SRI CHOWDESHWARI CREDIT CO OP SOCIETY vs. THE INCOME TAX OFFICER

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WP/16365/2023HC KarnatakaKAHC01038385202306 February 2024Author: S.R.KRISHNA KUMAR7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition. It noted that the impugned order under Section 148A(d) did not provide sufficient details regarding the service of the notice on the petitioner, merely stating service via e-mail without further particulars. Given the petitioner's assertion that their inability to file a reply was due to bonafide reasons and unavoidable circumstances, the Court adopted a justice-oriented approach. It set aside the impugned order dated 27.03.2022 under Section 148A(d), the notice dated 29.03.2022 under Section 148, and the assessment order dated 18.03.2023 under Section 147 read with Section 144. The matter was remitted back to the Income Tax Officer from the stage of issuing the notice under Section 148A(d). The petitioner was granted liberty to file their response, and the respondents were directed to provide a reasonable opportunity and hear the petitioner before proceeding in accordance with the law. The penalty notices were not explicitly dealt with in the operative part of the order, but the setting aside of the assessment order would likely impact them.

What were the facts?

The petitioner, Sri Chowdeshwari Credit Co Op Society, filed a writ petition before the High Court of Karnataka challenging several orders and notices issued by the Income Tax Officer for the assessment year 2018-19. The challenged orders include an order under Section 148A(d) dated 27.03.2022, a notice under Section 148 dated 29.03.2022, an assessment order under Section 147 read with Section 144 dated 18.03.2023, and penalty notices under Sections 270A, 271AAC(1), and 272A(1)(d) dated 18.03.2023 and 24.02.2023 respectively. The primary contention of the petitioner was that the notice under Section 148A(b) was not served upon them, but rather on their Chartered Accountant who was not engaged for these proceedings, and was also served at an old address. Consequently, the petitioner claimed to be unaware of the proceedings.

What were the issues?

1. Whether the notice under Section 148A(b) of the Income Tax Act, 1961, and consequently the order under Section 148A(d) of the Act, were validly served upon the petitioner for the assessment year 2018-19, thereby conferring jurisdiction on the respondent to proceed further? The petitioner argued that the notice under Section 148A(b) was not served on them but on their Chartered Accountant, who was not authorized for the purpose, and was sent to an incorrect address. They contended that due to this lack of proper service, they were unaware of the proceedings and the subsequent orders and notices were therefore liable to be quashed. The petitioner sought a remand to provide their objections to the Section 148A(b) notice. The revenue, represented by its counsel, argued that the petition had no merit and was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(d),Section 148,Section 147,Section 144,Section 270A,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 6TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 16365 OF 2023 (T-IT) BETWEEN:

SRI CHOWDESHWARI CREDIT CO OP SOCIETY NO.2918 DODDAIAHNA PALYA, HALEPALYA ROAD TIPTUR TQ TIPTUR – 572 201 PAN AAJAS6686G REGISTERED U/S THE CO OPERATIVE SOCIETIES ACT 1959 REP BY: CEO MRUTHYUNJAYA A C AGED ABOUT 54 YEARS S/O CHANNABASAVARADHYA A B NEAR RAILWAY STATION ALAAGUPPE POST TIPTUR TALUK TUMKUR DIST – 572 201 …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER INCOME TAX DEPARTMENT WARD -1 TIPTUR, TUMKUR NH-206 BANGALORE - HONAVAR ROAD TIPTUR – 572 201

2.

THE PRINCIPAL COMMISSIONER OF INCOME TAX-2 THE OFFICE OF THE PRINCIPAL

COMMISSIONER OF INCOME TAX

C R BUILDING QUEENS ROAD BANGALORE – 560 001

Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA

3.

NATIONAL FACELESS ASSESSMENT CENTRE,

ADDITIONAL/JOINT/DEPUTY/ASSISTANT

COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER.

(“NFAC” FOR THE SAKE OF CONVENIENCE)

INCOME TAX DEPARTMENT,

MINISTRY OF FINANCE,

ROOM NO.401, 2ND FLOOR, E-RAMP,

JAWAHARLAL NEHRU STADIUM,

DELHI – 110 003 …RESPONDENTS (BY SRI.M.DILIP., ADVOCATE)

THIS WP IS UNDER ARTICLES 226 AND 227 FILED PRAYING TO-QUASH THE ORDER U/S 148A(D) OF THE ACT DTD 27.03.2022 BEARING DIN NO.ITBA/AST/F/148A/2021-22/1041711429(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A & ETC.,

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

ORDER

In this petition, the petitioner seeks for the following reliefs. “i) nature of a writ of certiorari quashing the order under Section 148 (A)(d) of the Act dated 27.03.2022 bearing DIN No.ITBA/AST/F/148A/2021-22/1041711429(1) issued by the marked as Annexure – A.

ii) nature of a writ of certiorari quashing the order under Section

of Act 29.03.2022 No.ITBA/AST/S/148_1/2021-22/1041867771 (1) issued by

the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure – A1. iii) nature of a writ of certiorari quashing the order passed U/s

r.w.s

18.03.2023 No.ITBA/AST/S/147/2022-23/1050946942 (1) issued by the marked as Annexure – A2.

iv) nature of a writ of certiorari quashing the penalty notice U/s 270A of Act 18.03.2023 No.ITBA/PNL/S/270A/2022-23/1050946970 (1) issued by the marked as Annexure – A3. v) nature of a writ of certiorari quashing the penalty notice dated 18.03.2023 issued u/s 271AAC(1) of the ACT bearing and Notice No. ITBA/PNL/S/271A/2022- 23/10509469701(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure – A4. vi) nature of a writ of certiorari quashing the penalty notice dated 24.02.2023 issued u/s 272A(1)(d) of the ACT bearing DIN and Notice No. ITBA/PNL/S/271A(1)(d)_FL/2022-23/ 1050083816 (1) issued by the Respondent No.1 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 the learned counsel for the petitioner and learned counsel for respondents and perused the material on record.

3.

In addition to reiterating the various contentions urged in the present petition and referring to the material on record, the learned counsel for the petitioner submits that the impugned notice under Section 148A(b) of the Income Tax Act, 1961 [for short, 'the IT Act'] dated 27.03.2022 vide Annexure-A and etc., was not served upon the petitioner, but was served on the Chartered Accountant, who was neither instructed nor engaged by her for the purpose of the said proceedings. It is also contended that the said notice was served on the petitioner's earlier address and not at the address where the petitioner was residing at the time of issuance of the said notice. It was therefore submitted that the petitioner was completely unaware of the impugned proceedings pursuant to the notice under Section 148A(b) of the IT Act and consequently, the impugned order under Section 148A(d) of the IT Act dated

29.03.2022 [Annexure-A1] and all consequential notices deserve to be quashed and the matter remitted back to the respondent No.1 - the Income Tax Officer, Ward, Tiptur for reconsideration afresh by providing an opportunity petitioner file her objections/documents to the notice under Section 148A(b) of the IT Act and 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 no details/particulars as to when and how the notice was served upon the petitioner is forth coming in the impugned order. In this context, except for stating that the petitioner has been duly served via E- mail, the respondent No.1 has not provided further details in the impugned order and in the light of the specific assertion on the part of the petitioner that her inability and omission to file reply to the notice under Section 148A(b) of the IT Act and contest the proceedings, was due bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate

to adopt a justice oriented approach and provide one more opportunity to the petitioner and set aside the impugned order dated 27.03.2022 under Section 148A(d) of the IT Act and remit the matter back to the concerned respondent for reconsideration afresh in accordance with law. 6. In the result, the following: ORDER (i) The petition is hereby allowed. (ii) The impugned order dated 27.03.2022 under Section 148A(d) of the IT Act [Annexure-A], the Notice dated 29.03.2022 under Section 148 of the IT Act [Annexure-A1] and Assessment Order 18.03.2023 under Section 147 read with Section 144 of the IT Act [Annexure-A2], are hereby set aside. (iii) The matter is remitted back to the respondent No.1 - the Income Tax Officer, Ward, Tiptur from the stage of issuance of notice under Section 148A(d) of the IT Act.

(iv) Liberty is reserved liberty in favour of the petitioner to file his response/reply, documents etc., to the said notice which shall be considered by the respondents who shall provide sufficient and reasonable opportunity to the petitioner and hear him and proceed further in accordance with law.

Sd/- JUDGE

DHA List No.: 2 Sl No.: 33

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