ABILASH REDDY vs. THE ASSISTANT COMMISSIONER

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WP/14736/2024HC KarnatakaKAHC01028849202403 July 2024Bench: S SUNIL DUTT YADAV4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, taking into account the petitioner's submissions and a prima facie perusal of the calculation sheet, found merit in affording the petitioner an opportunity to respond to the notice under Section 148A(b). The Court held that the petitioner's inability to reply due to an outdated email ID warranted setting aside the impugned orders. Accordingly, the order under Section 148A(d), the notice under Section 148, the order under Section 147 read with Sections 144 and 144B, and the penalty orders were set aside. The matter was remitted back to the stage of the petitioner filing a reply to the notice under Section 148A(b). All contentions on merits were kept open for consideration after the petitioner's reply.

What were the facts?

The petitioner, Abilash Reddy, challenged notices and orders related to reassessment proceedings for Assessment Year 2018-19. The petitioner contended that he could not respond to the notice under Section 148A(b) because his email ID with the department was outdated. Consequently, the subsequent orders, including those under Section 148A(d), Section 147 read with Sections 144 and 144B, and penalty orders, were passed without his participation. The petitioner also pointed out that the assessing authority's observation that no returns were filed was incorrect, as returns had been filed, albeit found to be defective. The petitioner argued that the details of capital gains computation should have been considered.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, and the subsequent proceedings are liable to be quashed due to the petitioner's inability to respond owing to an outdated email ID with the department? Assessee's Contention: The petitioner argued that the failure to respond to the Section 148A(b) notice was due to the Income Tax Department having an incorrect and outdated email address for him, preventing him from participating in the proceedings. This lack of opportunity led to the subsequent orders being passed without his input. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the validity of the notice or the petitioner's inability to respond. However, the revenue was represented by a Junior Standing Counsel.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:25042 WP No. 14736 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14736 OF 2024 (T-IT) BETWEEN: 1. ABILASH REDDY 36 YEARS, NO.44, ''DODDA MANE'', DODDA APPAYANNA REDDY LAYOUT, DODDA BANASWADI BANGALORE - 560 045 PAN: AQZPR3426J PREVIOUSLY AT: ABILASH REDDY 44 THIRUMALA BUILDING DODDA APPAYANNA REDDY ROAD, BANGALORE - 560 043 … PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1 (1) (1) BANGALORE - 560 095 2. NATIONAL FACELESS ASSESSMENT CENTRE ADDITIONAL/ JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER, INCOME TAX DEPARTMENT, Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:25042 WP No. 14736 of 2024 MINISTRY OF FINANCE ROOM NO.401, 2ND FLOOR, E RAMP, JAWAHARLAL NEHRU STADIUM DELHI - 110 003 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 1 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, BMTC BUILDING, KORAMANGALA BANGALORE - 560 095 … RESPONDENTS (BY SRI. M. DILIP., JUNIOR STANDING COUNSEL)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE NOTICE UNDER SECTION 148A(b) OF THE ACT, DTD 17.03.2022, BEARING DIN NO.ITBA/AST/F/148A(SCN)/2021- 22/1040993911(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2018.19 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

Petitioner has called in question the validity of the notice under Section 148-A(b) of the Income Tax Act, 1961 (for short 'the Act'); order under Section 148-A(d) of the Act at Annexure-A1; notice under Section 148 of the Act at Annexure-A2; order passed under Section 147 read with Sections 144, 144B of the Act at Annexure-A3 and the penalty orders at Annexures-A4 and A5.

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NC: 2024:KHC:25042 WP No. 14736 of 2024 2. It is the case of the petitioner that though the notice under Section 148-A(b) was issued, the petitioner could not reply as the email-ID of the assessee was not updated and it stood changed from the earlier one as was available with the Department. It is submitted that consequently, the order passed under Section 148-A(d) and other proceedings pursuant thereto have culminated without the participation of the petitioner. 3. It is pointed out that on merits as well, the assessing authority at Para No. 3.2 of the order at Annexure-A3 has observed that returns have not been filed, while the petitioner in effect has filed the returns as is evidenced at Annexures-B and C though subsequently, it was found out that the same were defective. Even otherwise, it is stated that though the details of computation of capital gains having been made as noticed by the assessing officer, the same ought to have been taken note of in an appropriate manner.

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NC: 2024:KHC:25042 WP No. 14736 of 2024 4. Taking note of the submission made and having prima facie perused the calculation sheet, case is made out for affording an opportunity to the petitioner to make out his reply to the notice under Section 148-A(b)of the Act at Annexure-A and to permit the authorities to proceed therefrom. 5. Accordingly, the order under Section 148-A(d) of the Act at Annexure-A1; notice under Section 148 of the Act at Annexure-A2; order passed under Section 147 read with Sections 144, 144B of the Act at Annexure-A3 and the penalty orders at Annexures-A4 and A5 are set aside. The matter is remitted back to the stage of reply to the notice under Section 148-A(b) of the Act at Annexure-A. All contentions on merits are kept open. 6. Writ petition is accordingly disposed off. Sd/- JUDGE VP

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