NISARGA VIVIDODESHA SAHAKARA SANGA (R) vs. INCOME TAX OFFICER

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WP/24842/2024HC KarnatakaKAHC01052242202411 September 2024Bench: S.R.KRISHNA KUMAR7 pages
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What did the High Court hold?

The High Court allowed the petition. It noted that it was an undisputed fact that the petitioner had not submitted a reply to the notice under Section 148A(b). However, in view of the petitioner's assertion that this omission was due to bonafide reasons, unavoidable circumstances, and sufficient cause, and the request for one more opportunity, the Court deemed it just and appropriate to set aside the impugned order under Section 148A(d) dated 26/03/2022 and subsequent notices/orders. The matter was remitted back to the Income Tax Officer for reconsideration from the stage of submitting the reply to the Section 148A(b) notice. The petitioner was granted liberty to submit its replies and documents, and the respondent was directed to provide a reasonable opportunity and proceed in accordance with law. The ratio is that procedural fairness requires granting an opportunity to respond when a party demonstrates sufficient cause for non-compliance, even if the initial notice was not received.

What were the facts?

The petitioner, Nisarga Vividodesha Sahakara Sanga (R), filed a writ petition before the High Court of Karnataka challenging various notices and orders issued by the Income Tax Department for the assessment year 2018-19. The primary grievance was that the petitioner did not receive the notice under Section 148A(b) dated 14/03/2022, and therefore, could not submit a reply. This failure to respond was attributed to bonafide reasons and unavoidable circumstances. The respondents, including the Income Tax Officer and the National Faceless Assessment Centre, argued that the petition lacked merit. The High Court considered the undisputed fact that no reply was filed by the petitioner 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 14/03/2022, was duly 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 and that its inability to respond was due to bonafide reasons, unavoidable circumstances, and sufficient cause. The petitioner sought an opportunity to submit its reply. 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 147,Section 144,Section 144B,Section 271AAC(1),Section 226(3)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:37399 WP No. 24842 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.24842 OF 2024 (T-IT) BETWEEN:

NISARGA VIVIDODESHA SAHAKARA SANGA (R) REGISTERED UNDER THE KARNATAKA CO-OPERATIVES SOCIETIES ACT,1959, REPRESENTED BY JALAJAKSHI S R, SECRETARY, MARKET ROAD, OPPOSITE KEB, KUSHALNAGAR, KODAGU – 571 234. REPRESENTED BY JALAJAKSHI S.R., AGED 54 YEARS, D/O LATE RAJAPPA H V, RESIDING AT HARANGI ROAD, ATHUR, RASULPURA, KUSHALNAGAR, KODAGU – 571 234. …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND:

1.

INCOME TAX OFFICER ITO WARD, MADIKERI – 571 201.

2.

NATIONAL FACELESS ASSESSMENT CENTRE ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / 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 – 3

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:37399 WP No. 24842 of 2024

THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX – 3, BMTC BUILDING, KORAMANGALA, BANGALORE – 560 095.

4.

THE TAX RECOVERY OFFICER THE OFFICE OF THE TAX RECOVERY OFFICER, BMTC BUILDING, KORAMANGALA, BANGALORE – 560 095. …RESPONDENTS (BY SRI.THIRUMALESH M., ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE NOTICE UNDER SECTION 148A(B) OF THE ACT DATED 14/03/2022 BEARING DIN NO.ITBA/AST/F/148A(SCN)/2021-22/1040716625(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE – A AND ETC.

THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER In this petition, the 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 14/03/2022, bearing DIN No. ITBAJAST/F/148A(SCN)/2021-22/1040716625(1) issued by the Respondent No.1 for the assessment year 2018-19 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 26/03/2022 bearing DIN No. ITBA/AST/F/1484/2021-22/1041635932(1) issued by the

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NC: 2024:KHC:37399 WP No. 24842 of 2024

Respondent No.1 for the assessment year 2018- 19 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 26/03/2022 bearing DIN No. ITBA/AST/S/148_1/2021-22/1041686894(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure A2.

iv) 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 144, 144B of the Act dated: 24/03/2023 ITBA/AST/S/147/2022 23/1051262495(1) issued try the Respondent No. 2 for the assessment year 2018-19 herein marked as Annexure- АЗ.

v) 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 10.09.2023 bearing DIN No. ITBA/PNL/F/271AAC(1)/2023- 24/1055915001(1) by the Respondent No. 2 for the assessment year 2018-19 herein marked as Annexure - A4.

vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under section 226(3) of the Act dated 14/11/2023 bearing DIN No. ITBA/RCV/S/226(3) 1/2023-24/1057933664(1) by the Respondent No. 1 for the assessment year 2018- 19 herein marked as Annexure A5.

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NC: 2024:KHC:37399 WP No. 24842 of 2024

vii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under section 226(3) of the Act dated 14/11/2023 bearing DIN No. ITBA/RCV/S/226(3) 1/2023-24/1057933665(1), by the Respondent No. 1 for the assessment year 2018- 19 herein marked as Annexure А6.

viii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under section 226(3) of the Act dated 14/11/2023 bearing DIN No. ITBA/RCV/S/226(3) 1/2023-24/1057933668(1) by the Respondent No. 1 for the assessment year 2018- 19 herein marked as Annexure - A7.

ix) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Rule 2 of Second Schedule to the Income Tax Act, 1961 dated 30/03/2024 bearing DIN No. ITBA/RCV/S/301/2023- 24/1063682337(1) by the Respondent No. 4 for the assessment year Annexure - A8. 2018-19 herein marked as Annexure-A8.

x) And pass such other orders as this Hon'ble Court deems fit and equity. proper in the interest of justice and equity.”

2.

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

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NC: 2024:KHC:37399 WP No. 24842 of 2024

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 14.03.2022 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 respondents may be directed to proceed further in accordance with law.

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 /

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NC: 2024:KHC:37399 WP No. 24842 of 2024

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 26.03.2022 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, pass the following:

ORDER

(i) The petition is hereby allowed.

(ii) Impugned notices / orders at Annexures A1, A2, A3, A4, A5, A6, A7 and A8 are hereby set aside.

(iii) Matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage

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NC: 2024:KHC:37399 WP No. 24842 of 2024

of submitting of reply to the Show Cause Notice under Section 148A(b) of the IT Act at Annexure – A dated 14.03.2022.

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

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

BMV* List No.: 1 Sl No.: 65

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