Dastagir Shariff V. Income Tax Officer Ward -1

WP/19821/2022

AI Insights

The case involves Dastagir Shariff, the petitioner, who challenged notices and an order issued by the Income Tax Officer under Sections 148A(b), 148A(d), and 148 of the Income Tax Act for the assessment year 2016-17. The petitioner argued that the proceedings were barred by limitation as the escaped assessment was less than Rs. 50 Lakhs, citing a relevant amendment to Section 149(1)(b) effective from April 1, 2021. The respondent defended the actions based on instructions from the Central Board of Direct Taxes and a Supreme Court judgment. The High Court found that the respondent had not adequately considered the petitioner's arguments or the cited Supreme Court judgment, leading to the decision to set aside the notices and order and remit the matter for fresh consideration.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 683307 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-03-2024
• Assessment Year: misc
• Other Referred Cases: Fareeda Sulthana Vs The Income Tax Officer, Union of India Vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: JINITA CHATTERJEE; RAJEEV NULVI
• Keywords: Escaped assessment; Limitation; Reassessment; Writ of Certiorari; Writ of prohibition
• Section: 148; 148A(b); 148A(d); 149(1)(b); 226; 227

Judgement Text

" - 1 - NC: 2024:KHC:11866 WP No. 19821 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 19821 OF 2022 (T-IT) BETWEEN: DASTAGIR SHARIFF AGED ABOUT 51 YEARS SON OF MUZAMMIL SHARIFF SAB NO.14 12TH CROSS, VIVEKNAGAR POST EJIPURA MAIN ROAD ,EJIPURA BANGALORE-560 047. …PETITIONER (BY SMT. JINITA CHATTERJEE., AND SRI. RAJEEV CHANNAPPA NULVI .,ADVOCATES) AND: INCOME TAX OFFICER WARD -1 INCOME TAX DEPARTMENT NEW EXTENSION KOLAR KOLAR-563 101. …RESPONDENT (BY SRI.E.I. SANMATHI.,ADVOCATE) THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE NOTICE ISSUED UNDER SECTION 148A(B) OF THE ACT DATED 24.05.22 BY THE RESPONDENT FOR ITBA/COM/F/17/2022-23/1043140553(1) FOR AY - 2016 - 17 (ANNEXURE - D). THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:11866 WP No. 19821 of 2022 ORDER In this petition, petitioner seeks the following reliefs: “ (a) Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the notice under Section 148A(b) of the Act dated: 24.05.2022 by Respondent in ITBA/COM/F/17/2022-23/1043140553(1) for AY 2016-17 (Annexure-‘D’); (b) Issue a Writ of Certiorari or a direction in the nature of writ of certiorari quashing the order of the Respondent u/s 148A(d) of the Act dated: 29.07.2022 for the assessment year 2016-17 in the ITBA/COM/F/17/2022-23/1044312800(1) (Annexure-‘F’); (c) Issue a writ of certiorari or a direction in the nature of writ of certiorari, quashing the notice issued under Section 148 of the Act dated: 29.07.2022 by the for AY 2016-17 in ITBA/COM/F/17/2022-23/1044312800(1) (Annexure-G); (d) Issue a writ of prohibition or a direction in the nature of Writ of prohibition restraining the Respondent from proceeding to conclude the reassessment of the Act for the disputed assessment year in pursuance of the Act for the disputed assessment year in pursuance of the order issued under Section 148A(d) of the Act dated: 29.07.2022 in the ITBA/COM/F/17/2022-23/1044312800(1) (Annexure-‘F’); (e) Issue a writ of prohibition or a direction in the nature of writ of prohibition, restraining further proceedings in - 3 - NC: 2024:KHC:11866 WP No. 19821 of 2022 consequence of issuance of notice section 148 of the Act dated: 29.07.2022 for AY 2016-17 ITBA/COM/F/17/2022- 23/1044312800(1) by the Respondent (Annexure-‘G’) (f) Pass such other order, direction or writ as this Hon’ble Court deems fit, and (g) direct the Respondent to pay the costs of this Writ Petition as this Hon’ble court deems fit.” 2. Heard learned counsel for the petitioner and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record. Learned counsel for the petitioner submits that the impugned proceedings pursuant to the Notice dated 30.06.2021 is illegal, arbitrary and without jurisdictional authority of law and barred by limitation since the escaped assessment is less than Rs.50 Lakhs as contemplated under Section 149(1)(b) of the Income Tax Act, 1961 (after amendment with effect from 01.04.2021). It is also submitted that this Court in the case of Fareeda Sulthana Vs The Income Tax Officer, WP.No.5647/2023 dated 09.08.2023 has come to the conclusion that proceedings in relation to escaped Assessment less than Rs.50 Lakhs beyond a period of 3 years from the date of - 4 - NC: 2024:KHC:11866 WP No. 19821 of 2022 relevant Assessment Year is barred by limitation and the proceedings deserves to be quashed. 4. It is pointed out that in the instant case, AY 2016-17 would expire on 31.03.2017 and the impugned proceedings initiated pursuant to Notice dated 30.06.2021 are hopelessly barred by limitation in the light of Section 149(1)(b) of the IT Act, and the judgment of Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agarwal – (2022) SCC Online SC 543. It is therefore submitted that the impugned order passed by the respondent without taken into consideration these aspects, deserves to be set aside. 5. Per contra, learned counsel for the respondent submits that in the light of the instruction No.1/2022 dated 11.05.2022 issued by the Central Board of Direct Taxes clarifying amendments to Section 147 to 149 (w.e.f. 01.04.2021) and the judgment of the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agarwal – (2022) SCC Online SC 543, the impugned order does not warrant interference by this Court in the present petition. It is also submitted that the aforesaid instruction No.1/2022 is a subject matter of proceedings in SLP.No.6706/2023, Union of India Vs - 5 - NC: 2024:KHC:11866 WP No. 19821 of 2022 Rajeev Bansal which is pending before the Apex Court. It is therefore submitted that there is no merit in the present petition and the same is liable to be dismissed. 6. A perusal of the impugned order will indicate that the respondent has placed reliance upon the aforesaid instruction No.1/2022 in order to reject the claim of the petitioner. Further the judgment of this Court in the case of Fareeda Sulthana has not been referred to by the respondent in the impugned order. Under these circumstances, in order to provide one more opportunity to both parties to put forth their respective claims, I deem it just and appropriate to set aside the impugned order and remit the matter back to the respondent for reconsideration afresh in accordance with law. 7. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) Impugned Notices at Annexures – F & G, are hereby set aside. - 6 - NC: 2024:KHC:11866 WP No. 19821 of 2022 (iii) Matter remitted back to respondent for reconsideration afresh in accordance with law after disposal of SLP.No.6706/2023 Union of India Vs Rajeev Bansal which is currently pending before the Apex Court. (iv) After disposal of SLP No.6706/2023, respondent shall reconsider the claim of the petitioner and pass appropriate orders bearing in mind the judgment of the Apex Court in Ashish Agarwal and this Court in Fareeda Sulthana’s case and the amended provisions of Section 147 to 149 of IT Act. (v) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. Sd/- JUDGE DHA List No.: 1 Sl No.: 7.1 "