NARENDRAKUMAR PARASMALJI RANKA vs. ADDITIONAL COMMISSIONER OF INCOME

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WP/104029/2021HC KarnatakaKAHC02023070202119 September 2024Bench: JYOTI MULIMANI5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court considered it proper to allow the petitioner to file additional objections and furnish additional documents. Consequently, the Court found that the matter required a remand. The assessment order dated 25.09.2021 and the demand notice dated 25.09.2021 were liable to be set aside and were accordingly quashed. The subsequent demand notice dated 31.03.2022 and the order dated 01.04.2022 were also quashed. The matter was remanded to the respondents to enable the petitioner to file additional objections and furnish additional documents. Upon filing these, the respondents were directed to proceed as per law. The petitioner was also granted liberty to seek electronically uploaded reasons for reopening the assessment. The Court explicitly stated that it had not expressed any opinion on the merits of the case.

What were the facts?

The petitioner, NarendraKumar Parasmalji Ranka, an Income Tax Assessee, filed a Writ Petition challenging an order dated 25.09.2021 passed under Section 147 read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2016-17, and a consequential demand notice dated 25.09.2021 under Section 156 of the Act. The assessment was reopened after a regular assessment order was passed on 21.12.2018. Various notices were issued, including under Section 148, 143(2), 147, and 142(1). The petitioner filed objections on 31.08.2021, which were disposed of on 02.09.2021, leading to the impugned assessment order. The petitioner also sought to quash subsequent demand notices and orders dated 31.03.2022 and 01.04.2022.

What were the issues?

1. Whether the reopening of assessment proceedings under Section 147 of the Income Tax Act, 1961, was conducted considering the material propositions properly, and if the petitioner should be allowed to submit additional objections and furnish additional documents? (Question of law and fact, turning on Section 147 and principles of natural justice). Assessee's Contention: The material propositions were not considered properly during the reopening of assessment under Section 147. The petitioner should be permitted to submit additional objections and furnish additional documents to support their case, and therefore, the matter should be remanded, and the assessment order quashed. Revenue's Contention: The action of the department was justified. The revenue strongly objected to a remand, submitting that the Writ Petition was devoid of merits and should be dismissed.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 156,Section 148,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC-D:13375 WP No. 104029 of 2021

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 19TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 104029 OF 2021 (T-RES) BETWEEN:

NARENDRAKUMAR PARASMALJI RANKA, RAVI AUTOMOBILES, G-1, EUREKA TOWER, TRAFFIC ISLAND HUBBALLI-580 029, PAN: ABAPN0790M. TEL: 99021491, 0836-2351958, EMAIL: akshataranka.jgi@gmail.com …PETITIONER (BY SRI. K.R.PRADEEP., ADVOCATE)

AND:

1.

ADDITIONAL COMMISSIONER OF INCOME TAX, NAFAC, C-BLOCK, 4TH FLOOR, S.P.M. CIVIC CENTRE, NEW DELHI-110 001. Delhi.addlcit.nfac@incometax.gov.in 011-23221459 9013853810

2.

CHIEF COMMISSIONER OF INCOME TAX, REFAC, BNG C.R. BUILDING, NO.1, QUEEN’S ROAD, BENGALURU-560 001. Ccit.reac@incometax.gov.in 080-22864478 8985970017

3.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1.1 AND 3(1),

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC-D:13375 WP No. 104029 of 2021

CENTRAL REVENUE BUILDING, NAVANAGAR, HUBBALLI-580 025. HUBLI.DCIT3.1@INCOMETAX.GOV.IN …RESPONDENTS (BY SRI. M.TIRUMALESH., ADVOCATE FOR R1-R3)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, AN ORDER IS MADE AS UNDER: ORAL ORDER Sri.K.R.Pradeep., counsel for the petitioner and Sri.M.Thirumalesh., counsel for the respondents have appeared in person. 2. The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the order dated 25.09.2021 passed under Section 147 R/w Section 144B of the Income Tax Act, 1961 in DIN No.ITBA/AST/S/147/2021-22/1035896207(1) for the Assessment Year 2016-17 vide Annexure-A and the Demand Notice dated 25.09.2021 issued under Section 156 of the Income Tax Act, 1961 in DIN & Notice No.ITBA/AST/S/156/2021-22/1035896216(1) for the Assessment Year 2016-17 vide Annexure-B.

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NC: 2024:KHC-D:13375 WP No. 104029 of 2021

3.

The petitioner is an Income Tax Assessee and his returns were assessed by way of regular assessment mainly in respect of income from the Proprietary and Partnership business. The first assessment order was passed on 21.12.2018. A notice under Section 148 of the Act was issued on 23.08.2019. A notice under Section 143(2) R/w Section 147 of the Act was issued on 28.10.2020. Subsequently, on 01.03.2021, a notice under Section 142(1) of the Act was issued along with the reasons recorded for re-opening of assessment. On 16.08.2021, one more notice was issued under Section 142(1) of the Act. On 24.08.2021, a reminder was issued to the petitioner. The petitioner gave a reply/ objection on 31.08.2021. The department disposed of the objections on 02.09.2021 and passed the Assessment order on 25.09.2021. 4. Counsel Sri.K.R.Pradeep., in presenting his arguments, submits that in reopening the assessment proceedings under Section 147 of the Income Tax Act, the material propositions have not been considered properly. He argued by saying that the petitioner may be allowed to submit additional objections and furnish additional documents to support his case. Hence, he submits that the matter may be

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NC: 2024:KHC-D:13375 WP No. 104029 of 2021

remanded and the Assessment Order vide Annexure-A may be quashed. Counsel Sri.M.Thirumalesh., urged several contentions. He justified the action of the department. He strongly objected to a remand. He submits that the Writ Petition is devoid of merits and the same may be dismissed. Heard the arguments and perused the Writ papers with care. 5. On facts and in all the circumstances of the case, this Court considers it proper to allow the petitioner to file additional objections and furnish additional documents. Hence, the matter requires a remand. The Assessment order and the demand notice are liable to be set aside and so, they are aside. 6. The Writ of Certiorari is ordered. The order dated 25.09.2021 passed under Section 147 R/w Section 144B of the Income Tax Act, 1961 in DIN No. ITBA/AST/S/147/2021- 22/1035896207(1) for the Assessment Year 2016-17 vide Annexure-A and the Demand Notice dated 25.09.2021 issued under Section 156 of the Income Tax Act, 1961 in DIN & Notice No.ITBA/AST/S/156/2021-22/1035896216(1) for the

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NC: 2024:KHC-D:13375 WP No. 104029 of 2021

Assessment Year 2016-17 vide Annexure-B are quashed. Consequently, the demand notice dated 31.03.2022 and the order dated 01.04.2022 are also quashed. The matter is remanded to the respondents to enable the petitioners to file additional objections and furnish additional documents. Upon filing additional objections and furnishing additional documents, the respondents shall go ahead with the matter as per the law. The petitioner is also at liberty to seek electronically uploaded reasons for re-opening the assessment. 7. Resultantly, the Writ Petition is allowed and remanded. This Court has not expressed any opinion on the merits of the case.

Sd/- (JYOTI MULIMANI) JUDGE

TKN LIST NO.: 2 SL NO.: 17

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