitted to the stage of reply to the notice under Section 148A(b) of the Act. All contentions are kept open. 7. Petition is disposed off in light of the discussion and observations made above. Sd/- JUDGE VP

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