SRI AJEETH vs. ASSESSING OFFICER INCOME TAX OFFICER

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WP/11790/2023HC KarnatakaKAHC01028169202323 June 2023Author: S SUNIL DUTT YADAV4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the notice dated 26.07.2022, issued to the petitioner, was required to be construed as a notice under Section 148A(b) of the Income Tax Act, following the Supreme Court's decision in Union of India Vs. Ashish Agarwal. The Court noted that the order under Section 148A(d) was passed on the same date as the notice (26.07.2022), which clearly indicates that no opportunity was granted to the petitioner to file a reply or objections. Therefore, on this sole ground, the order under Section 148A(d) at Annexure-E3 was set aside. The matter was remanded to the stage post the notice at Annexure-E1. The petitioner was directed to file his objections to the notice at Annexure-E1, and the respondents were directed to proceed further in accordance with law. The assessment order at Annexure-H3 was set aside as a consequential relief. All other contentions were kept open.

What were the facts?

The petitioner, Sri. Ajeeth, filed a writ petition challenging an assessment order dated 17.05.2023 passed by the Assessing Officer (Respondent No. 1) for Assessment Year 2015-16. He also sought to quash an order dated 26.07.2022 passed by the Deputy Commissioner of Income Tax (Respondent No. 2) under Section 148A of the Income Tax Act. The petitioner argued that the notice dated 26.07.2022, purportedly under Section 148, should have been treated as a notice under Section 148A(b) in light of the Supreme Court's decision in Union of India Vs. Ashish Agarwal. The petitioner contended that the order under Section 148A(d) was passed on the same date as the notice, denying him an opportunity to file objections.

What were the issues?

1. Whether the notice dated 26.07.2022, issued under Section 148, should be construed as a notice under Section 148A(b) of the Income Tax Act, in light of the Supreme Court's ruling in Union of India Vs. Ashish Agarwal? (Question of law) Assessee's Contention: The notice dated 26.07.2022 should be treated as a Section 148A(b) notice. Following the Ashish Agarwal judgment, the assessee should be granted an opportunity to file objections to this notice. The subsequent order under Section 148A(d) should be passed only after considering these objections. This procedural step is crucial as it can lead to the dropping of proceedings if the assessee's objections are accepted. Revenue's Contention: No specific contention is recorded for the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JUNE, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 11790 OF 2023 (T-IT) BETWEEN: SRI. AJEETH S/O. LATE A.P. GIRIVASAN AGED 44 YEARS R/AT. NO.100, RAMESH NIVAS 12TH CROSS, RAMAMURTHY NAGAR BENGALURU - 560 016 …PETITIONER (BY SRI: MV. SHESHACHALA SR, ADV., SRI: ARAVIND V CHAVAN, ADVOCATE) AND: 1. ASSESSING OFFICER INCOME TAX OFFICER NATIONAL E ASSESSMENT CENTRE NO.412-413, 1ST FLOOR OPP. METRO PILLAR NO.793 DWARKA MOR NEW DELHI - 110 059. 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 4(1)(1) BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095. 3. PRINCIPAL COMMISSIONER OF INCOME TAX-4 BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095. …RESPONDENTS (BY SRI: E.I. SANMATHI, ADVOCATE) Digitally signed by B K MAHENDRAKUMAR Location: High Court of Karnataka

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO - QUASH THE ASSESSMENT ORDER DATED 17.05.2023 BEARING O.ITBA/AST/S/147/2023-24/1052911676(1) ANNEXURE-H3 PASSED BY RESPONDENT NO.1 FOR ASSESSMENT YEAR 2015-16; CONSEQUENTLY QUASH THE ORDER DATED 26.07.2022 ANNEXURE- E3 PASSED UNDER SECTION 148A OF THE IT ACT BEARING NO.ITBA/COM/F/17/2022-23/1044110762(1) PASSED BY RESPONDENT NO.2 AS IT IS CONTRARY TO THE LAW DECLARED BY THE HON'BLE SUPREME COURT IN ASHISH AGARWAL (SUPRA) AND ETC.,

THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT PASSED THE FOLLOWING: ORDER

The petitioner has sought for issuance of writ of certiorari to quash the assessment order at Annexure-H3 dated 17.05.2023 and also sought for setting aside of order at Annexure-E3.

2.

Learned Senior Counsel Shri M V Sheshachala for the petitioner submits that Section 148 notice at Annexure-E1 dated 26.07.2022 is required to be construed as 148A(b) notice in terms of the judgment of the Hon'ble Apex Court in Union of India Vs Ashish Agarwal in Civil Appeal No.3005 of 2022. It is submitted that the procedure then to the followed in terms of the amended provision and the cognate provision under Section 148 would be that the petitioner is granted opportunity to file his objections to 148A(b) notice, after which, order under

148A(d) may be passed accepting the explanation of the petitioner and dropping of the proceedings or passing of the order otherwise while proceeding to issue notice under 148. It is further submitted that this process though procedural must be construed as conferring substantive right on the petitioner assessee since if any grounds are made out in the reply to the notice under 148A(b) and the assessee is successful in convincing the authority, the proceedings itself may come to an end.

4.

It is pointed out that notice 148 was dated 26.07.2022 and the order under 148A(d) came to be passed on the same date itself. It is clear that no opportunity was granted to the petitioner to make out reply before passing 148A(d) order. Accordingly, on this sole ground, the order under 148A(d) at Annexure-E3 is set aside and the matter is remanded to the stage, post notice at Annexure-E1.

5.

The petitioner to file his objection to the notice at Annexure-E1 and the respondents to proceed further in accordance with law.

All the contentions are kept open.

Accordingly, the petition is disposed off.

The order at Annexure-H3 is set aside as consequential relief of 148A(d) order having been set aside. Sd/- JUDGE *bgn/-

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