ALAN BATES vs. INCOME TAX OFFICER

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WP/14094/2021HC KarnatakaKAHC01026117202108 September 2021Bench: S SUNIL DUTT YADAV11 pages
AI SummaryAllowed

What did the High Court hold?

The Court held that the amendments to Section 9 of the Income Tax Act by the Taxation Laws (Amendment) Act, 2021, meant the reopening of assessment was not sustainable. Consequently, the notices were set aside.

What were the facts?

The petitioners challenged notices issued under Section 148 of the Income Tax Act for Assessment Year 2012-13. They argued that amendments made by the Taxation Laws (Amendment) Act, 2021, rendered the reopening of assessment invalid.

What were the issues?

Whether amendments to Section 9 of the Income Tax Act by the Taxation Laws (Amendment) Act, 2021, invalidate notices issued under Section 148 for reopening assessments for AY 2012-13.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 9

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 8TH DAY OF SEPTEMBER, 2021

BEFORE

THE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV

WRIT PETITION NO.12016/2021 (T-IT) C/W WRIT PETITION NOS.12031/2021, 13522/2021, 13525/2021, 14014/2021, 14081/2021, 14086/2021 & 14094/2021

IN W.P.NO.12016/2021

BETWEEN:

DARSHAN PATHAK AGED ABOUT 42 YEARS 229, ACADEMY STREET, 304, JERSEY CITY NJ 07306 UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

INCOME TAX OFFICER INTERNATIONAL TAX WARD 2(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE

2 KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 31.03.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.12031/2021

BETWEEN:

SANJAY RAJA RAO AGED ABOUT 40 YEARS 278 MAIN STREET APARTMENT A1 LITTLE FERRY NJ 07643 UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG …PETITIONER

(BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

INCOME TAX OFFICER INTERNATIONAL TAX WARD 2(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE

3 KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 31.03.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.13522/2021

BETWEEN:

RAKESH PARDIWALA AGED ABOUT 47 YEARS NO.444, MADISON AVENUE, 310, NEW YORK 10022 UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG …PETITIONER

(BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

INCOME TAX OFFICER INTERNATIONAL TAX WARD 2(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095

4 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 31.03.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.13525/2021

BETWEEN:

TURNER PAUL AGED ABOUT 42 YEARS RESIDING IN UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

INCOME TAX OFFICER INTERNATIONAL TAX WARD 2(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 31.03.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.14014/2021

BETWEEN:

SARAT SETHI AGED ABOUT 47 YEARS 777, 3RD AVENUE 38TH FLOOR, NEW YORK NY 10017 UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG AGED ABOUT 42 YEARS …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

DEPUTY COMMISSIONER OF INCOME TAX ASMNT CIR 2(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 28.03.2019 BEING ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.14081/2021

BETWEEN:

MARK BREZETTE AGED ABOUT 45 YEARS 1413, SALADO DRIVE ALLEN TX UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG AGED ABOUT 42 YEARS. …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

INCOME TAX OFFICER INTERNATIONAL TAX WARD 1(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

7 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 30.09.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.14086/2021

BETWEEN:

RANT KISHINCHAND KIRPALANI TRUST C/O ANDREW KIRPALANI 1410 BROADWAY, 2ND FLOOR, NEW YORK, NY 10018 AGED ABOUT 42 YEARS UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

DEPUTY COMMISSIONER OF INCOME TAX ASMNT CIR 2(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

8 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE AND QUASH THE IMPUGNED NOTICE DATED 28.03.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

IN W.P.NO.14094/2021

BETWEEN:

ALAN BATES AGED ABOUT 46 YEARS 1, DELAWARE UNITED STATES OF AMERICA REPRESENTED BY HIS POWER OF ATTORNEY SHAREHOLDER REPRESENTATIVE SERVICES LLC BY ITS AUTHORISED SIGNATORY MR. CHRISTOPHER LETANG AGED ABOUT 42 YEARS …PETITIONER (BY SRI. PERCY PARDIWALA, SENIOR ADVOCATE FOR SRI. VIKRAM UNNI RAJA GOPAL, ADVOCATE)

AND:

INCOME TAX OFFICER INTERNATIONAL TAX WARD 1(1) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU - 560 095 ...RESPONDENT (BY SRI. K.V. ARVIND, ADVOCATE ALONG WITH SRI. M. DILIP, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO

9 SET ASIDE AND QUASH THE IMPUGNED NOTICE DATED 30.09.2019 ANNEXURE-A ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, BY THE RESPONDENT FOR A.Y. 2012-13 AND ETC.

THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R The petitioners have sought for quashing of the impugned Notice dated 31.03.2019 at Annexure- A issued under Section 148 of the Income Tax Act, 1961 by the respondent for the Assessment Year 2012-13 and have also sought for quashing of the impugned Order dated 10.12.2020 at Annexure- B.

2.

Learned counsel for the petitioners submit that the basis of initiation of proceedings under Section 147 of the Income Tax Act now no longer survives in light of the Taxation Laws (Amendment) Act, 2021 whereby amendments have been effected to Section 9 of the income Tax Act and in particular to explanation 5.

10 3. It is submitted that by virtue of the Amendment Act, it is clarified that nothing in explanation 5 shall apply to the proceedings inter alia Section 147. Accordingly, it is submitted that notice at Annexure- A is one without jurisdiction and consequently, proceedings pursuant thereto are required to be set aside.

4.

Upon notice, learned counsel for the respondents filed a memo which reads as here under;

"The petitioner in the above matter has challenged the reopening of assessment under Section 148 of the Act for the Assessment Year 2012.-13. During the course of hearing the assessee contended that in view of Amendment to Section 9 of the Act by Taxation Laws (Amendment) Act 2021 dated 30/08/2021, the transaction being prior to 28/5/2012, the reopening of assessment is not sustainable. The contention of the assessee has been examined and the said contention is correct.

Wherefore it is respectfully prayed that this Hon'ble Court may be pleased to pass

11 appropriate orders in the interest of justice and equity."

5.

In light of the same, notice at Annexure- A is set aside as one being without jurisdiction in light of the Taxation Laws (Amendment) Act, 2021 effecting amendment to Section 9 of the Income Tax Act and all the consequential proceedings pursuant to Annexure- A are set aside.

Accordingly, petitions are disposed of.

Sd/- JUDGE

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