MYSORE CO OPERATIVE DEPARTMENTAL EMPLOYEES vs. INCOME TAX OFFICER

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WP/19508/2024HC KarnatakaKAHC01041533202414 August 2024Bench: S.R.KRISHNA KUMAR7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition. It was undisputed that the petitioner had not submitted a reply to the notice under Section 148A(b). However, considering the petitioner's assertion that their failure to respond was due to bonafide reasons, unavoidable circumstances, and sufficient cause, the Court deemed it appropriate to grant one more opportunity. The Court set aside the impugned order dated March 31, 2023, passed under Section 148A(d), and subsequent notices/orders. The matter was remitted back to the Income Tax Officer (Respondent No. 1) for reconsideration from the stage of submitting a reply to the Section 148A(b) notice. The petitioner was granted liberty to submit additional pleadings and documents, which the respondent was directed to consider before proceeding in accordance with the law. The Court expressly left undecided any issues related to the merits of the assessment itself.

What were the facts?

The petitioner, Mysore Co-operative Departmental Employees House Building Co-operative Society Ltd., filed a writ petition before the High Court of Karnataka challenging several notices and orders issued by the Income Tax Department for the assessment year 2019-20. The primary contention of the petitioner was that they did not receive the notice under Section 148A(b) of the Income Tax Act, 1961, dated February 17, 2023, and therefore, could not submit a reply. The petitioner claimed this omission was due to bonafide reasons and unavoidable circumstances, seeking an opportunity to respond. The respondents argued that the petition lacked merit. The High Court noted that it was undisputed that the petitioner had not submitted a reply to the Section 148A(b) notice.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, dated February 17, 2023, was duly served on the petitioner, and if not, whether the petitioner had sufficient cause for not responding to it? Assessee's Contention: The petitioner argued that they did not receive the notice under Section 148A(b) and were unaware of it, preventing them from submitting a reply. They claimed this was due to bonafide reasons, unavoidable circumstances, and sufficient cause, and sought a fresh opportunity to respond. Revenue's Contention: The revenue contended that the petition had no merit and was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 151,Section 147,Section 144B,Section 271AAC(1),Section 270A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:32965 WP No. 19508 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 19508 OF 2024 (T-IT) BETWEEN:

MYSORE CO OPERATIVE DEPARTMENTAL EMPLOYEES HOUSE BUILIDNG CO OPERATIVE SOCEITY LTD REGISTERED UNDER SECTION 7 OF THE MYSORE CO-OPERATIVE SOCIETIES ACT, 1959 OFFICE OF THE DEPUTY REGISTRAR OF CO OPERATIVE, SOCIETIES PREMISES, P ALACE OFFICES BUILDING, MYSORE-570024, PAN AAGAM6370C ALSO AT RAJU, AGED 63 YEARS, S/O LATE CHANNEGOWDA, RESIDING AT NO.479, 7TH MAIN, 1ST STAGE, VIJAYANAGARA, MYSORE-570017 …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND:

1.

INCOME TAX OFFICER WARD - 1(1), MYSORE 570008.

2.

NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT,

Digitally signed by Vandana S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:32965 WP No. 19508 of 2024

MINISTRY OF FINANCE ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003

3.

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

THIS WP IS FILED UNDER ARTICLES 226 AN D227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE UNDER SECTION 148A(B) OF THE ACT, DATED 17/02/2023 BEARING NO.ITBA/AST/F/148A(SCN)/2022- 23/1049866269(1), DIN ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2019-20 HEREIN MARKED AS ANNEXURE - A; QUASH THE ORDER UNDER SECTION 148A(D) OF THE ACT, DATED 31/03/2023, BEARING DIN NO.ITBA/AST/F/148A/2022-23/1051736825(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2019-20 HEREIN MARKED AS ANNEXURE A1; QUASH THE NOTICE UNDER SECTION 148 OF THE ACT DATED 31/03/2023 BEARING DIN NO. ITBA/AST/S/148.1/2022-23/1051736941(1)

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NC: 2024:KHC:32965 WP No. 19508 of 2024

ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2019-20 HEREIN MARKED AS ANNEXURE A2. AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks 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 17/02/2023 bearing DIN No. ITBA/AST/F/148A(SCN)/2022-23/1049866269(1), issued by the Respondent No.1 for the assessment year 2019-20 herein marked as Annexure - A.

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 31/03/2023, bearing DIN No.ITBA/AST/F/148A/2022-23/1051736825(1) issued by the Respondent No.1 for the assessment year 2019-20 herein marked as Annexure - A1.

iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148 of the Act dated 31/03/2023 bearing DIN No.

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NC: 2024:KHC:32965 WP No. 19508 of 2024

ITBA/AST/S/148_1/2022-23/1051736941(1) issued by the Respondent No.1 for the assessment year 2019-20 herein marked as Annexure - A2.

iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the approval order under Section 151 of the Act dated 21/03/2023 bearing DIN No. ITBA/AST/S/118/2022-23/1051046372(1), issued by the Respondent No.3 for the assessment year 2019-20 herein marked as Annexure - A3.

v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order passed Under section 147 r.w.s 144B dated 29/12/2023 bearing DIN No.ITBA/AST/S/147/2023-24/1059202763(1) issued by the Respondent No. 2 for the assessment year 2019-20 herein marked as Annexure - A4.

vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under section 271AAC(1) of the Act dated 13/06/2024 bearing DIN No. ITBA/PNL/F/271AAC(1)/2024-25/1065652725(1), issued by the Respondent No.2 for the assessment year 2019-20 herein marked as Annexure - A5.

vii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under Section 270A of the Act dated 10/06/2024 bearing DIN No. ITBA/PNL/F/270A/2024-25/1065503544(1), issued by the Respondent No.2 for the assessment year 2019-20 herein marked as Annexure - A6."

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NC: 2024:KHC:32965 WP No. 19508 of 2024

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 17.02.2023 was not received by petitioner and it 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 the respondents may be directed to proceed further in accordance with law.

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NC: 2024:KHC:32965 WP No. 19508 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 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, petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned order at Annexure – A1 dated 31.03.2023 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, I pass the following:

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NC: 2024:KHC:32965 WP No. 19508 of 2024

ORDER (i) The petition is hereby allowed. (ii) Impugned notices/orders at Annexures A, A1, A2, A3, A4, A5 and A6 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 17.02.2023.

(iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the respondent, who shall consider the same and proceed further in accordance with law.

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

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