SMT.S.B. ANNAPOORNA vs. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

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WP/15077/2023HC KarnatakaKAHC01035542202327 July 2023Author: S SUNIL DUTT YADAV4 pages
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What did the High Court hold?

The High Court held that even if an assessment order has been passed, if the initial notice suffers from a jurisdictional error, the entire proceeding initiated by such notice would be rendered bad in law. The Court found an infirmity in the notice dated 19.04.2021 because it was issued after the lapse of three years without obtaining the necessary sanction from the authority under Section 151(ii) of the Income Tax Act, 1961. Consequently, the Court allowed the petition. The notice dated 19.04.2021 (Annexure-A), the order dated 20.07.2022 (Annexure-C), the show-cause notice dated 17.03.2023 (Annexure-E), and the order dated 19.04.2023 (Annexure-F) were set aside. The respondents were granted liberty to initiate fresh proceedings as permissible in law. All contentions were kept open.

What were the facts?

The petitioner, Smt. S.B. Annapoorna, filed a writ petition before the High Court of Karnataka challenging a notice dated 19.04.2021 and a subsequent document dated 26.05.2022, both issued by the Income Tax Officer, Ward 4(2)(1), Bangalore. The respondents are various authorities of the Income Tax Department. The petitioner sought to quash these notices and documents. The respondents argued that the writ petition was filed at a belated stage as the matter had already proceeded to an assessment order. However, the Court noted that if the initial notice suffered from a jurisdictional error, subsequent orders would also be invalid.

What were the issues?

1. Whether the notice dated 19.04.2021, issued after the lapse of three years, suffers from a jurisdictional error due to the absence of sanction from the authority under Section 151(ii) of the Income Tax Act, 1961, rendering subsequent proceedings bad in law? Assessee's Contention: The petitioner implicitly argues that the notice is bad in law due to jurisdictional infirmities, particularly the lack of proper sanction. The petitioner seeks to quash the impugned notice and subsequent documents. Revenue's Contention: The respondents argued that the writ petition was filed at a belated stage, as an assessment order had already been passed, and there was no jurisdictional error in the initiation of proceedings.

Which sections of the Income-tax Act were involved?

Section 151(ii)

AI-generated summary — verify with the full judgment below

Before: SMT.S.B. ANNAPOORNA

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF JULY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 15077 OF 2023 (T-IT) BETWEEN: 1. SMT.S.B. ANNAPOORNA WIFE OF MR .K. SHANKARAPPA, AGED ABOUT 49 YEARS, RESIDING AT SAMATHENAHALLI VILLAGE ANUGONDANAHALLI HOBLI, HOSKOTE TALUK BANGALORE RURAL DISTRICT - 560 067 … PETITIONER (BY SRI. SYED KHAMRUDDIN., ADVOCATE) AND: 1. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA REGION GROUND FLOOR, CR BUILDING, NO.1, QUEENS ROAD, BENGALURU - 560 001 2. PRINCIPAL COMMISSIONER OF INCOME TAX-2. KORAMANGALA, 3. INCOME TAX OFFICER WARD 4(2) (1), BANGALORE, Digitally signed by VIJAYA P Location: High Court of Karnataka

INCOME TAX DEPARTMENT, KORAMANGALA 4. ASSESSMENT UNIT INCOME TAX DEPARTMENT, KORAMANGALA … RESPONDENTS (BY SRI. SUSHAL TIWARI., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED NOTICE DTD 19/4/2021 BEARING DIN NO.ITBA/AST/S/148/2021-22/1032518443 (1) ISSUED BY THE R-3 (ANNEXURE-A) AND DOCUMENT DTD 26.5.2022 BEARING DIN NO.ITBA/COM/F/17/2022-23/1043182336 (1) ISSUED BY THE R-3 (ANNEXURE-B) AND ETC.

THIS W.P. COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

Learned Counsel Sri Sushal Tiwari appearing on behalf of the respondent would submit that the matter is proceeded and culminated in assessment order being passed and the present writ petition has been filed at a

belated stage and nothing prevented the petitioner from approaching this Hon'ble court at an earlier point of time if there was any jurisdictional error.

2.

However, it must be noted that it is settled position of law that if notice suffers from jurisdictional error though an assessment order is subsequently passed, very initiation being bad in law, legal consequences would fallow so as to render the order which is consequential to the initial notice as being bad in law. Accordingly, though assessment order is passed, noticing the infirmity in the notice insofar as no sanction by the authority under Section 151 (ii) has been obtained, as notice is issued after the lapse of three years, the petition is allowed. The notice dated 19.04.2021 at Annexure-A, order dated 20.07.2022 at Annexure-C, show-cause notice dated 17.03.2023 at Annexure-E and order dated 19.04.2023 at Annexure-F are set aside. Liberty is reserved to the respondents to initiate fresh proceedings as is permissible

in law as regards to the subject matter of the present proceedings. All contentions are kept open. Sd/- JUDGE NP

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