SRI NARAYAN REDDY JAGADISH vs. THE INCOME TAX OFFICER

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WP/191/2025HC KarnatakaKAHC01000153202515 January 2025Author: S.G.PANDIT6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition and remanded the matter back to the Assessing Authority (Respondent No.1). The Court held that the petitioner was entitled to an opportunity to file objections to the notice issued under Section 148A(b) of the Income Tax Act, 1961, and to participate in the proceedings. The Court acknowledged the petitioner's contention that the property was joint family property and the entire sale consideration should not be solely attributed to him. To facilitate this, the Court quashed several notices and the assessment order. The petitioner was directed to appear before Respondent No.1 on February 13, 2025, and file objections. The Assessing Authority was instructed to proceed in accordance with the law thereafter. Additionally, the petitioner was directed to deposit Rs. 3,00,000/- before the Assessing Authority by the date of appearance, with the deposit being subject to the final outcome of the assessment.

What were the facts?

The petitioner, Sri. Narayan Reddy Jagadish, filed a writ petition challenging a notice under Section 148A(b) of the Income Tax Act, 1961, dated March 17, 2022, issued by the Income Tax Officer, Ward-5(3)(2), for Assessment Year 2015-16. The petitioner contended that the assessment proceedings initiated and the ex-parte Assessment Order dated March 27, 2023, were passed without providing him an opportunity to file objections. He argued that the entire income from the sale of a property was considered, whereas the property was joint family property sold by his mother, brother, and sister, who had equal shares. The petitioner sought an opportunity to participate in the proceedings and file objections.

What were the issues?

1. Whether the petitioner was denied an opportunity to file objections to the notice issued under Section 148A(b) of the Income Tax Act, 1961, and to participate in the assessment proceedings. Assessee's Contention: The petitioner argued that he did not have an opportunity to file objections to the notices and that the assessment order was ex-parte. He specifically contended that the entire sale consideration of a joint family property was wrongly considered as his income, as his mother, brother, and sister also had equal shares. He sought an opportunity to present these objections. Revenue's Contention: The revenue contended that the petitioner received the notice and had an opportunity to file objections but failed to utilize it. Therefore, he was not entitled to any further opportunity.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 271(1)(b),Section 271F,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO.191 OF 2025 (T-IT) BETWEEN: SRI. NARAYAN REDDY JAGADISH, AGED ABOUT 54 YEARS, NO. 25/1, VENKATADRI NILAYA, HALANAYAKANAHALLI, CLM POST, SARJAPURA ROAD, BANGALORE 560 035, PAN AUEPJ3971D PREVIOUSLY AT: NO.17/1, SATHIYASADANA COMPLEX, SARJAPUR ROAD, BELLANDUR GATE, BANGALORE 5601 02 …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE) AND: 1. THE INCOME TAX OFFICER, WARD - 4(3)(3), BANGALORE 560 095. 2. THE INCOME TAX OFFICER, WARD- 5(3)(2), BANGALORE 560 032 3. NATIONAL FACELESS ASSESSMENT CENTRE, REPRESENTED BY ADDITIONAL / JOINT / DEPUTY / Digitally signed by KAVYA R Location: High Court of Karnataka

ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI 110 003. 4. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, THE OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, C.R. BUILDING, QUEENS ROAD, BANGALORE 560 001 …RESPONDENTS (BY SRI. E.I. SANMATHI AND SRI. M. DILIP, ADVOCATES)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE UNDER SECTION 148A(b) OF THE ACT DATED. 17.03.2022 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2021- 22/1040971575(1) ISSUED BY THE R-2 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT

ORAL ORDER

Heard Sri. Ravi Shankar.S.V., learned counsel for the petitioner and learned counsel Sri. Dilip.M., for respondent Nos.1 to 4. Perused the writ petition papers. 2. Learned counsel Sri. Ravi Shankar.S.V. for the petitioner would submit that the proceedings initiated against the petitioner and Assessment Order at Annexure-A4 dated 27.03.2023 is an ex-parte order. The petitioner had no opportunity to file objections to any of the Notices. Moreover, it is submitted that the entire income received from sale of the property is taken into consideration for determining the income of the petitioner. It is submitted that the property was joint family property and the same is sold by mother, brother and sister of the petitioner, who had equal share in the property. Further, it is submitted that the petitioner had no opportunity to explain the same. Hence, he prays for an opportunity to participate in the proceedings by filing objection to Notice issued under Section 148A(b) of the Income Tax Act, 1961 (for short '1961 Act').

3.

Per contra, Sri. Dilip.M., learned counsel for the respondents would submit that the petitioner had an opportunity to file objection having received Notice issued by the respondents but he has failed to utilize the opportunity provided. In the said circumstances, he submits that the petitioner would not be entitled for any opportunity. 4. Having heard the learned counsels for the parties and on perusal of the entire writ petition papers, I am of the view that the petitioner would be entitled for an opportunity to file objection to Notice issued under Section 148A(b) of 1961 Act and to participate in the proceedings before Assessing Authority i.e., respondent No.1. It is the contention of the learned counsel for the petitioner that the Assessing Authority could not have taken entire sale consideration for determining the income of the petitioner since the entire sale consideration is to be divided among family members since property sold was joint family property i.e., mother, brother and sister of the petitioner who succeeded to the property on the death of their father. The said contention is to be put-forth before Assessing Authority i.e., respondent No.1.

5.

In view of the above circumstances, I am of the view that to explain the circumstances under which the property was sold and how much the petitioner would be entitled out of the total sale consideration, the matter needs to be remanded back to respondent No.1. Accordingly, the following: ORDER

(a) Writ petition is allowed and remanded;

(b) Annexure-A2 No.ITBA/AST/F/148A/ 2021-22/1042385582(1) dated 31.03.2022; Annexure-A3 bearing No.ITBA/AST/S/148_1/2021- 22/1042394062(1) dated 31.03.2022; Annexure-A4 bearing No.ITBA/AST/S/147/2022- 23/1051371332(1) dated 27.03.2023; Annexure- A5 No.ITBA/PNL/F/271(1)(b)/2023- 24/1056103266(1) dated 14.09.2023; Annexure- A6 No.ITBA/PNL/F/271F/2023- 24/1056103269(1) dated 14.09.2023; Annexure- A7 No.ITBA/PNL/F/271(1)(c)/2023- 24/1056574626(1) dated 26.09.2023 are quashed;

(c) The petitioner to appear before respondent No.1 on 13.02.2025 and file objection to Annexures-A and A1, Notices issued under Section 148A(b) of 1961 Act. Thereafter, respondent No.1 shall proceed further in accordance with law; (d) The petitioner shall deposit a sum of Rs.3,00,000/- before respondent No.1-Assessing Authority on or before the date of appearance and the said deposit would be subject to the outcome of the order that is to be passed by the Assessing Authority- respondent No.1.

All contentions of the parties are left open. Sd/- (S.G.PANDIT) JUDGE SMJ List No.: 1 Sl No.: 30

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