Bacharaniananda Chittiappa Prakash V. National Faceless Assessment Centre and Income Tax Officer, ITO Ward Madikeri

WP/9169/2023

AI Insights

In this writ petition, Bacharaniananda Chittiappa Prakash challenged the assessment order and related documents issued by the National Faceless Assessment Centre and the Income Tax Officer, ITO Ward Madikeri, under various sections of the Income Tax Act, 1961. The petitioner argued that the show-cause notice was cryptic, lacked necessary details, and provided an insufficient timeframe for response, which violated the principles of natural justice. The court agreed with the petitioner's contention, noting the lack of specific details regarding the bank accounts in question and the inadequacy of the time given to respond. Consequently, the court set aside all related orders and remanded the case for further proceedings, emphasizing the need for a detailed and fair opportunity for the petitioner to respond.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798520 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 19-07-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: ANNAMALAI
• Keywords: Assessment Order; Natural Justice; Show cause notice; Unexplained Cash Deposits
• Section: 147; 148; 144; 144B; 226; 226(3); 227

Judgement Text

" - 1 - NC: 2023:KHC:25301 WP No. 9169 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF JULY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO.9169 OF 2023 (T-IT) BETWEEN: BACHARANIANDA CHITTIAPPA PRAKASH, S/O. SRI. CHITTIAPPA B.K., AGED ABOUT 67 YEARS, POST BOX NO.5, NALKERI VILLAGE, KOTHUR POST, VIRAJPET, KODAGU - 571 216, KARNATAKA. …PETITIONER (BY SRI. ANNAMALAI.S., ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE, REP. BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME-TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI - 110 003. 2. THE INCOME TAX OFFICER, ITO WARD MADIKERI, MADIKERI-SRIVALLI BUILDING, MADIKERI, KARNATAKA - 571 201. …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER PASSED UNDER SECTION 147 R.W.S. 144 R.W.S. 144B OF THE ACT DATED 27.03.2022 BEARING DIN NO. Digitally signed by SUCHITRA M J Location: High Court of Karnataka - 2 - NC: 2023:KHC:25301 WP No. 9169 of 2023 ITBA/AST/S/147/2021-22/1041758296(1) FOR THE AY. 2014-15 BY THE R1 HEREIN MARKED AS ANNEXURE-A1 AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has sought for setting aside of the assessment order under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961 (for short 'the Act') at Annexure-A1; setting aside of the computation sheet at Annexure-A2 and notice of demand at Annexure-A3; penalty notice at Annexure-A4; penalty order at Annexure-A5 and computation sheet at Annexure-A6; notice of demand at Annexure-A7; notice under Section 148 of the Act at Annexure-B and notice under Section 226(3) of the Act at Annexure-C. 2. Sri. Annamalai.S., learned counsel for the petitioner would submit that the show-cause notice at Annexure-F dated 25.03.2022 was generated at 15:32 hours which provided for response to be made by 26.03.2022, which was wholly insufficient and the details mentioned at Para-5 of the show- cause notice regarding escapement of income amounting to Rs.81,22,25,541/- is without any further clarification. It is - 3 - NC: 2023:KHC:25301 WP No. 9169 of 2023 submitted that the basis for the observation at Para-5 of the show-cause notice is that there were unexplained cash deposits. It is pointed out that the Authority has observed that the source of cash deposits/interest as detailed at Para-2 of the show-cause notice was not explained. It is submitted that, despite no details of the Bank Account of the petitioner having been provided, the show-cause notice is even otherwise cryptic and bereft of details which prevented the petitioner from making out any intelligible reply. 3. Having perused the show-cause notice at Annexure-F, there is merit in the contention regarding violation of principles of natural justice insofar as the notice was dated 25.03.2022 with direction that response to be made on or before 23:59 hours of 26.03.2022 which is wholly insufficient time afforded for any response. Even otherwise, there is ambiguity in the show-cause notice as the details of the Account, in which the deposits were made is not forthcoming from the show-cause notice. Accordingly, the proceedings post issue of show-cause notice are required to be set aside; the matter is relegated to the stage of issuance of show-cause notice at Annexure-F. The petitioner is at liberty to seek for - 4 - NC: 2023:KHC:25301 WP No. 9169 of 2023 clarification regarding Account numbers in which according to the Authority there were unexplained cash deposits. Upon clarification being made, the petitioner is at liberty to file his response to the show-cause notice at Annexure-F within a period of 30 days from the date of response being issued regarding the Bank Accounts, in which the deposits are stated to have been found. Accordingly, the orders at Annexures-A1 to A7, Annexures-B and C are set aside. In view of the above, petition is disposed off. All factual and legal contentions are kept open. Sd/- JUDGE SMJ List No.: 1 Sl No.: 22 "