M/S A J DHANASHETTI AND CO., vs. THE INCOME-TAX OFFICER AND ANR

PDF · subscribers
WP/201063/2022HC KarnatakaKAHC03003301202214 November 2024Bench: S.R.KRISHNA KUMAR8 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition. It set aside the impugned assessment order dated 29.03.2022 (Annexure-G). The Court acknowledged the petitioner's contention that notices were sent to the email ID of the previous Chartered Accountant, leading to their inability to submit replies due to bona fide reasons, unavoidable circumstances, and sufficient cause. Adopting a justice-oriented approach, the Court deemed it appropriate to remit the matter back to the 2nd Respondent for reconsideration. The petitioner was granted liberty to submit replies to the notices dated 19.02.2022 and the show-cause notice dated 23.03.2022, along with relevant documents. The concerned respondent is to consider these submissions, provide a sufficient and reasonable opportunity to the petitioner, hear them, and then proceed in accordance with the law. The issue of the validity of the Section 148 notice was implicitly addressed by remitting the matter, allowing for a fresh adjudication.

What were the facts?

The petitioner, M/s. A.J. Dhanashetti & Co., a fertilizer dealer, filed a writ petition challenging a notice dated 31.03.2021 issued by the Income-Tax Officer (ITO), Ward-1 & TPS, Bijapur (2nd Respondent) under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-18. The petitioner also challenged the assessment order dated 29.03.2022 passed by the National Faceless Assessment Centre, Delhi (1st Respondent) under Section 147 read with Sections 144 and 144B of the Act for the same assessment year, which imposed a demand of Rs. 1,38,89,568/-. The petitioner contended that notices issued by the 2nd Respondent, including a notice dated 19.02.2022 under Section 142(1) and a show-cause notice dated 23.03.2022, were sent to the email ID of their former Chartered Accountant, preventing them from submitting replies. The Revenue supported the impugned order and sought dismissal of the petition.

What were the issues?

1. Whether the notice dated 31.03.2021 issued by the 2nd Respondent under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-18 is liable to be quashed? (Question of law and fact) 2. Whether the assessment order dated 29.03.2022 passed by the 1st Respondent under Section 147 read with Sections 144 and 144B of the Act for Assessment Year 2017-18 is liable to be quashed? (Question of law and fact) Assessee's Contentions: The petitioner argued that crucial notices, including the Section 142(1) notice dated 19.02.2022 and the show-cause notice dated 23.03.2022, were sent to the email address of their previous Chartered Accountant. Consequently, the petitioner was unable to submit timely replies due to non-receipt of these notices by their current representatives. They relied on affidavits from the former Chartered Accountant and the Managing Partner to support their claim of non-service. They sought an opportunity to rebut the reasons for issuing the Section 148 notice and to respond to the show-cause notice before a fresh assessment is made. Revenue's Contentions: The learned counsel for the respondents supported the impugned order and submitted that there was no merit in the petition and it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144,Section 144B,Section 142(1),Section 143(3)

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 14TH DAY OF NOVEMBER, 2024 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 201063 OF 2022 (T-IT)

BETWEEN:

M/S. A.J. DHANASHETTI & CO., FERTILIZER DEALERS, JOSHI BUILDING, BASAVESHWAR CIRCLE, NEAR BUS STAND, INDI - 586 209 (KARNATAKA) (PAN. AALFA3661J) REPRESENTED BY THE MANAGING PARTNER SRI AJITKUMAR S/O. ADINATH DHANASHETTI, AGED 65 YEARS …PETITIONER (BY SMT. JINITA CHETTERJEE, ADVOCATE)

AND:

1.

THE INCOME-TAX OFFICER INCOME-TAX DEPARTMENT NATIONAL FACELESS

Digitally signed by SUMITRA SHERIGAR Location: High Court Of Karnataka

- 2 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

ASSESSMENT CENTRE, DELHI – 110 001.

2.

THE INCOME-TAX OFFICER, WARD-1 & TPS, BIJAPUR – 586 101. …RESPONDENTS (BY SRI TIRUMALESH M., ADV.)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI OR A DIRECTION IN THE NATURE OF WRIT OF CERTIORARI QUASHING THE NOTICE DATED 31.03.2021 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 148 OF THE ACT, FOR THE ASSESSMENT YEAR 2017- 18 IN FILE DIN & NOTICE NO:ITBA/AST/S/148/2020- 21/1032067415(1) (ANNEXURE-A), AND ETC.

THIS PETITION, COMING ON FOR PRELIMIARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER (PER: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR)

1.

In this petition, the petitioner has sought for the following reliefs:

- 3 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

“(a) Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the notice dated 31.03.2021 issued by the 2nd Respondent under Section 148 of the Act for the assessment year 2017-18 in file DIN & Notice No: ITBA/AST/S/148/2020- 21/1032067415(1) (ANNEXURE-A); (b) issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the assessment order dated 29.03.2022 passed by the 1st Respondent under Section 147 rws 144 rws 144B of the Act for the assessment year 2017-18 in file DIN ITBA/AST/S/147/2021-22/1041949757(1) (ΑΝNEXURE- G); (c) issue a Writ of Prohibition or a direction in the nature of Writ of Prohibition restraining the Respondents from proceeding to recover the demand of Rs.1,38,89,568/- in pursuance of the assessment order dated 29.03.2022 passed under Section 147 rws 144 rws 144B of the Act for the assessment year 2017-18 file DIN ITBA/AST/S/147/2021-22/1041949757(1) (ANNEXURE-G); (d) issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus directing the 1st Respondent to give opportunity to the Petitioner to rebut the reasons recorded for issuing the notice under Section 148 of the Act, after providing the reasons and thereafter to adjudicate before making fresh assessment;

- 4 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

(e) If the Hon'ble Court holds that the proceedings under Section 148 of the Act were valid, then, the assessment order is required to be quashed and the assessing officer should be directed to give adequate opportunity to the Petitioner to respond to the show cause notice dated 23.03.2022 issued in file DIN: ITBA / AST /F /144 (SCN) / 2021-22 / 1041399807 (1) (ANNEXURE-F) and to pass an appropriate order under Section 143(3) of the Act for the relevant assessment year.”

2.

Heard the learned counsel for the petitioner, the learned counsel for the respondents, and perused the material on record.

3.

A perusal of the material on record will indicate that it is the specific contention of the petitioner that pursuant to the detailed reply dated 30.08.2021 issued by the petitioner, respondent No.2 Assessment Officer issued a notice dated 19.02.2022 under Section 142(1) of the Income Tax Act, 1961, to the petitioner for the assessment year 2017-18.

4.

It is contended that the said notice dated 19.02.2022 issued by respondent No.2 was addressed to

- 5 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

the email ID of the earlier Chartered Accountant of the petitioner and consequently petitioner was not in a position to submit a reply, since his present Chartered Accountant did not receive the said notice and could not submit his reply to the same. It is submitted that even the subsequent show-cause-notice at Annexure-F, dated 23.03.2022 was also issued by respondent No.2 to the email ID to the earlier Chartered Accountant of the petitioner, as a result of which, the petitioner could not submit reply to the said show-cause-notice also. It is therefore contended that the impugned assessment order at Annexure – G dated 29.03.2022 deserves to be quashed and the matter remitted back to the 2nd respondent for re-consideration afresh in accordance with law.

5.

The petitioner has also filed an affidavit of the earlier Chartered Accountant and the Managing Partner of the petitioner dated 12.04.2022 in order to substantiate

- 6 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

his contention that the notices were not served upon the petitioners. 6. Per contra, learned counsel for respondents- Revenue would support impugned order and submit that there is no merit in the petition and the same is liable to be dismissed.

7.

A perusal of the material on record, in particular, the impugned order will indicate that the 2nd respondent has recorded the finding that the petitioner had not submitted his reply to the notice dated 19.02.2022 and the show-cause-notice dated 23.03.2022 as evident from page 4 of the impugned order. It is therefore clear that the petitioner did not submit his reply to the aforesaid notices and in the light of the specific assertion on the part of the petitioner that the said notices were sent to the email ID of the previous Chartered Accountant and the since he did not receive the said notices, and could not reply to the said notices due to

- 7 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

bona fide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt justice oriented approach and set aside the impugned assessment order at Annexure – G dated 29.03.2022 and remit the matter back to the 2nd respondent for reconsideration afresh in accordance with law.

8.

In the result, the writ petition is allowed. The impugned order at Annexure – G dated 29.03.2022 is hereby set aside.

9.

Matter is remitted back to the concerned respondent for reconsideration afresh in accordance with law.

10.

Liberty is reserved in favour of the petitioner to submit replies to the notices dated 19.02.2022 and the show-cause-notices dated 23.03.2022 along with relevant documents, which shall be considered by the concerned respondent, who shall consider the same and provide

- 8 -

NC: 2024:KHC-K:8575 WP No. 201063 of 2022

sufficient and reasonable opportunity to the petitioner and hearing him and proceed further in accordance with law.

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

SBS List No.: 1 Sl No.: 44

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →