SURYA CHANDRA PRASAD vs. INCOME TAX OFFICER

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WP/24235/2024HC KarnatakaKAHC01050100202416 April 2025Bench: S.R.KRISHNA KUMAR7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court, adopting a justice-oriented approach, allowed the petition. It acknowledged that while there were contentions regarding the service of notice, it was undisputed that the petitioner did not submit a reply to the show cause notice, leading to an ex-parte adjudication. The Court found it just and appropriate to set aside the impugned orders (Annexures-B, C, J, J1, N, and P) and remit the matter back to the respondent. The remittance is to the stage of the petitioner submitting a reply to the notice under Section 148A(b) (Annexure-A dated 01.02.2023), allowing the petitioner an opportunity to contest the proceedings in accordance with law. Liberty was reserved for the petitioner to submit replies, pleadings, and documents. The Court did not explicitly leave any issue undecided, but the primary focus was on providing an opportunity for a hearing.

What were the facts?

The petitioner, Surya Chandra Prasad, filed a writ petition challenging notices and orders issued by the Income Tax Officer and the National Faceless Assessment Centre for Assessment Year 2016-17. The impugned actions include a notice under Section 148A(b) dated 01.02.2023, an order under Section 148A(d) dated 15.03.2023, a notice under Section 148 dated 15.03.2023, an assessment order under Section 147 read with Section 144 and 144B dated 26.03.2024, and a notice of demand under Section 156 dated 26.03.2024. The petitioner also challenged penalty show cause notices dated 15.05.2024 under Sections 271(1)(b) and 271(1)(c). The core of the petitioner's grievance is that the initial notice under Section 148A(b) was not received by him, leading to an ex-parte adjudication.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, was properly served on the petitioner, and if not, whether the subsequent proceedings are vitiated. Assessee's Contention: The petitioner argued that the notice under Section 148A(b) was not received by him as it was delivered to his employee, who failed to hand it over. Consequently, the petitioner could not contest the proceedings due to bonafide reasons, unavoidable circumstances, and sufficient cause, necessitating a setting aside of the order and remittance for fresh consideration. Revenue's Contention: The revenue contended that the notice under Section 148A(b) was received by the petitioner's wife on his behalf, and therefore, there was proper and sufficient service of notice. The petitioner is not entitled to any relief.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 144B,Section 156,Section 271(1)(b),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:15708 WP No. 24235 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 24235 OF 2024 (T-IT) BETWEEN: SURYA CHANDRA PRASAD S/O. K. NARAYANA KAMATH AGED ABOUT 48 YEARS CHANDAN BHAG, DHARMASTALA NIL KAMATH RESTAURANT BELTHANGADY TALUK DAKSHINA KANNADA KARNATAKA - 574 216 PAN NO.AVUPK7571R …PETITIONER (BY SRI. BALRAM R RAO., ADVOCATE) AND: 1. INCOME TAX OFFICER WARD1, RADHIKA COMPLEX COURT ROAD, PUTTUR KARNATAKA - 574 201

2.

NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT, DELHI II FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI - 110 003 …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA CALLING FOR THE RECORDS OF THE PETITIONERS CASE AND AFTER EXAMINING THE LEGALITY AND

Digitally signed by NANDINI B G Location: High Court of Karnataka

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NC: 2025:KHC:15708 WP No. 24235 of 2024

VALIDITY THEREOF BE PLEASED TO QUASH AND SET ASIDE THE IMPUGNED NOTICE PASSED UNDER CLAUSE (B) OF SECTION 148A OF THE ACT DATED 01.02.2023 IN DIN AND NOTICE NO. ITBA/AST/F/148A(SCN) 2022-23/ 1049330648(1) (ANNEXURE A), ORDER PASSED UNDER CLAUSE (D) OF SECTION 148A OF THE ACT DATED 15.03.2023 IN DIN AND ORDER NO. ITBA/AST/F/148A/2022-23/1050781862 (1) (ANNEXURE -B) AS WELL AS NOTICE DATED 15.03.2023 ISSUED UNDER SECTION 148 OF THE ACT IN DIN AND NOTICE NO. ITBA/AST/S/148_1/2022-23/1050783375 (1) (ANNEXURE - C) PASSED AS WELL AS IMPUGNED ORDER PASSED UNDER SECTION 147 R.W.S. 144. R.W.S. 144B OF THE ACT DT. 26.03.2024 IN DIN AND NOTICE NO. IT- BA/AST/S/147/2023-24/1063407296 (1) (ANNEXURE-J) AS WELL AS NOTICE OF DEMAND ISSUED UNDER SECTION 156 OF THE ACT DATED 26.03.2024 IN DIN AND NOTICE NO. ITBA/AST/S/156/2023- 24/1063407399(1) (ANNEXURE J1) BY THE 1ST AND 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2016-17, AND ETC.,

THIS WRIT 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:

"WHEREFORE, the Petitioner therefore prays that this Hon'ble Court may be pleased to: 1. Issue a Writ of Certiorari or a writ in the natureof Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitutionof India calling for the records of the Petitioner'scase and after examining the legality and validity thereof be pleased to quash and set aside the impugned notice passed under Clause (b) of

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NC: 2025:KHC:15708 WP No. 24235 of 2024

section 148A of the Act dated 01.02.2023 in DIN and Notice No. ITBA/AST/F/148A(SCN) 2022- 23/1049330648(1) [ANNEXURE - A], order passed under clause (d) of section 148A of the Act dated 15.03.2023 in DIN & Order No: ITBA/AST/F/148A/2022-23/1050781862 (1) [ANNEXURE -B] as well as notice dated 15.03.2023 issued under section 148 of the Act in DIN & Notice No.ITBA/AST/S/148_1/2022-23/1050783375 (1)[ANNEXURE - C] passed as well as impugned order passed under section 147 r.w.s. 144. r.w.s. 144B of the Act dt. 26.03.2024 In DIN & Notice No. ITBA/AST/S/147/2023- 24/1063407296 (1)[ANNEXURE - J] as well as notice of demand issued under section 156 of the Act dated 26.03.2024 in DIN & Notice No. ITBA/AST/S/156/2023- 24/1063407399 (1) [ANNEXURE J1] by the 1st and 2nd Respondent for the Assessment Year 2016-17, and ii. A Writ of Mandamus or a Writ in the nature of Mandamus, or any other appropriate Writ, Order or Direction under Article 226 of the Constitution of India ordering and directing the Respondents by themselves, their subordinate, servants and agents to withdraw and cancel the impugned order passed under section 147 r.w.s. 144. r.w.s. 144B of the Act dt. 26.03.2024 in DIN & Notice ITBA/AST/S/147/2023-24/1063407296 No. (1) [ANNEXURE-J] as well as notice of demand issued under section 156 of the Act dated 26.03.2024 in DIN & Notice No. ITBA/AST/S/156/2023-24/1063407399 (1) [ANNEXURE - J1] as well as the show cause notice for penalty issued under section 271(1)(b) of the Act dt. 15.05.2024 in DIN & Notice No.

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NC: 2025:KHC:15708 WP No. 24235 of 2024

ITBA/PNL/F/271(1)(b)/2024-25/1064883864(1) [ANNEXURE-N] as well as the show cause notice for penalty issued under section 271(1)(c) of the Act dt. 15.05.2024 in DIN & Notice No. ITBA/PNL/F/271(1)(c)/2024-25/1064883911(1) [ANNEXURE-P] passed by the 2nd Respondent for the Assessment Year 2016-2017, iii. A Writ of Prohibition or a Writ in the nature of Prohibition or any other appropriate writ, orderor direction under Article 226 of the Constitutionof India prohibiting and restraining the Respondents by themselves, their subordinate, servants and agents from taking any action in furtherance or consequent to impugned order passed under section 147 r.w.s. 144. r.w.s. 144B of the Act dt. 26.03.2024 in DIN & Notice No. ITBA/AST/S/147/2023- 24/1063407296 (1) [ANNEXURE - J] as well as notice of demand issued under section 156 of the Act dated 26.03.2024 in DIN & Notice No. ITBA/AST/S/156/2023- 24/1063407399 (1) [ANNEXURE - J1] as well as the show cause notice for penalty issued under section 271(1)(b) of the Act dt. 15.05.2024 in DIN & Notice No. ITBA/PNL/F/271(1)(b)/2024-25/1064883864(1) [ANNEXURE-N] as well as the show cause notice for penalty issued under section 271(1)(c) of the Act dt. 15.05.2024 in DIN & Notice No. ITBA/PNL/F/271(1)(c)/2024-25/1064883911(1) [ANNEXURE-P] passed by the 2nd Respondent for the Assessment Year 2016-2017 and iv. Grant the interim relief in terms of prayer (iii) above, and

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NC: 2025:KHC:15708 WP No. 24235 of 2024

v. Issue such other order, writ or direction as this Hon'ble Court deems fit; and vi. Direct the Respondents to pay the costs of this Writ Petition."

2.

A perusal of the material on record would indicate that on 01.02.2023, the first respondent issued notice to the petitioner under Section 148A(b) of the Income Tax Act (for short 'the IT Act'), to which, the petitioner did not submit any reply and accordingly, the respondent proceeded further and passed the impugned order under Section 148A(d) dated 15.03.2023 followed by a notice under Section 148 and subsequent intimation/notices culminating in the impugned assessment order dated 26.03.2024, all of which, are assailed in the present petition.

3.

It is the specific contention of the petitioner that the notice under Section 148A(b) was not received by the petitioner, since the same was delivered to his employee, who did not hand over the same to the petitioner and as such the petitioner was not in a position to contest the proceedings due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, it is necessary that the impugned order is to be set aside and the matter has to be remitted back to respondent for re-consideration

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NC: 2025:KHC:15708 WP No. 24235 of 2024

afresh to the stage of the petitioner submitting reply to the show cause notice and to proceed further in accordance with law.

4.

Per contra, learned counsel for the respondent submits that the notice under Section 148A(b) was received by the wife of the petitioner on behalf of her husband, the petitioner herein and it cannot be said that there is no proper or sufficient service of notice on the petitioner, who is not entitled to any relief in the present petition.

5.

A perusal of the material on record would indicate that though there are several contentions urged by both sides as regards service of notice or sufficiency of service of notice upon the petitioner or to his wife/employee, it is an undisputed fact borne out from the material on record that the petitioner did not submit any reply to the impugned show cause notice which culminated in the impugned exparte adjudication assessment order followed by subsequent notices, penalty order etc.,

6.

Under these circumstances, by adopting justice orientated approach and in order to provide an opportunity to the petitioner to submit his reply to the notice under Section 148A(b)

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NC: 2025:KHC:15708 WP No. 24235 of 2024

and to contest the proceedings in accordance with law, I deem it just and appropriate to set aside the impugned order at Annexures- B, C, J, J1, N and P and remit the matter back to the respondent for re-consideration afresh to the stage of the petitioner submitting reply to the show cause notice under Section 148A(b) and proceed further in accordance with law.

7.

In the result, pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned orders at Annexures-B, C, J, J1, N and P are set aside. (iii) The matter is remitted back to the respondent to the stage of petitioner submitting reply to Annexure-A dated 01.02.2023 and proceed further in accordance with law. (iv) Liberty is reserved in favour of the petitioner to submit reply, pleadings, documents etc.

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

*bgn/- CT:VS/List No.: 1 Sl No.: 38

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