MR. SATYANARAYANA KRISHNAIAH SHETTY vs. INCOME TAX OFFICER WARD 7(2)(1)

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WP/7261/2025HC KarnatakaKAHC01013818202512 March 2025Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition, setting aside the impugned assessment order and penalty notices. The Court found that the petitioner's assertion of inability to respond to the Section 148A(b) notice due to bonafide reasons, unavoidable circumstances, and sufficient cause was credible. Consequently, the Court deemed it just and appropriate to grant the petitioner one more opportunity to submit his reply and documents. The matter was remitted back to the Income Tax Officer (Respondent No. 1) for reconsideration from the stage of submitting the petitioner's reply to the Section 148A(b) notice. The Court reserved liberty for the petitioner to submit additional pleadings and documents, which the respondent was directed to consider before proceeding in accordance with law.

What were the facts?

The petitioner, Mr. Satyanarayana Krishnaiah Shetty, filed a writ petition before the High Court of Karnataka challenging an assessment order dated January 24, 2025, and notices for penalty under Sections 274 read with 270A and 272A(1)(d) of the Income Tax Act, 1961. The petitioner contended that he did not submit a reply to the notice issued under Section 148A(b) of the IT Act dated February 16, 2024, due to his lack of computer literacy, inability to access email, and ill-health preventing him from contacting his accountant. He argued these were bonafide reasons and unavoidable circumstances. The revenue contended that the petition lacked merit.

What were the issues?

1. Whether the petitioner's failure to respond to the notice under Section 148A(b) of the Income Tax Act, 1961, was due to bonafide reasons, unavoidable circumstances, and sufficient cause, warranting a fresh opportunity to submit a reply. Assessee's Contention: The petitioner argued that his inability to respond to the Section 148A(b) notice was due to his lack of computer skills, unfamiliarity with email, and ill-health, which prevented him from consulting his accountant. He claimed these were bonafide reasons and sought an opportunity to submit his reply. Revenue's Contention: The respondents argued 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 147,Section 144,Section 144B,Section 274,Section 270A,Section 272A(1)(d),Section 148

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:10433 WP No. 7261 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 7261 OF 2025 (T-IT)

BETWEEN:

MR. SATYANARAYANA KRISHNAIAH SHETTY SON OF Y. KRISHNAIAH SHETTY AGED ABOUT 60 YEARS RESIDING AT NO. 170/35 24TH CROSS, 6TH BLOCK JAYANAGAR, BENGALURU 560 011 …PETITIONER (BY SRI. SYED KHAMRUDDIN, ADV.,) AND:

1.

INCOME TAX OFFICER WARD 7(2)(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA, BANGALORE KARNATAKA 560 095.

2.

ASSESSMENT UNIT REPRESENTED BY ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER INCOME TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO.401, 2ND FLOOR, E-RAMP JAWARHARLAL NEHRU STADIUM DELHI 110 003.

3.

NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2025:KHC:10433 WP No. 7261 of 2025

INCOME TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO. 401, 2ND FLOOR, E-RAMP JAWARHARLAL NEHRU STADIUM DELHI 110 003 …RESPONDENTS (BY SRI. M DILIP AND SRI. E.I. SANMATHI, ADVS.,)

THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED 24.01.2025 ISSUED BY THE RESPONDENT NO.2 BEARING DIN NO. ITBA/AST/S/147/2024- 25/1072503971(1) (ANNEXURE - A). CONSEQUENTLY, QUASH THE NOTICE FOR PENALTY UNDER SECTION 274 READ WITH SECTION 270A BEARING DIN NO.ITBA/PNL/S/270/202- 25/1072504032(1) ISSUED BY THE 2ND RESPONDENT (ANNEXURE -A1) AND NOTICE FOR PENALTY UNDER SECTION 274 READ WITH SECTION 272A(1)(D) BEARING ITBA/PNL/S/272A(1)(D) FL/2024-25/1072503553(1) ISSUED BY THE 2ND RESPONDENT (ANNEXURE -A2) & ETC.,

THIS 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, petitioner seeks the following reliefs:

“i. Quash the Assessment Order dated 24.01.2025 issued by the respondent No.2 bearing DIN No.ITBA/AST/S/147/2024- 25/1072503971(1) (Annexure-A)

ii. Consequently, quash the Notice for penalty under Section 274 read with Section

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NC: 2025:KHC:10433 WP No. 7261 of 2025

270A bearing DIN No.ITBA/PNL/S/270/2024- 25/1072504032(1) issued by the 2nd respondent (Annexure-A1) and Notice for penalty under Section 274 read with Section 272A(1)(d) bearing No.ITBA/ PNL/S/ 272A(1)(d)FL/2024-25/10725033553(1) issued by the 2nd respondent (Annexure-A2);

iii. Pass such other or further order as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests 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 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 16.02.2024 was received by petitioner through email and he was not aware of the

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NC: 2025:KHC:10433 WP No. 7261 of 2025

notice as he was not skilled and acquainted with computers and using of email consequently, petitioner could not submit his reply/response along with documents to the said notice. It is also submitted that the Petitioner due to his ill-health could not reach out to his accountant to comply with the aforesaid 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

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NC: 2025:KHC:10433 WP No. 7261 of 2025

submitted reply/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 his 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, the petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned orders at Annexure-D, dated 28.03.2024 passed under section 148A(d) of the IT Act, Notice at Annexure-D1, dated 28.03.2024 passed under Section 148 of the IT Act and Order at Annexure-A, dated 24.01.2025 passed under Section 147 read with Section 144 read with Section 144B 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.

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NC: 2025:KHC:10433 WP No. 7261 of 2025

6.

In the result, pass the following: ORDER (i) The petition is hereby allowed.

(ii) Impugned notices / orders at Annexures-A, A1, A2, D and D1 are hereby set aside.

(iii) The matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 148A(b) of the IT Act at Annexure-B dated 16.02.2024.

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

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

NC List No.: 1 Sl No.: 20

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