MANIPAL EDUCATION AND MEDICAL vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/19188/2023HC KarnatakaKAHC01044276202302 April 2024Author: S.R.KRISHNA KUMAR5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the petitioner's contention was valid. A perusal of the assessment order dated 31.12.2019 for AY 2017-18 indicated that the issue raised in the subsequent proceedings had indeed been considered and adjudicated by the revenue. The Court found that having examined and decided the issue for AY 2017-18, the revenue was clearly estopped from initiating proceedings for the very same issue for the subsequent AY 2018-19 under Section 148A of the Income Tax Act. The Court concluded that the initiation of proceedings and the passing of the impugned order were illegal, arbitrary, and without jurisdiction or authority of law. Consequently, the writ petition was allowed, and the impugned notices and order were quashed.

What were the facts?

The petitioner, Manipal Education and Medical Group India Private Limited, filed a writ petition challenging a notice dated 22.03.2022 issued under Section 148A(b) and an order dated 28.07.2023 passed under Section 148A(d) of the Income Tax Act, 1961, for Assessment Year 2018-19. The petitioner argued that the respondents (Deputy Commissioner of Income Tax and Principal Commissioner of Income Tax) had previously passed an assessment order for Assessment Year 2017-18 on 31.12.2019, which concluded the very same issue now sought to be reopened for AY 2018-19. The petitioner contended that despite submitting a detailed reply highlighting this finality, the revenue proceeded to issue the impugned notices and order, rendering them illegal and without jurisdiction.

What were the issues?

1. Whether the impugned notice dated 22.03.2022 issued under Section 148A(b) of the Income Tax Act, 1961, for Assessment Year 2018-19 is illegal, arbitrary, and without jurisdiction, given that the same issue was concluded by an earlier assessment order dated 31.12.2019 for Assessment Year 2017-18? 2. Whether the impugned order dated 28.07.2023 passed under Section 148A(d) of the Income Tax Act, 1961, for Assessment Year 2018-19 is illegal, arbitrary, and without jurisdiction, as it reopens an issue already decided and finalized for the preceding assessment year? Assessee's Contentions: The petitioner argued that the respondents were estopped from reopening the same issue for AY 2018-19, which had already been examined and adjudicated in the assessment order for AY 2017-18. They submitted that the impugned notices and order were therefore illegal, arbitrary, and without jurisdiction. Revenue's Contentions: The revenue contended that the impugned order did not suffer from any infirmity and that the petition was devoid of merit and liable to be dismissed.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF APRIL, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No. 19188 OF 2023 (T-IT) BETWEEN:

MANIPAL EDUCATION AND MEDICAL GROUP INDIA PRIVATE LIMITED (FORMERLY MANIPAL INTEGRATED SERVICES PRIVATE LIMITED) A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956.

HAVING ITS REGISTERED OFFICE AT 24/1, 15TH FLOOR, J W MARRIOTT BENGALURU - 560 001. REPRESENTED BY ITS DIRECTOR SRI NISITH KUMAR MOHANTY AGED ABOUT 60 YEARS SON OF SRI MOHANTY. …PETITIONER

(BY SRI Ms. ANNAPOORNA, SMT. M S BHOOMIJA VERMA, Mr. ABRAHAM JOSEPH, FOR SRI MANU PRABHAKAR KULKARNI, ADVOCATES)

AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 4(1)(1), BANGALORE BMTC BUILDING 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE, KORAMANGALA BENGALURU - 560 095.

2.

PRINCIPAL COMMISSIONER OF INCOME TAX BENGALURU - 02 BMTC BUILDING 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE, KORAMANGALA BENGALURU – 560 095.

3.

DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(2), BANGALORE CENTRAL REVENUE BUILDING QUEEN'S ROAD

Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA

BENGALURU – 560 001.

4.

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) BENGALURU CENTRAL REVENUE BUILDING QUEEN'S ROAD, BENGALURU – 560 001. …RESPONDENTS

(BY SRI Y V RAVIRAJ, ADVOCATE V/O DTD. 2.04.2024)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED NOTICE DATED 22/03/2022 AS ISSUED BY R1 (WITH PRIOR APPROVAL OF R2) UNDER SECTION 148A(B) (ANNEXURE-A) IN THE CASE OF THE PETITIONER FOR ASSESSMENT YEAR 2018-19 AND ETC.,

THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

1.

In this petition the petitioner seeks for the following reliefs: i. Impugned notice dated 22.03.2022 as issued by Respondent No. 1 (with prior approval of Respondent No. 2) under Section 148A(b) (Annexure A) in the case of the petitioner for assessment year 2018-19; and ii. Impugned order dated 28.07.2023 as passed by Respondent No. 3 (with prior approval of Respondent No. 4) under section 148A(d) of the of the Act

(Annexure – B) in the case of the petitioner fir assessment year 2018-19; and iii. Impugned notice dated 28.07.2023 as issued by Respondent No. 3 under section 148 of the Act (attached as Anndxure-C) in the case of the petitioner for assessment year 2018-19.”

2.

In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for petitioner invited my attention to the assessment order as clarified in the corrigendum at Annexure M dated 31.12.2019 in order to point out that the said order was passed in relation to the assessment year 2017-18 in respect of the petitioner assessee. It is submitted that despite having passed the assessment order in relation to the assessment year 2017-18, the respondent issued the impugned notice at Annexure A dated 22.03.2022 for the subsequent year 2018-19 purporting to reopen the very same issue which had stood concluded by the earlier assessment order dated 31.12.2019 for the earlier assessment year 2017-18. It is submitted that despite the petitioner submitting a detailed reply and pointing out that the issue raised in the show cause notice under

Section 148-A(b) of the Income Tax Act (hereinafter for the sake of brevity referred to as `the I.T. Act’) for the assessment year 2018- 19 had already been covered and attained finality vide order dated 31.12.2019 for the previous assessment year, the respondent has proceeded to pass the impugned order at Annexure B dated 28.07.2023 for the assessment year 2018-19 which is not only illegal, arbitrary and without jurisdiction or authority of law and the same deserves to be set aside. 3. Per contra learned counsel appearing for the respondent – revenue would submit that the impugned order does not suffer from any infirmity and there is no merit in the petition and the same is liable to be dismissed. 4. As rightly contended by the learned counsel for the petitioner a perusal of the assessment order dated 31.12.2019 for the assessment year 2017-18 will indicate that the issue raised therein has been considered by the respondent revenue as can be seen from the said order. In other words, having examined and adjudicated upon the issue which fell for consideration in relation to the assessment year 2017-18 by passing an assessment order dated 31.12.2019, the respondent revenue was clearly estopped from initiating proceedings for the very same for the subsequent

assessment year 2018-19 under Section 148-A of the I.T. Act and issue impugned show cause notice and pass impugned order for the subsequent assessment year 2018-19 on the very same issue which stood covered by the earlier assessment order which is clearly illegal, arbitrary, without jurisdiction or authority of law and the same deserves to be quashed. 5. In the result, the following; O R D E R i. Writ petition is hereby allowed. ii. The impugned orders at Annexure A dated 22.03.2022, Annexure B dated 28.07.2023 and Annexure C dated 28.07.2023 are hereby quashed.

Sd/- JUDGE

LRS List No.: 1 Sl No.: 9

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