What did the High Court hold?

The High Court treated the impugned communication as a notice and directed the petitioners to furnish their explanation. The Income Tax Officer was instructed to pass an order after considering the petitioners' reply.

The petitioners challenged a communication from the Income Tax Officer regarding capital gains tax computation on property sale. The communication was issued without providing the petitioners an opportunity to be heard.

What were the issues?

Whether the impugned communication was issued without adhering to principles of natural justice. Whether the petitioners were denied an opportunity to be heard before the tax liability was determined.

Dr Ashok Kumar Jain vs Office of the Income Tax Officer | Karnataka High Court 2019

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 23RD DAY OF SEPTEMBER, 2019 BEFORE THE HON'BLE MR.JUSTICE P. B. BAJANTHRI WRIT PETITION Nos.51692-51693/2017 (T-IT) Between: 1. Dr. Ashok Kumar Jain S/o Chatarmal Jain Aged 48 years Residing at F-201, Adarsh Residency 47th Cross, Jayanagar 8th Block Bengaluru-560082.

Smt. Neelima Jain W/o Dr. Ashok Kumar Jain Aged 47 years Residing at F-201, Adarsh Residency 47th Cross, Jayanagar 8th Block Bengaluru-560082.

Represented by Power of Attorney Holder Dr.Ashok Kumar Jain. .. Petitioners

(By Sri A.V.Nishanth, Advocate)

And Office of the Income Tax Officer International Taxation Ward 1(1), 4th Floor, BMTC Building 80 Feet Road, Koramangala Bengaluru-560047 Rep. by Income Tax Officer.

... Respondent

(By Sri Jeevan J.Neeralgi, Advocate)

2 These writ petitions are filed under Article 226 read with Article 227 of the Constitution of India, praying to set aside the order dated 22.09.2016 vide Annexure-E in so far as payment of Rs.8,01,480/- as Income Tax on capital gain is considered issued by respondent and etc.,

These writ petitions coming on for ‘Orders’ this day, the Court made the following:-

ORDER

The petitioners have assailed Annexure-E communication dated 22.09.2016. The said communication is relating to Capital Gain Tax computation chart on sale of property No.1801 and 1802, A-4, Elita Promende, J.P.Nagar, 7th Phase, Bengaluru-78.

Further, the proceedings relating to deduction of TDS of Rs.20,00,000/- on above mentioned transaction was not paid to the Income Tax. Consequently, the notice has been issued. It is to be noticed that before determining the amount mentioned in Annexure-E dated 22.09.2016, the petitioners have not been heard. Therefore, Annexure-E dated 22.09.2016 communication is treated as notice to the petitioners.

The petitioners are hereby directed to furnish their explanation-reply within a period of four weeks from the date of receipt of a copy of this order.

On receipt of petitioners explanation to notice, the concerned Income Tax Officer is hereby directed to proceed to pass an appropriate order after due consideration of petitioners’ explanation to Annexure-E.

The above direction shall be complied within a period of three months from the date of receipt of a copy of this order.

With the above observations, the writ petitions stand disposed of.

Sd/- JUDGE

ssb

DR ASHOK KUMAR JAIN vs. OFFICE OF THE INCOME TAX OFFICER

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