YBRANT ENGINEERING AND CONSTRUCTIONS PRIVATE LIMITED vs. THE ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER

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WP/2455/2025HC KarnatakaKAHC01004510202513 February 2025Bench: S.G.PANDIT7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the petitioner-company ought to be given an opportunity to file objections and participate in the proceedings. The court noted that the notice under Section 148A(b) was dated March 18, 2023, which was subsequent to the death of the director on September 5, 2022. If notices were sent to the deceased director's email, the petitioner would have no knowledge. Since the proceedings were ex-parte and involved substantial rights of the petitioner, the court deemed it appropriate to provide an opportunity. Consequently, several notices and orders (Annexures C, D, E, F, G, H, J, K, L) were quashed, and the matter was remanded to the stage of filing objections to the notice under Section 148A(b). The court also directed the petitioner to pre-deposit Rs. 3 Crores out of the Rs. 132 Crores tax demand, granting four weeks to file objections.

What were the facts?

The petitioner, Ybrant Engineering and Constructions Private Limited, filed a writ petition before the High Court of Karnataka challenging notices issued under Section 148A(b) and the consequential order under Section 148A(d) of the Income Tax Act, 1961, for Assessment Year 2019-20. The company contended that its director, Mr. Sreegiriraju Jagan Mohan Rao, who handled tax matters including filing returns, passed away on September 5, 2022. Consequently, the company was unaware of the notices sent to the deceased director's email address and could not file objections or participate in the proceedings. The revenue acknowledged that the petitioner failed to file objections and participate, leading to ex-parte orders.

What were the issues?

1. Whether the petitioner should be granted an opportunity to file objections and participate in the proceedings initiated under Section 148A(b) of the Income Tax Act, 1961, and subsequent proceedings, given the death of its director who managed tax matters. Assessee's contention: The petitioner argued that due to the death of its director, who was responsible for tax filings and whose email address was used for communication, the company had no knowledge of the notices issued under Section 148A(b). Therefore, it could not file objections or participate in the proceedings. They sought an opportunity to do so. Revenue's contention: The revenue submitted that while the petitioner failed to file objections and participate, the notices were indeed issued to the petitioner-company, and the subsequent orders were ex-parte.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:6547 WP No. 2455 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 2455 OF 2025 (T-IT) BETWEEN: YBRANT ENGINEERING AND CONSTRUCTIONS PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.71, CHINMAYEEN DOMLUR 2ND STAGE, 4TH MAIN, 1ST CROSS, BANGALORE -560071, REP. BY ITS DIRECTOR BK SATHYANARAYANA RAO. …PETITIONER (BY MS. MANASA ANANTHAN, ADV.)

AND: 1. THE ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE ASSESSMENT UNIT, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003.

2.

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 7(1)(1) 2ND FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BENGALURU - 560 095.

3.

THE PRINCIPAL COMMISSIONER OF INCOME-TAX- II, 5TH FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD,

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2025:KHC:6547 WP No. 2455 of 2025

KORAMANGALA, BENGALURU - 560 095. …RESPONDENTS

(BY SRI. E.I SAMMATHI AND SRI M DILIP, ADVS.)

THIS PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO (A) QUASHING THE NOTICE DATED 18.03.2023 BEARING NO. ITBA/ AST/ F/ 148A(SCN)/ 2022- 23/ 1050946233(1) (ANNEXURE C) ISSUED BY THE 2ND RESPONDENT UNDER SECTION 148A(B) OF THE ACT, FOR THE ASSESSMENT YEAR 2019-20 AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.G.PANDIT

ORAL ORDER

Heard learned counsel Ms.Manasa Ananthan for petitioner and learned counsel Sri.Sanmathi.E.I., and Sri.M.Dilip, learned counsel for respondent Nos.1 to 3. Perused the writ petition papers.

2.

Learned counsel for the petitioner would submit that petitioner is before this Court questioning the notices issued under Section 148A(b) of the Income Tax Act, 1961 (for short, ‘1961 Act’) as well as order passed under Section 148A(d) of 1961 Act along with consequential notices and orders. It is the submission of learned counsel for the petitioner that the dispute in the present writ

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NC: 2025:KHC:6547 WP No. 2455 of 2025

petition relates to the assessment year 2019-20 and one Mr.Sreegiriraju Jagan Mohan Rao, one of the Directors of the petitioner-company was looking after the tax matters including filing of return of income. It is stated that the said Director died on 05.09.2022 and death certificate is produced at Annexure-B. To substantiate the contention that said Director was looking after filing of returns, learned counsel invites attention of this Court to Annexure-A, wherein the e-mail of the said Director is shown. It is submitted that since the said Director was looking after the tax matters and who was filing return of income of the petitioner-company has expired, the petitioner-company could not file returns for the assessment year 2019-20 and all notices sent to the e- mail address of the deceased Director had not come to the notice of the petitioner-company. Therefore, it is submitted that the petitioner-company could not file objections and to participate in the proceedings initiated by issuing notice under Section 148A(b) of 1961 Act. Therefore, learned counsel would pray for an opportunity

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NC: 2025:KHC:6547 WP No. 2455 of 2025

to file objections and participate in the proceedings initiated under Section 148A(b) of 1961 Act.

3.

Per contra, learned counsel Sri.M.Dilip, for Sri.E.I.Sanmathi would submit that it is not that the notice was not issued to the petitioner-company, but the petitioner-company failed to file objections and participate in the proceedings. But, he submits that the order passed subsequent to issuance of notice under Section 148A(b) of 1961 Act are all exparte orders.

4.

Having heard the learned counsel appearing for the parties and on perusal of the entire writ petition papers, I am of the view that the petitioner-company ought to be given an opportunity to file objections and participate in the proceedings initiated by issuance of notice under Section 148A(b) of 1961 Act and further proceedings.

5.

Annexure-A, return of income filed by the company for the assessment year 2019-20 indicates the e-

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NC: 2025:KHC:6547 WP No. 2455 of 2025

mail address of the deceased Director Mr.Sreegiriraju Jagan Mohan Rao. Said Director died on 05.09.2022, as evidenced from Annexure-B – death certificate. The notice issued under Clause (b) of Section 148A of 1961 Act is dated 18.03.2023 i.e., subsequent to the death of the above stated Director of the petitioner-company. If the notices were sent to the e-mail address of the deceased Director, petitioner-company would have no knowledge of the proceedings initiated by issuing notices under Section 148A(b) of 1961 Act. As the proceedings by issuance of notice under Section 148A(b) of 1961 Act and further proceedings are exparte and since the substantial right of the petitioner is involved, I deem it appropriate to provide an opportunity to the petitioner-company to file objections and participate in the proceedings.

6.

In the above circumstances, the following: ORDER a) Annexure-D order bearing No.ITBA/AST/F/148A/ 2022-23/1051734732(1) dated 31.03.2023;

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NC: 2025:KHC:6547 WP No. 2455 of 2025

Annexure-E notice bearing No.ITBA/AST/S/148_1/ 2022-23/1051734823(1) dated 31.03.2023; Annexure-F order bearing No.ITBA/AST/147/2023- 24/1061567569(1) dated 27.02.2024; Annexure-G demand notice bearing No.ITBA/AST/S/156/2023- 24/1061567666(1) dated 27.02.2024; Annexure-H order bearing No.ITBA/PNL/S/156/2024- 25/1066266703(1) dated 28.06.2024; Annexure-J demand notice bearing No.ITBA/PNL/S/156/2024- 25/1066266703(1) dated 28.06.2024; Annexure-K order bearing No.ITBA/PNL/F/272A(1)(d)/2024- 25/1066271738(1) dated 28.06.2024; and Annexure-L demand notice bearing No.itba/pnl/s/156/2024-25/1066271690(1) DATED 28.06.2024 are quashed.

b) The matter is remanded to the respondent No.2 to the stage of filing objections to notice issued under Clause (b) of Section 148A of 1961 Act (Annexure-C).

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NC: 2025:KHC:6547 WP No. 2455 of 2025

b) Since the tax demand is about Rs.132 Crores, I deem it appropriate to direct the petitioner- company to pre-deposit a sum of Rs.3 Crores before the second respondent and four weeks time is granted to file objections to the notice at Annexure- C. Thereafter, respondent No.2 shall proceed further in accordance with law.

c) With the above, writ petition stands disposed of.

Sd/- (S.G.PANDIT) JUDGE

NC CT:bms List No.: 1 Sl No.: 26

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