B C LOKANATHASWAMY vs. COMMISSONER OF INCOMET TAX (APPEALS)

WP/24824/2024HC KarnatakaKAHC01052030202410 September 2024Author: S.R.KRISHNA KUMAR5 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the respondents clearly fell into error by initiating reassessment proceedings against the petitioner in respect of his earlier, surrendered PAN (AEQPL2016R) after specifically cancelling it and directing the use of the new PAN (ACDPL3925G). The Court found this action to be not only contrary to the provisions of the Income Tax Act but also without jurisdiction or authority of law. Consequently, the impugned orders at Annexure-E (dated 28.03.2023) and Annexure-G (dated 29.12.2023) were quashed. The Court also noted that the appeal filed by the petitioner on 22.01.2024 would not survive in view of the quashment of the impugned orders.

What were the facts?

The petitioner, B.C. Lokanathaswamy, was informed by the Income Tax Officer (Respondent No. 3) via a communication dated 24.01.2023 that his old PAN (AEQPL2016R) was cancelled and a new PAN (ACDPL3925G) was retained, which he was directed to use exclusively. The petitioner complied, filing returns under the new PAN. However, the respondents initiated reassessment proceedings using the old, surrendered PAN (AEQPL2016R), leading to impugned orders. The petitioner filed a writ petition seeking to quash these orders and also requested a direction for the disposal of an appeal filed on 22.01.2024.

What were the issues?

1. Whether the assessment order dated 29.12.2023 passed by the 2nd respondent under the old, deactivated PAN AEQPL2016R is liable to be quashed, considering the petitioner had surrendered this PAN and started using a new PAN (ACDPL3925G) as directed by the authorities? (Question of law and fact, concerning jurisdiction and procedural correctness under the Income Tax Act). 2. Whether the order dated 28.03.2023 passed by the 3rd respondent is liable to be quashed? Assessee's Contention: The petitioner argued that the respondents erred in initiating proceedings and passing orders under the old, cancelled PAN after specifically directing the use of a new PAN and accepting returns filed under it. This action was contrary to the Income Tax Act and without jurisdiction. Revenue's Contention: The judgment does not record any specific contentions made by the respondents.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.24824 OF 2024 (T-IT) BETWEEN:

B.C. LOKANATHASWAMY, S/O. LATE CHANNAVEERAIAH, AGED ABOUT 64 YEARS, NO.44-2, BASAVANAHALLI KOPPALU, ARAKALGUD TALUK, HASSAN DISTRICT – 573 136. …PETITIONER (BY SRI. MAHESH R UPPIN, ADVOCATE) AND:

COMMISSONER OF INCOMET TAX (APPEALS) NATIONAL FACELESS APPEALS CENTRE, ROOM NO.356, C.R.BUILDING, I.P.ESTATE, NEW DELHI – 110 002.

ASSESSING OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, DELHI – 110 002.

INCOME TAX OFFICER WARD – 1 & TPS, AAYAKAR BHAVAN, 2ND STAGE, BELUR ROAD, HASSAN – 573 201. …RESPONDENTS (BY SRI. M.THIRUMALESH, ADVOCATE)

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 28/03/2023 BEARING DIN AND NOTICE NO.ITBA/AST/F/148A/2022- 23/1051520909(1) PASSED BY THIRD RESPONDENT MARKED AS ANNX-E BY ISSUING A WRIT IN THE NATURE OF CERTIORARI AND QUASH THE ASSESSMENT ORDER DATED 29/12/2023 PASSED IN ORDER NO.ITBA/AST/S/147/2023-24/1059207106(1) PASSED BY THE R2 UNDER THE OLD DE-ACTIVATED PAN AEQPL2016R MARKED AS ANNX-G BY ISSUING A WRIT IN THE NATURE OF CERTIORARI.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks the following reliefs: (i) Quash the order dated 28.03.2023 bearing DIN Notice No.ITBA/AST/F/148A/2022-23/1051520909(1) passed by third respondent marked as Annexure – E by issuing a writ in the nature of certiorari; (ii) Quash the Assessment Order dated 29.12.2023 passed in Order No.ITBA/AST/S/147/2023-24/1059207106(1) passed by the 2nd respondent under the old de-activated PAN: AEQPL2016R marked as Annexure – G by issuing a writ in the nature of certiorari; OR in the alternative

(iii) Issue a writ in the nature of mandamus by directing the 1st respondent to dispose of the appeal Annexure J filed by the petitioner in the e-portal dated 22.01.2024 bearing Acknowledgment No.910099370230124 within a period of three months and till the disposal of the said appeal, not to make any demand of Income tax from the petitioner; and (iv) Grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice.” 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that vide Annexure – A dated 24.01.2023, respondent No.3 – Income Tax Officer addressed a Communication to the petitioner intimating him that his old / erstwhile PAN No.AEQPL2016R has been cancelled and PAN No.ACDPL3925G was retained and that the said PAN No.ACDPL3925G has to be used and petitioner should not use the earlier PAN No.AEQPL2016R any longer and in the event the petitioner were to use the earlier PAN No.AEQPL2016R, proceedings against him would be initiated by the respondents. Subsequently, the petitioner filed his returns under the new PAN No.ACDPL3925G as can be seen from Annexure – B. However,

despite the petitioner having surrendered the earlier PAN No.AEQPL2016R started using the new PAN No.ACDPL3925G, respondent proceeded to initiate the impugned proceedings by issuing notice at Annexure – C dated 21.03.2023 in relation to the earlier surrendered PAN No.AEQPL2016R, which culminated in the impugned orders. 4. The aforesaid facts circumstances clearly establishes that having specifically cancelled the earlier PAN No.AEQPL2016R and directed the petitioner to use the subsequent / new PAN No.ACDPL3925G, pursuant to which the petitioner has also filed his returns, the respondent/s clearly fell in error in initiating re-assessment proceedings against the petitioner in respect of his earlier PAN No.AEQPL2016R, which is not only contrary to the provisions of the Income Tax Act, but also without jurisdiction or authority of law warranting interference by this Court in the present petition. 5. Insofar as the request made by the petitioner to dispose of the appeal filed by him on 22.01.2024, in view of quashment of Annexures – E and G, the said appeal would not survive any longer.

In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned orders at Annexure – E dated 28.03.2023 and Annexure – G dated 29.12.2023 are hereby quashed.

Sd/- (S.R.KRISHNA KUMAR) JUDGE

SV List No.: 1 Sl No.: 46

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