SHRI. KANTHARAJ CHOWDAIAH SIDDAMMA vs. THE INCOME TAX OFFICER

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WP/32967/2024HC KarnatakaKAHC01066617202405 March 2025Bench: S.R.KRISHNA KUMAR7 pages
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What did the High Court hold?

The High Court allowed the writ petition. The Court found that the petitioner's contention was correct. The two transactions, which formed the basis for the impugned notices and orders, were clearly mentioned, reflected, and contained in the Income Tax Return filed by the petitioner on August 31, 2019. Therefore, the respondents committed a factual error in concluding that these transactions were not disclosed. This erroneous conclusion rendered the subsequent order under Section 148A(d) and the subsequent notices and orders under Sections 148, 147, 271AAC(1), and 270A contrary to the material on record and unsustainable in law. The Court quashed all the impugned orders and notices. Liberty was reserved in favour of the respondents to take appropriate steps, subject to all just exceptions and defences available to the petitioner.

What were the facts?

The petitioner, Shri. Kantharaj Chowdaiah Siddamma, filed a writ petition before the High Court of Karnataka challenging several notices and orders issued by the Income Tax Department for Assessment Year (AY) 2019-20. The challenge was primarily against a notice under Section 148A(b) dated March 20, 2023, an order under Section 148A(d) dated March 30, 2023, a notice under Section 148 dated March 30, 2023, an order under Section 147 dated March 16, 2024, penalty notices under Section 271AAC(1) and Section 270A dated March 16, 2024, and penalty orders under Section 271AAC(1) and Section 270A dated September 29, 2024. The core of the dispute stemmed from the respondents' assertion that certain transactions were not disclosed in the petitioner's Income Tax Return filed on August 31, 2019.

What were the issues?

1. Whether the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated March 20, 2023, is vitiated by an error in alleging that two specific transactions were not disclosed in the petitioner's Income Tax Return for AY 2019-20, thereby making the subsequent proceedings unsustainable. Assessee's Contention: The petitioner argued that the two transactions in question were indeed disclosed and reflected in the Income Tax Return filed on August 31, 2019, as evidenced by Annexure-B. The respondents' conclusion to the contrary was factually incorrect. The petitioner also submitted a delayed reply due to bonafide reasons and unavoidable circumstances. Revenue's Contention: The respondents contended 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 148A(b),Section 148A(d),Section 148,Section 147,Section 271AAC(1),Section 270A

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:9483 WP No. 32967 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 32967 OF 2024 (T-IT) BETWEEN:

SHRI. KANTHARAJ CHOWDAIAH SIDDAMMA, SON OF LATE CHOWDAIAH, AGED ABOUT 70 YEARS, NO.21, 3RD CROSS, 3RD MAIN ROAD, PAUL CHINNAPPA LAYOUT, BIKASIPURA, ISRO LAYOUT, J P NAGAR, BENGALURU – 500 078. …PETITIONER (BY SRI. RAVI SHANKAR S. V., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER, BESIDE JHANKAR TALKIES, KUMHARPARA, JAGDALPUR CHHATTISGARH – 494 001.

2.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-1, NEW C.R. BUILDING CIVIL LINES, RAIPUR – 492 001.

3.

ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO 401, 2ND FLOOR, E-RAMP, JAWARLAL NEHRU STADIUM, DELHI – 110 003.

4.

THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1(3), CENTRAL REVENUE BUILDING,

Digitally signed by LEELAVATHI S R Location: High Court of Karnataka

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NC: 2025:KHC:9483 WP No. 32967 of 2024

QUEENS ROAD, BENGALURU – 560 001. …RESPONDENTS (BY SRI. M. DILIP FOR R-1 TO R-4, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER SECTION 148A(b) OF THE ACT DATED 20.03.2023 OF THE ACT FOR THE AY 2019-20 BY THE RESPONDENT NO.1 BEARING DIN AND NOTICE NO. ITBA/AST/F/148A(SCN)/2022-23/1051007352(1) HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER In this petition, petitioner seeks for the following reliefs:

“(a) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice issued under section148A(b) of the Act dated 20.03.2023 of the Act for the AY 2019-20 by the Respondent No.1 bearing DIN & Notice No.ITBA/AST/F/148A(SCN)/2022-23/151007352(1) herein marked as Annexure – A.

(b) Issue a writ or Certiorari or direction in the nature of a writ of certiorari quashing the order dated 30.03.2023 passed under section 148A(d) of the Act for the AY 2019-20 by the Respondent No.1 bearing DIN & Notice No. ITBA/AST/F/148A(SCN)/2022-23/1051630791(1) herein marked as Annexure – A1.

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NC: 2025:KHC:9483 WP No. 32967 of 2024

(c) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice dated 30.03.2023 issued under section 148 of the Act for the AY 2019-20 by the Respondent No.1 bearing DIN & Notice No.ITBA/AST/S/148_1/2022-23/1051653747 (1) herein marked as Annexure – A2.

(d) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order dated 16.03.2024 passed under section 147 of the Act for the AY 2019-20 by the Respondent No.3 bearing DIN & Order No. ITBA/AST/S/147/2023-24/1062731980(1) herein marked as Annexure – A3.

(e) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice dated 16.03.2024 issued under section 271AAC(1) of the Act for the A.Y. 2019-20 by the Respondent No.3 bearing DIN & Notice No. ITBA/PNL/S/271AAC(1)/2023-24/1062732076(1) herein marked as Annexure – A4.

(f) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 29.09.2024 passed under section 271AAC(1) of the Act for the AY 2019-20 by the Respondent No.4 bearing DIN No. ITBA/PNL/F/271AAC(1)/2024-25/1069243882(1) herein marked as Annexure – A5.

(x) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice dated 16.03.2024 issued under section 270A of the Act for the AY 2019-20 by the Respondent No.3 bearing DIN & Notice No.

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NC: 2025:KHC:9483 WP No. 32967 of 2024

ITBA/PNL/F/270A/2023-24/1062732075(1) herein marked as Annexure – A6.

(xi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 29.09.2024 passed under section 270A of the Act for the AY 2019-20 by the Respondent No.4 bearing DIN & Notice No. ITBA/PNL/F/270A/2024-25/1069243568(1) herein marked as Annexure – A7.

(g) And pass such other orders as this Hon’ble Court deems fit and 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. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner has invited my attention to the impugned notices at Annexure-A issued under Section 148A(b) of the Income Tax Act in order to point out that the respondents have committed an error in alleging that the two transactions referred to in the said notice were not disclosed in the Income Tax Return submitted by the petitioner on 31.08.2019. 4. In this context, learned counsel for the petitioner invited my attention to Annexure-B, Income Tax Return

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NC: 2025:KHC:9483 WP No. 32967 of 2024

Acknowledgment Receipt for the assessment year 2019-20 in order to point out that both the aforesaid transactions were stated and reflected in the Income Tax Return and consequently, respondents clearly erred in coming to the erroneous conclusion that the said transactions were not disclosed in the Income Tax Returns. It is submitted that due to bonafide reasons, unavoidable circumstances and sufficient cause, petitioner submitted reply after due date, as a result of which, respondent proceeded to pass the impugned order under Section 148A(d) of Income Tax Act on 30.03.2023 pursuant to which respondent issued impugned notices under Section 148 of the Income Tax Act followed by the impugned communication and orders which are assailed in the present petition. 5. Per contra, learned counsel for the respondent submits that there is no merit in the petition and the same is liable to be dismissed. 6. As rightly contended by the learned counsel for the petitioner, the two transactions referred to by the respondent in the impugned notice at Annexure-A dated 20.03.2023 which are reiterated in the impugned order at Annexure-A1 passed under

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NC: 2025:KHC:9483 WP No. 32967 of 2024

Section 148A(d) dated 30.03.2023 and also in the subsequent impugned correspondences and orders, are clearly mentioned, reflected and contained in the Income Tax Returns dated 31.08.2019 and consequently, respondents clearly fell in error in coming to the erroneous conclusion that aforesaid transactions were not stated or reflected in the Income Tax Return, which is a factually incorrect conclusion and unsustainable in law. 7. Further, the impugned order at Annexure-A1 dated 30.03.2023 and subsequent orders etc., are also contrary to the material on record and on this ground also, impugned orders deserves to be set aside and respondents were not justified in initiating the impugned proceedings against the petitioner, which is without jurisdiction and authority of law and deserves to be quashed by reserving liberty in favour of the respondents to take appropriate steps subject to all just exceptions and defences available to the petitioner. 8. In the result, I pass the following: ORDER i) The petition is hereby allowed.

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NC: 2025:KHC:9483 WP No. 32967 of 2024

ii) The impugned orders / notices at Annexures - A1, A2, A3, A4, A5, A6, A7 dated 30.03.2023, 30.03.2023, 16.03.2024, 16.03.2024, 29.09.2024, 16.03.2024, 29.09.2024 respectively are hereby quashed.

iii) Liberty is reserved in favour of the respondents to take appropriate steps subject to all just exceptions and defences available to the petitioner.

Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS List No.: 1 Sl No.: 54

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