BASAVARAJU MALLESHAGOWDA V. INCOME TAX OFFICER

WP/20259/2024

AI Insights

The case involves Basavaraju Malleshagowda, the petitioner, who challenged several notices and orders issued by the Income Tax Officer and the Principal Commissioner of Income Tax for the assessment year 2018-19. The petitioner contended that he did not receive the initial notice under Section 148A(b) due to unavoidable reasons and that the financial transactions attributed to him were actually conducted on behalf of his employer, Canara Bank. The court found that the petitioner was not given a fair opportunity to respond to the notices and thus set aside all the impugned notices and orders, remitting the case back for fresh consideration.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 751058 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 18-09-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: THIRUMALESH
• Assessee Lawyers: RAVISHANKAR
• Keywords: Cash deposits; Financial transactions; Financial transactions; Income Tax; Notice Quashing; Re-assessment proceedings; Writ of Certiorari
• Section: 147; 148; 144; 274; 270A; 148A(b); 148A(d); 272A(1)(d)

Judgement Text

" - 1 - NC: 2024:KHC:38192 WP No. 20259 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 20259 OF 2024 (T-IT) BETWEEN: BASAVARAJU MALLESHAGOWDA AGED 36 YEARS, S/O MALLESHAGOWDA, NO 38, KUPPE KUPPEKOLAGATTA BILIKERE H BOLABAHALLI P HUNSUR MYSORE - 571 103 …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE) AND: 1. INCOME TAX OFFICER WARD - 1 (1) MYSORE - 570 010 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 3 THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX - 3, BMTC BUILDING, KORAMANGALA BANGALORE - 560 095 …RESPONDENTS (BY SRI. THIRUMALESH M., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO 1) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE UNDER SECTION 148A(B) OF THE ACT, DATED 27/03/2022 BEARING DIN NO.ITBA/AST/F/148A(SCN)/2021-22/1041767467(1), ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN Digitally signed by REKHA R Location: High Court of Karnataka - 2 - NC: 2024:KHC:38192 WP No. 20259 of 2024 MARKED AS ANNEXURE - A. II) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER UNDER SECTION 148A(D) OF THE ACT, DATED 30/04/2022, BEARING DIN NO.ITBA/AST/F/148A/2022- 23/1042917761(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE - A1 AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner seeks the following reliefs: “(i) Issue a writ of certiorari, or direction in the nature of a writ of certiorari quashing the notice under Section 148A(b) of the Act, dated 27/03/2022 bearing DIN No.ITBA/AST/F/148A(SCN)/2021-22/1041767467(1), issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A. (ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order under Section 148A(d) of the Act, dated 30/04/2022, bearing DIN No.ITBA/AST/F/148A/2022-23/1042917761(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A1. (iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148 of the Act dated 30/04/2022 bearing DIN No.ITBA/AST/S/148_1/2022-23/1042917771(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A2. - 3 - NC: 2024:KHC:38192 WP No. 20259 of 2024 (iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order passed under Section 147 r.w.s 144 dated 24/03/2024 bearing DIN No.ITBA/AST/S/147/2023-24/1063309431(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A3. (v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice under Section 274 r.w.s 270A of the Act dated 24/03/2024 bearing DIN No.ITBA/PNL/S/270A/2023-24/1063309504(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A4. (vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice under Section 274 r.w.s 272A(1)(d) of the Act dated 31/03/2024 bearing DIN No.ITBA/PNL/S/272A(1)(d)/2023-24/1063764414(1) issued by the Respondent No.1 for the assessment year 2018-19 herein marked as Annexure - A5. (vii) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.” 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that the respondent No.1 is stated to have issued notice under Section 148A(b) of the Income Tax Act to the petitioner on 27.03.2022, - 4 - NC: 2024:KHC:38192 WP No. 20259 of 2024 proposing to initiate re-assessment proceedings against the petitioner. In this context a perusal of the aforesaid notice would indicate that notice is said/purported to have been addressed to the petitioner as well as to email ID of Canara Bank, Brindavan Extension Branch, Mysore-570020. It is also pertinent to note that along with the said notice stated to have been addressed to the petitioner, email is also sent to the general email ID of the aforesaid Bank where the petitioner was working as Business Correspondent and amounts relating to transactions of the employer/bank was being processed through the personal account of the petitioner. 4. It is the specific contention of the petitioner that he did not receive the aforesaid notice under Section 148A(b) of the Act and his inability to submit reply along with documents of the same is due to bonafide/inevitable reasons and sufficient cause. It is also pointed out that the amount of Rs.92,97,050/- said to be the financial transaction by way of cash deposits in the account of the petitioner was actually not the amount deposited in the account of the petitioner in his individual capacity, but on behalf of the employer, i.e., Canara Bank referred to supra. It is submitted that since the petitioner did not submit his reply, the respondent No.1 - 5 - NC: 2024:KHC:38192 WP No. 20259 of 2024 has proceeded to pass the impugned order dated 30.04.2022 followed by notice dated 30.04.2022 and assessment order dated 24.03.2024 followed by penalty notice dated 24.03.2024 and penalty notice dated 31.03.2024, all of which are assailed in the present petition. 5. Per contra, learned counsel for respondent submit that there is no merit in the petition and the same is liable to be dismissed. 6. A perusal of the material on record including the impugned order indicate the fact that the petitioner has not submitted his reply to the notice dated 27.03.2022 and consequently, in order to provide one more opportunity to the petitioner, I deem it appropriate to set aside the impugned order as well as consequent notices/orders etc., and the matter has to be remitted back to respondent No.1 for reconsideration afresh in accordance with law and to provide opportunity to the petitioner to submit reply under Section 148A(b) and further directions to be issued in this regard. - 6 - NC: 2024:KHC:38192 WP No. 20259 of 2024 7. In the result, pass the following: ORDER (i) The petition is hereby allowed. (ii) Impugned notices / orders at Annexures A, A1, A2, A3, A4 and A5 are hereby set aside. (iii) Matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law from the stage of submitting of reply to the notices under Section 148A(b) of the IT Act at Annexures – A dated 27.03.2022. (iv) Respondent No.1 shall secure necessary information from the aforesaid Canara Bank bearing in mind Annexure - B dated 31.05.2024 in relation to the subject transaction and provide sufficient and reasonable opportunity to the petitioner and provide personal hearing and proceed further in accordance with law. (v) Liberty is reserved in favour of the petitioner to submit replies, responses, pleadings, documents, etc., to respondent No.1, who shall consider the same, provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law. - 7 - NC: 2024:KHC:38192 WP No. 20259 of 2024 In view of disposal of writ petition, pending applications does not survive for consideration and the same are also disposed of. Sd/- (S.R.KRISHNA KUMAR) JUDGE RR List No.: 1 Sl No.: 42 "