VARAHA BUILDERS vs. THE INCOME TAX OFFICER

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WP/16062/2024HC KarnatakaKAHC01031935202421 August 2024Bench: S.R.KRISHNA KUMAR8 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition. It noted that it was undisputed that the petitioner had not submitted a reply to the Section 148A(b) notices. However, accepting the petitioner's assertion that the non-submission was due to bonafide reasons, unavoidable circumstances, and sufficient cause, the Court deemed it just and appropriate to grant one more opportunity. Consequently, the impugned order dated March 21, 2023, passed under Section 148A(d), along with subsequent notices and orders, were set aside. 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) notices. Liberty was granted to the petitioner to submit additional pleadings and documents, which the respondent was directed to consider before proceeding in accordance with the law. The Court did not decide on the merits of the assessment or penalties.

What were the facts?

The petitioner, Varaha Builders, a partnership firm, filed a writ petition before the High Court of Karnataka challenging several notices and orders issued by the Income Tax Department for the assessment year 2016-17. These included notices under Section 148A(b) dated March 3, 2023, and March 11, 2023, an order under Section 148A(d) dated March 21, 2023, a notice under Section 148 dated March 21, 2023, an order under Section 147 r.w.s 144, 144B dated January 24, 2024, and various penalty notices and orders under Sections 271(1)(c), 271D, 271(1)(b), and 271F, all dated January 24, 2024. The core of the petitioner's grievance was that they did not receive the Section 148A(b) notices and therefore could not submit a reply.

What were the issues?

1. Whether the notices issued under Section 148A(b) of the Income Tax Act, 1961, dated March 3, 2023, and March 11, 2023, were duly served on the petitioner, and if not, whether the petitioner had sufficient cause for not responding. Assessee's Contention: The petitioner argued that the notices under Section 148A(b) were not received, and consequently, they were unaware of them and could not submit a reply. They claimed this omission was due to bonafide reasons, unavoidable circumstances, and sufficient cause, and requested an opportunity to respond. 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(b),Section 148A(d),Section 148,Section 147,Section 144,Section 144B,Section 271(1)(c),Section 271D,Section 271(1)(b),Section 271F

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:33600 WP No. 16062 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 16062 OF 2024 (T-IT) BETWEEN:

VARAHA BUILDERS A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER SRI HARI BABU NO.180, GURUDUTT LAYOUT, HOSAKEREHALLI BANGALORE- 560085.

ALSO AT HARI BABU, AGED 48 YEARS, S/O KANNAIAH M V, NO. 1101, 12TH FLOOR, A BLOCK, THE INFINITY , OPP CANARA BANK, UTTARAHALLI, SUBRAMANYAPURA, BANGALORE 560061, …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND:

1.

THE INCOME TAX OFFICER WARD 7(2)(5), BANGALORE-560095

2.

NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF

Digitally signed by ANAND N Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:33600 WP No. 16062 of 2024

FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI 110003

3.

THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, THE OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, CR BUILDING BANGALORE - 560001 …RESPONDENTS (BY SRI. E.I.SANMATHI, ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO 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 03/03/2023, BEARING DIN NO.ITBA/AST/F/148A(SCN)/2022-23/1050354233(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2016- 17 HEREIN MARKED AS ANNEXURE - A; 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 11/03/2023, BEARING DIN NO.ITBA/AST/F/148A(SCN)/2022-23/1050641535(1), ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2016- 17 HEREIN MARKED AS ANNEXURE - A1; 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 21/03/2023, BEARING DIN NO.ITBA/AST/F/148A/2022-23/1051050220(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2016-17 HEREIN MARKED AS ANNEXURE - A2.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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

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NC: 2024:KHC:33600 WP No. 16062 of 2024

ORAL ORDER

In this petition, 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 03/03/2023, bearing No.ITBA/AST/F/148A(SCN)/2022- 23/1050354233(1) issued by the Respondent No.1 for the assessment year 2016-17 herein marked as Annexure - A.

ii) 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 11/03/2023, bearing No.ITBA/AST/F/148A(SCN)/2022-23/1050641535(1), issued by the Respondent No.1 for the assessment year 2016-17 herein marked as Annexure - A1.

iii) 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 21/03/2023, bearing DIN No.ITBA/AST/F/148A/2022- 23/1051050220(1) issued by the Respondent No.1 for the assessment year 2016-17 herein marked as Annexure - A2.

v) 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 21/03/2023 bearing DIN

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NC: 2024:KHC:33600 WP No. 16062 of 2024

No. ITBA/AST/S/148_1/2022-23/1051053479(1) issued by the Respondent No.1 for the assessment year 2016-17 herein marked as Annexure - АЗ.

v) 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 dated 24/01/2024 bearing DIN No.ITBA/AST/S/147/2023- 24/1060049641(1) issued by the Respondent No. 2 for the assessment year 2016-17 herein marked as Annexure - A4.

vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice under Section 271(1)(c) of the Act dated 24/01/2024 bearing DIN No. ITBA/PNL/S/271(1)(c)/2023- 24/1060049842(1), issued by the Respondent No.2 for the assessment year 2016-17 herein marked as Annexure - A5.

vii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under Section 271D of the Act dated 24/01/2024 bearing DIN No. ITBA/PNL/S/271D/2023-24/1060049848(1), issued by the Respondent No.2 for the assessment year 2016-17 herein marked as Annexure - A6.

viii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice under Section 271(1)(b) of the Act dated 24/01/2024 bearing DIN No. ITBA/PNL/F/271(1)(b)/2023-

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NC: 2024:KHC:33600 WP No. 16062 of 2024

24/1060049857(1), issued by the Respondent No.2 for the assessment year 2016-17 herein marked as Annexure - A7.

ix) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under Section 271F of the Act dated 24/01/2024 bearing DIN No. ITBA/PNL/S/271F/2023-24/1060050256(1), issued by the Respondent No.2 for the assessment year 2016-17 herein marked as Annexure - A8."

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 notices issued by the respondents under Section 148A(b) of the Income Tax Act, 1961 (for short, ‘IT Act’), dated 03.03.2023 and 11.03.2023 [Annexures - A and A1] were not received by the petitioner and it was not aware of the notices and consequently, the petitioner could not submit its reply/response along with documents to the said notices. 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) notices was due to bonafide

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NC: 2024:KHC:33600 WP No. 16062 of 2024

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 the 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/response along with documents to Section 148A(b) notices. 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) notices 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 order at Annexure – A2 dated 21.03.2023 passed under Section 148A(d) of the IT Act and subsequent notice/orders,

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NC: 2024:KHC:33600 WP No. 16062 of 2024

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) notices and to proceed further in accordance with law.

6.

In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) Impugned notices/orders at Annexures - A, A1, A2, A3, A4, A5 and 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 of submitting of reply to the Show Cause Notices under Section 148A(b) of the IT Act at Annexures – A dated 03.03.2023 and A1 dated 11.03.2023.

(iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the

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NC: 2024:KHC:33600 WP No. 16062 of 2024

respondent No.1, who shall consider the same and proceed further in accordance with law.

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

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