MELAGANI CHICKAVENKATAPPA NEELAKANTE GOWDA vs. THE INCOME TAX OFFICER

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WP/16733/2024HC KarnatakaKAHC01034058202424 July 2024Bench: S SUNIL DUTT YADAV4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka, while noting that the order under Section 148A(d) was passed without the petitioner providing an explanation and considering the petitioner's contention of no proper service of notice, decided to relegate the petitioner to the stage of replying to the notice under Section 148A(b) to meet the ends of justice. Consequently, the order under Section 148A(d) (Annexure-C), the notice under Section 148 (Annexure-D), and the assessment order under Section 147 read with Section 144 (Annexure-E) were set aside. The matter was remanded to the stage of reply to the Section 148A(b) notice, with all contentions kept open. The Court did not decide on the merits of the case but provided an opportunity for the petitioner to respond.

What were the facts?

The petitioner, Melagani Chickavenkatappa Neelakante Gowda, filed a writ petition challenging notices dated February 19, 2023, and March 8, 2023, issued under Section 148A(b) of the Income Tax Act, 1961, for Assessment Year 2016-17. The petitioner also challenged the consequential order under Section 148A(d), the notice under Section 148, and the assessment order under Section 147 read with Section 144. The petitioner claimed to have no prior knowledge of being an assessee and alleged that notices were sent to his Chartered Accountant's address without his knowledge. The petitioner stated he could explain the demand if given an opportunity. The order under Section 148A(d) noted the petitioner's failure to disclose the nature and source of funds for an immovable property purchase.

What were the issues?

1. Whether the notices issued under Section 148A(b) of the Income Tax Act, 1961, and the subsequent order under Section 148A(d) are liable to be quashed on the grounds of non-service of notice and lack of opportunity to the petitioner. Assessee's Contentions: - The petitioner was not previously an assessee and thus had no knowledge of notices uploaded based on his PAN. - Notice was sent to the Chartered Accountant's address, which was not communicated to the petitioner. - The petitioner requires an opportunity to explain and clarify the demand raised. - The purchase of immovable property involved three other purchasers, a fact not adequately considered. Revenue's Contentions: - The judgment records no specific contentions from the revenue regarding the petitioner's arguments on notice service or opportunity. The order under Section 148A(d) was passed observing the petitioner's failure to disclose the nature and source of funds for the purchase of immovable property.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:29144 WP No. 16733 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 16733 OF 2024 (T-IT) BETWEEN: MELAGANI CHICKAVENKATAPPA NEELAKANTE GOWDA, S/O M.C. HANUMAPPA, AGED ABOUT 63 YEARS, 99, ANJANADRI, MELAGANI, EMMANATHA POST, MULBAGAL - 563 131, KOLAR DISTRICT. …PETITIONER (BY SRI. R. RAMAMURTHY, ADVOCATE) AND: THE INCOME TAX OFFICER, WARD-1, NEW EXTENSION, KOLAR - 563 101. …RESPONDENT (BY SRI. M. DILIP, JR. STANDING COUNSEL)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICES DATED 19.02.2023 AND 08.03.2023 ISSUED U/S. 148A(b) OF THE ACT (ANNEXURE-B AND B-1) [ITBA/AST/F/148A(SCN)/2022-23/1049900514(1) AND ITBA/AST/F/148A(SCN)/2022-23/1050512642(1)] ISSUED FOR THE ASSESSMENT YEAR 2016-17 BY THE RESPONDENT AND ETC.,

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: Digitally signed by YAMUNA K L Location: High Court of Karnataka

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NC: 2024:KHC:29144 WP No. 16733 of 2024 CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER (PER: HON'BLE MR JUSTICE S SUNIL DUTT YADAV)

The petitioner has sought for issuance of writ of certiorari to set aside the notices under Section 148A(b) of the Income Tax Act, 1961 (for short 'the Act') at Annexures-B and B1 as well as to set aside the order under Section 148A(d) of the Act at Annexure-C. The petitioner has assailed the notice under Section 148 of the Act at Annexure-D and the assessment order under Section 147 read with Section 144 of the Act at Annexure-E.

2.

It is the case of the petitioner that he was not an assessee and hence had no knowledge of notice that was uploaded on the basis of the petitioner's Permanent Account Number (PAN). It is further submitted that the petitioner had no notice even otherwise, as notice was sent to the address of the Chartered Accountant at Kolar which has not communicated to the petitioner. It is further

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NC: 2024:KHC:29144 WP No. 16733 of 2024 submitted that the petitioner would be in a position to explain and clarify as regards the demand raised, if an opportunity is provided. 3. The order under Section 148A(d) of the Act has been passed observing that the assessee has failed to disclose the nature of purchase of immovable property and the source of funds for such purchase. 4. Learned counsel for the petitioner would submit that the purchase of the immovable property was made by the sale deed, wherein apart from the petitioner there were three other purchasers and such aspect has not been taken note of appropriately. 5. Noticing that the order under Section 148A(d) of the Act has been passed without any explanation on record by the petitioner herein and noticing the petitioner's contention that there were no service of notice to the petitioner as he was not an assessee previously, to meet the ends of justice, it would be appropriate to

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NC: 2024:KHC:29144 WP No. 16733 of 2024 relegate the petitioner to the stage of reply to the notice under Section 148A(b) of the Act. 6. Accordingly, the order at Annexure-'C' is set aside and consequently, notice under Section 148 of the Act at Annexure-'D' and the assessment order at Annexure-'E' are set aside. Matter is relegated to the stage referred to above. All contentions are kept open. Accordingly, petition is disposed off. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR

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