SRI GURUPRASAD TULAHALLI SHETRU vs. INCOME TAX OFFICER

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WP/209/2025HC KarnatakaKAHC01000147202513 January 2025Author: S.G.PANDIT7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the matter needed reconsideration by Respondent No. 1. It was noted that Respondent No. 2 issued a notice under Section 148A(b) for Assessment Year 2016-17, to which the petitioner filed replies on March 25, 2023, and March 26, 2023. The file was transmitted to Respondent No. 1 for international taxation. Respondent No. 1 passed an order under Section 148A(d) noting that the assessee had not submitted a reply, which was factually incorrect as objections were filed on March 25, 26, and April 13, 2023. Since Respondent No. 1 had not considered the objections, which included documents showing the petitioner had obtained a bank loan, the matter required reconsideration. The Court quashed several notices and orders, including Annexures A2, A3, A4, A5, A6, and A7, and directed Respondent No. 1 to consider the petitioner's objections dated March 26, 2023, March 25, 2023, and April 13, 2023, and pass an appropriate order.

What were the facts?

The petitioner, Sri. Guruprasad Tullahalli Shetru, a US resident with an Indian permanent address, filed a writ petition challenging a notice under Section 148A(b) of the Income Tax Act, 1961, dated March 20, 2023, issued by Respondent No. 2 (Income Tax Officer, Ward 1 and TPS, Tumkur) for Assessment Year 2016-17. The petitioner argued that a loan taken by him was treated as income, and the subsequent order under Section 148A(d) passed by Respondent No. 1 (Income Tax Officer, Ward Intl. Taxation 1(1), Bangalore) was done without considering the objections filed by the petitioner, which included documents demonstrating the loan was from a bank. The revenue, represented by learned counsel, could not dispute the factual position and conceded that Respondent No. 1 appeared to have not considered the petitioner's objections.

What were the issues?

1. Whether the order passed by Respondent No. 1 under Section 148A(d) of the Income Tax Act, 1961, is liable to be quashed for having been passed without considering the objections filed by the petitioner? (Question of law and fact, turning on Section 148A(d)). Assessee's Contentions: - The loan taken by the petitioner was treated as income, leading to the issuance of the notice under Section 148A(b). - The order under Section 148A(d) was passed by Respondent No. 1 without considering the objections filed by the petitioner, which included documents proving the loan was from a bank. - If the objections had been considered, the proceedings would have been dropped. - The matter should be remanded to Respondent No. 1 for fresh consideration of the objections. Revenue's Contentions: - The revenue's counsel could not dispute the factual position that the objections filed by the petitioner were not taken note of by Respondent No. 1 while passing the order under Section 148A(b) and the final assessment order.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 209 OF 2025 (T-IT) BETWEEN: SRI. GURUPRASAD TULAHALLI SHETRU, S/O KUMARASWAMY, AGED ABOUT 45 YEARS, SAN JOSE, CA, USA-95123, PERMANENT ADDRESS, NO.3714/59, 13TH CROSS, MCC A BLOCK, SOUTHERN EXTENSION-DVG S.O, DAVANAGERE-577 004, PREVIOUSLY RESIDING AT, NO.2222/1, RAILWAY STATION ROAD, GANDHI NAGAR, TUMKUR-572 101, PAN ADJPT7255Q REPRESENTED BY, P O A HOLDER OF THE PETITIONER, MRS KALAVATHI B, AGED ABOUT 46 YEARS, D/O G. BASAVARAJU, NO.2008, 1ST C MAIN ROAD, RPC LAYOUT, VIJAYANAGAR 2ND STAGE, BANGALORE-560 040 …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE) Digitally signed by KAVYA R Location: High Court of Karnataka

AND: 1. INCOME TAX OFFICER, WARD INTL. TAXATION 1(1), BANGALORE 560 095. 2. INCOME TAX OFFICER, WARD 1 AND TPS, TUMKUR-572 103. 3. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (IT), ROOM NO. 317, 3RD FLOOR, E-2 BLOCK, DR. S.P. MUKHERJEE CIVIC CENTRE, MINTO ROAD, NEW DELHI 110 002. …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. 20.03.2023 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2022- 23/1050967518(1) ISSUED BY THE R-2 FOR THE ASSESSMENT YEAR 2016-17 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS PETITION, COMING ON FOR ORDERS, 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 Sri. E.I.Sanmathi and Sri. M.Dilip., learned counsels for respondent Nos.1 to 3. Perused the writ petition papers. 2. Learned counsel for the petitioner would submit that the petitioner is before this Court under Article 226 of the Constitution of India, questioning the Notice dated 20.03.2023 No.ITBA/AST/F/148A(SCN)/2022-23/1050967518(1) issued under Section 148A(b) of the Income Tax Act, 1961 (for short '1961 Act') as well as order passed under clause (d) of Section 148A of 1961 Act and also Notice under clause (b) of Section 148A of 1961 Act (Annexure-A1) issued by respondent No.2. 3. Learned counsel for the petitioner submits that the loan taken by the petitioner is taken as income and Notice under Section 148A(b) of 1961 Act is issued. Learned counsel invites attention of this Court to Annexure-A2, Order passed under clause (d) of Section 148A of the 1961 Act by respondent No.1 and submits that the same is passed without looking into

the objection filed by the petitioner. Learned counsel further invites attention of this Court to objection filed enclosing the documents, which are placed on record as Annexure-D at Page- 90 and also Annexure-E at Page-119 of the writ petition and submits that the Order passed by respondent No.1 is without looking into the objections. Further learned counsel for the petitioner would submit that if respondent No.1 had looked into the objections filed by the petitioner, respondent No.1 would have dropped further proceedings. Thus, learned counsel for the petitioner prays for remanding the matter to respondent No.1 for consideration afresh taking note of the objections filed by the petitioner. 4. Per contra, learned counsel Sri. E.I.Sanmathi is not in a position to dispute the factual position and fairly submits that respondent No.1 appears to have not taken note of the objections filed by the petitioner while passing Order under Section 148A(b) of 1961 Act and also Final Assessment Order at Annexure-A4 dated 27.04.2024.

5.

Having heard the learned counsels for the parties and on perusal of the writ petition papers, I am of the view that the matter needs reconsideration by respondent No.1. 6. The matter relates to Assessment Year 2016-17. Respondent No.2 issued Annexure-A, Notice under clause (b) of Section 148A of 1961 Act, calling upon the petitioner to show- cause as to why, in view of the details contained in the enclosed documents, a Notice under Section 148 of 1961 Act should not be issued. The petitioner submitted his reply on 25.03.2023 as at Annexure-D2 and submitted one more reply on 26.03.2023 (Annexure-D). Thereafter, respondent No.2 transmitted the file to respondent No.1 since it related to International Taxation. Respondent No.1 proceeded to pass orders as at Annexure-A2 dated 20.04.2023 under clause (d) of Section 148A of 1961 Act and a perusal of the Order indicates that while passing the orders, respondent No.1 noted that Assessee has not submitted reply. But factually, the said finding is not correct and the petitioner in fact filed objection on 25.03.2023 as well as 26.03.2023 and in addition, the objection was filed before respondent No.1 on 13.04.2023 (Annexure-E). Since respondent No.1 has not taken note of the

objections filed by the petitioner enclosing document to show that the petitioner had obtained loan from the Bank, the matter needs reconsideration. The 1st respondent was obliged to consider the objections filed and then ought to have proceed to pass order under Section 148A(b) of 1961 Act. Hence, the following: ORDER (a) Writ petition is allowed; (b) Annexure-A2 bearing No.ITBA/AST/F/148A/2023- 24/1052239426(1) dated 20.04.2023; Annexure-A3 bearing No.ITBA/AST/S/148_1/2023- 24/1052239500(1) dated 20.04.2023; Annexure-A4 bearing No.ITBA/AST/S/147/2024- 25/1064406898(1) dated 27.04.2024; Annexure- A5 No.ITBA/PNL/S/271(1)(c)/2024- 25/1064406903(1) dated 27.04.2024; Annexure- A6 No.ITBA/PNL/S/271F/2024- 25/1064442239(1) dated 29.04.2024; Annexure- A7 No.ITBA/PNL/F/271(1)(b)/2024- 25/1070032512(1) dated 29.10.2024 are quashed;

(c) Respondent No.1 is directed to consider the objection filed by the petitioner at Annexure-D dated 26.03.2023; Annexure-D2 dated 25.03.2023 and Annexure-E dated 13.04.2023 and pass appropriate order in accordance with law. Sd/- (S.G.PANDIT) JUDGE SMJ List No.: 1 Sl No.: 18

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