BHAVANI GLASS AND PLYWOOD TRADERS vs. THE INCOME TAX OFFICER

PDF · subscribers
WP/2367/2024HC KarnatakaKAHC01002936202412 March 2024Author: S.R.KRISHNA KUMAR6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition. It noted that it was undisputed that the petitioner had not submitted a reply to the Section 148A(b) notice. However, considering the petitioner's assertion that they would submit a reply if granted another opportunity, the Court found it just and appropriate to set aside the impugned order under Section 148A(d) and subsequent notices/orders. The matter was remitted back to the Income Tax Officer (Respondent No.1) for reconsideration. The Court directed the petitioner to appear before Respondent No.1 on April 22, 2024, to file their reply and documents, and Respondent No.1 was directed to provide a sufficient opportunity to be heard and proceed in accordance with law. The ratio decidendi is that procedural fairness requires an opportunity to be heard, especially when a party demonstrates bonafide reasons for non-compliance and seeks a chance to rectify it.

What were the facts?

The petitioner, Bhavani Glass and Plywood Traders, is challenging several notices and orders issued by the Income Tax Department for the assessment year 2018-19. These include a notice under Section 148A(b) dated March 17, 2022, an order under Section 148A(d) dated March 31, 2022, a notice under Section 148 dated March 31, 2022, an order under Section 147 r.w.s. 144 dated March 16, 2023, a penalty order under Section 271AAC(1) dated August 30, 2023, and a penalty order under Section 272A(1)(d) dated August 22, 2023. The petitioner claims the notice under Section 148A(b) was not served as they had stopped business in 2014 and it was not sent to their existing email, leading to their inability to respond. The Revenue contended there was no merit in the petition.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, dated March 17, 2022, was properly served on the petitioner, considering the petitioner had ceased business operations in 2014 and allegedly did not receive the notice. Assessee's Contention: The petitioner argued that the notice under Section 148A(b) was not served upon them, as they had stopped carrying on business in 2014. They claimed the notice was not sent to their existing email and they were unaware of it, preventing them from submitting a reply. They asserted this omission was due to bonafide reasons and unavoidable circumstances, and sought an opportunity to respond. Revenue's Contention: The respondent Revenue submitted that there was no merit in the petition and it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 271AAC(1),Section 272A(1)(d)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF MARCH, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.2367 OF 2024 (T-IT) BETWEEN:

BHAVANI GLASS AND PLYWOOD TRADERS CHURCH COMPLEX, K R ROAD, DAVANGERE, DAVANGERE 577001 REPRESENTED BY ITS AUTHORISED SIGNATORY SMT JYOTHI G MEHARWADE, D/O LATE SHRI JAWAHAR JARTARKAR, AGED ABOUT 40 YEARS, NO.4709/50, 5TH MAIN, 4TH CROSS, S S LAYOUT, B BLOCK DAVANGERE 577 001. …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER WARD-1, SHREE TOWERS,

HADADI MAIN ROAD, OPP DRR HOSPITAL, DAVANGERE - 577 002.

2.

NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL /

JOINT/DEPUTY/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.

Digitally signed by VANDANA S Location: High Court of Karnataka

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 THE OFFICE OF THE PRINCIPAL

COMMISSIONER OF INCOME TAX,

BMTC BUILDING,

BANGALORE 560 095. …RESPONDENTS (BY SRI.M.DILIP, ADVOCATE)

THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE U/S 148A(b) OF THE ACT DTD 17.03.2022 BEARING DIN NO.ITBA/AST/F/148A(SCN)/2021-22/1040930047(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A AND ETC.

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

ORDER

In this petition, petitioner seeks the following reliefs:

“ i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148A(b) of the Act dated 17.03.2022 bearing DIN No.ITBA/AST/F/148A(SCN)/2021-22/1040930047(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure-A.

ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order under Section 148A(d) of the Act dated 31.03.2022 bearing DIN No. ITBA/AST/F/148A/2021-22/1042383074 (1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure-A1.

iii) Issue a writ of certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148 of the Act dated 31.03.2022 bearing DIN No.ITBA/AST/S/148_1/2021-22/1042399594(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure-A2.

iv) nature of a writ of certiorari quashing the order passed U/s 147 r.w.s. 144 dated 16.03.2023 bearing DIN No.ITBA/ AST/S/147/2022-23/1050845038(1) issued by the Respondent No.2 for the assessment year 2018-19 herein marked as Annexure-A3.

v) nature of a writ of certiorari quashing the penalty order under Section 271AAC(1) of the Act dated 30.08.2023 bearing DIN No.ITBA/PNL/F/271AAC(1) / 2023-24 / 1055586825(1) by the Respondent No.2 for the assessment year 2018-19 herein marked as Annexure-A4.

vi) nature of a writ of certiorari quashing the penalty order dated 22.08.2023 issued U/s 272A(1)(d) of the Act bearing DIN and Notice No. ITBA/ PNL / F/272A (1)/2023- 24/1055490288(1) by the Respondent No.2 for the assessment year 2018-19 herein marked as Annexure-A5.

vii) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that notice issued by the respondents under Section 148A(b) of the Income Tax Act, 1961 (for short, ‘IT Act’), dated 17.03.2022 was not served upon the petitioner, which stopped carrying on business as long back as in the year 2014 and the same was not sent to the existing e-mail and not received by petitioner and he was not aware of the notice and consequently, petitioner could not submit its reply / response along with documents to the said notice. It is submitted that the inability and omission on the part of the petitioner to submit reply / response along with documents to the Section 148A(b) notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, if one more opportunity is provided to the petitioner to do so by setting aside the impugned orders and notices, the petitioner would do so and respondents may be directed to proceed further in accordance with law.

4.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 5. A perusal of the impugned order will indicate that it is an undisputed fact that petitioner has not submitted reply / response along with documents to Section 148A(b) notice. Under these circumstances, in view of the specific assertion on the part of the petitioner that if one more opportunity is granted, petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned order at Annexure – A1 dated 31.03.2022 passed under Section 148A(d) of the IT Act and subsequent notice / orders, etc., and remit the matter back to respondent No.1 for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 148A(b) notice and to proceed further in accordance with law. 6. In the result, pass the following: ORDER (i) The petition is hereby allowed.

(ii) Impugned notices / orders at Annexures A, A1, A2, A3, A4 and A5 are hereby set aside. (iii) Matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 148A(b) of the IT Act at Annexure – A dated 17.03.2022. (iv) Petitioner is directed to appear before respondent No.1 on 22.04.2024 without awaiting further notice from respondent No.1. (v) Petitioner is reserved liberty to file reply / response along with documents on 22.04.2024, pursuant to which, respondent No.1 shall provide sufficient and reasonable opportunity to the petitioner and hear them and proceed further in accordance with law.

SD/- JUDGE

SV List No.: 1 Sl No.: 12

More judgments on Section 148A(b)

All 524 judgments and leading authorities on Section 148A(b) →

Recent GST High Court judgments

Search GST case law →