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1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 11TH DAY OF AUGUST, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No. 10722 OF 2022 (T-IT) BETWEEN: BHAGEERATHI BAI NARAYANA RAO MAANAY CHARITIES REPRESENTED BY NARAYANA RAO MAANAY, HAVING OFFICE AT-PB NO. 7087, 27TH CROSS, 12TH MAIN ROAD, BANASHANKARI IIND STAGE, BANGALORE-560 070.
…PETITIONER (BY SRI. CHALLA KODANDARAM., SENIOR COUNSEL FOR MS. JYOTHI RATNA ANUMOLU., ADVOCATES) AND: 1 . INCOME TAX OFFICER
ITO (EXEMPTIONS) WARD 1,
59, HMT BHAVAN, 3RD FLOOR,
BALLARI ROAD, DENA BANK COLONY,
GANGANAGAR,
BANGALORE-560 032. 2 . PRINCIPAL COMMISSIONER OF INCOME TAX
(EXEMPTIONS) ROOM NO.2602, E2,
CIVIC CENTRE, NEW DELHI-110002. 3 . UNION OF INDIA
THROUGH-CENTRAL BOARD OF DIRECT TAXES
DEPARTMENT OF REVENUE, MINISTRY OF FINANCE,
NORTH BLOCK,
NEW DELHI-110002.
…RESPONDENTS (BY SRI.K.V.ARAVIND., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE
2 THE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER SECTION 148A (B) OF THE INCOME TAX ACT, BY R-1 ANNEXURE-A AND CONSEQUENT ORDER PASSED UNDER SECTION 148A (D) OF THE INCOME TAX ACT DTD: 25.03.2022 PASSED BY R-1 ANNEXURE-B AND NOTICE ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT 1961 ANNEXURE-C BY R-1 AND NOTICE UNDER SECTION 142(1) OF THE INCOME TAX ACT DTD: 10.05.2022 BY R-1 ANNEXURE-D AND ALL OTHER CONSEQUENTIAL PROCEEDINGS AND ETC.
THIS W.P. COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER
In this petition, petitioner has sought for the following reliefs:- (i) Issue a writ, order or direction, in the nature of Certiorari quashing and set aside the impugned show cause notice issued under Section 148A(b) of the Income Tax Act bearing ITBA/AST/F/148A(SCN)/2021-22/1041051944 (1) dated 19.03.2022 by respondent No.1 at (Annexure-A) and consequent order passed under Section 148A(d) of the Income Tax Act bearing order No. ITBA/AST/F/148A/2021- 22/1041536482(1) dated 25.03.2022 passed by respondent No.1 at (Annexure-B) and Notice issued under Section 148 of the Income Tax Act, 1961 bearing ITBA/AST/S/148 1/2021- 22/1041633313 (1) dated 26.03.2022 passed by respondent No.1 at (Annexure-C) and Notice under Section 142(1) of the Income Tax Act bearing ITBA/AST/F/142(1)/2022-23/1042995658
3 (1) dated 10.05.2022 passed by respondent No.1 at (Annexure-D) and all other consequential proceedings;
(ii) Grant costs of the proceedings; and
(iii) Pass any such reliefs as this Hon’ble Court deems fit, in the circumstances of the case and in the interest of justice and equity.
Heard Sri.Challa Kodandaram, learned Senior counsel appearing for Ms.Jyoti Ratna Anumolu for the petitioner and Sri.K.V.Aravind, learned counsel for the respondents – Revenue and perused the material on record.
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner invited my attention to the impugned Notice dated 19.03.2022 issued by the respondents under Section 148A(b) of the Income Tax Act, 1961, (for short ‘the I.T.Act’) in order to point out that in the said Notice, the petitioner – assessee was called upon to show cause with reference to two transactions detailed in the Annexure to the said Notice. The petitioner submitted its reply dated 22.03.2022 intimating the
4 respondents that he had already filed his returns for the subject assessment year 2015 – 16 and enclosed a copy of the same. Subsequently, the respondents passed the impugned order dated 25.03.2022 under Section 148A(d) which was followed by the impugned notice dated 26.03.2022 under Section 148 of the I.T. Act as well as subsequent notice dated 10.05.2022 issued under Section 142(1) of the I.T. Act calling upon the petitioner to furnish / produce accounts and documents on or before 17.05.2022. It is contended that on 17.05.2022, the petitioner submitted its detailed reply to the respondents along with documents and instead of accepting the same, respondents are proceeding further in the matter. It is also pointed out that a perusal of the impugned notice under Section 148A(b) dated 19.03.2022 will indicate that the same relates to only two transactions, while the impugned order dated 25.03.2022 passed under Section 148A(d) is in respect of three transactions i.e., one additional transaction which was not the subject matter of the notice issued under Section 148A(b) referred to supra and consequently, the impugned order dated 25.03.2022 and subsequent notices are illegal,
5 arbitrary and without jurisdiction or authority of law and the same being violative of principles of natural justice, deserves to be quashed.
Per contra, learned counsel for the respondents – revenue submits that there is no merit in the petition and that the same is liable to be dismissed.
I have given my anxious consideration to the rival submissions and perused the material on record.
As rightly contended by the learned Senior counsel for the petitioner, a perusal of the impugned notice dated 19.03.2022 issued under Section 148A(b) of the I.T.Act will indicate that the same is restricted to only two transactions as detailed in the Annexure, while the impugned order dated 25.03.2022 is in relation to an additional transaction which was never the subject matter of the notice referred to supra. The material on record also discloses that despite the petitioner submitting its detailed reply to the notices, the same have not been considered by the respondents either at the time of passing the impugned
6 orders or at the time of issuing the subsequent notices. Under these circumstances, I am of the considered opinion that the impugned order dated 25.03.2022 as well as the subsequent notices dated 26.03.2022 and 10.05.2022 are illegal, arbitrary and violative of principles of natural justice and the same deserve to be quashed and liberty reserved in favour of the respondents to proceed further in accordance with law, pursuant to the notice dated 19.03.2022 after providing sufficient opportunity to the petitioner and hearing him in accordance with law. 7. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned order at Annexure-B dated 25.03.2022 and the impugned Notice at Annexure-C dated 26.03.2022, both passed / issued by the 1st respondent as well as the impugned notice at Annexure-D dated 10.05.2022 issued by the 2nd respondent are hereby quashed.
7 (iii) Liberty is reserved in favour of the concerned respondents to proceed further in accordance with law pursuant to the notice dated 19.03.2022 vide Annexure-A issued under Section 148A(b) of the I.T.Act and pass appropriate orders after providing sufficient opportunity and hearing the petitioner in accordance with law. (iv) Liberty is also reserved in favour of the petitioner to submit additional pleadings, reply, documents etc., before the respondents, who shall consider the same and proceed further as stated supra. (v) All rival contentions between the parties are kept open and no opinion is expressed on the same. Sd/- JUDGE Srl.