SRI. BASAVARAJU MUNINARAYANA vs. INCOME TAX OFFICER

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WP/7748/2023HC KarnatakaKAHC01017840202321 April 2023Author: B M SHYAM PRASAD5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka allowed the writ petitions. The Court quashed the impugned assessment orders dated 05.07.2021 and the attachment orders dated 04.11.2022. The proceedings were restored for reconsideration by the third respondent (Assistant Commissioner of Tax). The petitioner was directed to appear before the third respondent on 03.05.2023 without further notice and was granted liberty to file detailed submissions. The Court's reasoning was based on its previous interference in similar circumstances, as evidenced by the order dated 16.03.2023 in W.P.No.4943/2017 c/w. W.P.No.4847/2023. The issue regarding the penalty order under Section 270A was implicitly set aside as part of the overall quashing of the assessment and attachment orders, and the restoration of proceedings for reconsideration.

What were the facts?

The petitioner, Sri. Basavaraju Muninarayana, filed two writ petitions before the High Court of Karnataka challenging assessment orders and attachment orders passed by the third respondent, the Assistant Commissioner of Tax, Central Circle-2(4). WP No. 7748 of 2023 pertains to Assessment Year (AY) 2019-20, and WP No. 7750 of 2023 pertains to AY 2018-19. The petitioner sought directions to furnish a satisfaction note prepared by the transferring Assessing Officer, mandatory under Section 153C of the Income Tax Act, 1961, and to quash the attachment orders dated 04.11.2022 and penalty orders dated 28.02.2022 passed under Section 270A of the IT Act. The petitioner argued that in similar circumstances, the High Court had interfered with assessment orders and restored proceedings for reconsideration.

What were the issues?

1. Whether the respondents should be directed to furnish the satisfaction note prepared by the transferring Assessing Officer, which is mandatory under Section 153C of the Income Tax Act, 1961, for AY 2019-20 (WP No. 7748 of 2023) and AY 2018-19 (WP No. 7750 of 2023)? 2. Whether the attachment order dated 04.11.2022 passed under Section 226 of the IT Act for AY 2019-20 (WP No. 7748 of 2023) and AY 2018-19 (WP No. 7750 of 2023) should be quashed? 3. Whether the penalty order passed under Section 270A of the IT Act dated 28.02.2022 for AY 2019-20 (WP No. 7748 of 2023) and AY 2018-19 (WP No. 7750 of 2023) should be quashed? Assessee's Contention: The petitioner argued that the satisfaction note under Section 153C is mandatory. The petitioner also relied on a previous order of the High Court dated 16.03.2023 in W.P.No.4943/2017 c/w. W.P.No.4847/2023, where similar circumstances led to the restoration of proceedings. Revenue's Contention: No specific arguments for the revenue were recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 153C,Section 226,Section 270A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF APRIL, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 7748 OF 2023 (T-IT) C/W WRIT PETITION NO.7750 OF 2023 (T-IT) BETWEEN:

SRI. BASAVARAJU MUNINARAYANA S/O BASAVARAJU, AGED 38 YEARS, R/AT NO.10, LAKSHMI NILAYA, MUNESHWARA TEMPLE ROAD, NAGASHETTIHALLI, BANGALORE-560094.

…PETITIONER (BY SRI. ARAVIND V CHAVAN.,ADVOCATE) AND:

1.

INCOME TAX OFFICER WARD-6(2) (4) BMTC BUILDING, 60 FEET ROAD, KORAMANGALA,

2.

PRINCIPAL COMMISSIONER OF INCOME TAX-6 BMTC BUILDING, 80 FEET ROAD, KORAMANGALA,

3.

ASSISTANT COMMISSIONER OF TAX

Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

C.R.BUILDING, BANGALORE-560 001.

4.

PRINCIPAL COMMISSIONER OF TAX CENTRAL CIRCLE, C.R.BUILDING, BANGALORE-560 001.

…RESPONDENTS (BY SRI.E.I. SANMATHI., ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECTING THE RESPONDENTS TO FURNISH THE SATISFACTION NOTE PREPARED IN THE CASE OF THE ASSESSEE BY TRANSFERRING ASSESSING OFFICER RESPONDENT NO.

TO THIRD RESPONDENT WHICH IS MANDOTORY U/S. 153C OF IT ACT

A.Y. 2019-20; QUASH ATTACHMENT ORDER PASSED U/S. 226 OF THE IT ACT DATED 04.11.2022 BEARING NO.ITBA/COM/F/ 17/2022-23/1046907033(1) ANNEXURE-F1 PASSED BY THIRD RESPONDENT FOR ASSESSMENT YEAR 2019-20; QUASH THE PENALTY ORDER PASSED U/S. 270A OF THE IT ACT DATED 28.02.2022 BEARING NO ITBA/PNL/ F/270A/2021-22/ 1040164451991) ANNEXURE-D2 PASSED BY THIRD RESPONDENT FOR ASSESSMENT YEAR 2019-20.

IN WP NO.7750/2023

BETWEEN:

SRI. BASAVARAJU MUNINARAYANA S/O. BASAVARAJU AGED 38 YEARS, R/AT. NO.10, LAKSHMI NILAYA, MUNESHWARA TEMPLE ROAD,

NAGASHETTIHALLI, BANGALORE-560094. …PETITIONER

(BY SRI. ARAVIND V CHAVAN.,ADVOCATE) AND:

1.

INCOME TAX OFFICER WARD-6(2)(4), BMTC BUILDING 80 FEET ROAD KORAMANGALA,

2.

PRINCIPAL COMMISSIONER OF INCOME TAX-6, BMTC BUILDING 80 FEET ROAD KORAMANGALA,

3.

ASSISTANT COMMISSIONER OF TAX, C.R. BUILDING, BANGALORE-560001.

4.

PRINCIPAL COMMISSIONER OF TAX, C.R. BUILDING, BANGALORE-560001. …RESPONDENTS (BY SRI.E.I. SANMATHI., ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECTING THE RESPONDENTS TO FURNISH THE SATISFACTION NOTE PREPARED IN THE CASE OF THE ASSESSEE BY TRANSFERRING ASSESSING OFFICER RESPONDENT NO.1 TO THIRD RESPONDENT WHICH IS MANDATORY U/S. 153C OF IT ACT A.Y. 2018-19; QUASH

ATTACHMENT ORDER PASSED U/S. 226 OF THE IT ACT DATED 04.11.2022 BEARING NO.ITBA/ COM/ F/17/2022-23/1046907033(1) ANNEXURE-F1 PASSED BY THIRD RESPONDENT FOR ASSESSMENT YEAR 2018- 19; QUASH THE PENALTY ORDER PASSED U/S. 270A OF THE IT ACT DATED 28.02.2022 BEARING NO ITBA/PNL/F/270A/2021-22/104016420(1) ANNEXURE- E2 PASSED BY THIRD RESPONDENT FOR ASSESSMENT YEAR 2018-19 AND ETC.

THESE PETITIONS, COMING ON PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

The petitioner is aggrieved by the third respondent's assessment orders dated 05.07.2021 for the assessment years viz., 2019-20 and 2018-19 respectively and the attachment orders issued under Section 226 the Income Tax Act, 1961. It is submitted that in similar circumstances that are canvassed as in these petitions, this Court has interfered with the assessment orders restoring the proceedings to the third respondent for reconsideration with liberty to the petitioner to file detailed submissions. In support of this submission, a copy of this Court's order dated

16.03.2023 in W.P.No.4943/2017 c/w. W.P.No.4847/2023 is placed on record.

On perusal of the records, the petitions are allowed quashing the impugned assessment orders dated 05.07.2021 and the attachment order dated 04.11.2022 [Annexures -A and F1 respectively in these writ petitions] restoring the proceedings for reconsideration by the third respondent. The petitioner shall appear before the third respondent without further notice on 03.05.2023. The petitioner shall be at liberty to file detailed submissions.

Sd/- JUDGE

SA ct:sr

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