M/S EDUCATIONAL RATING AND ASSESSMENT FOUNDATION V. THE ASSISTANT COMMISIONER OF INCOME TAX CIRCLE - 2(2)(1)

WP/30845/2024

AI Insights

The case involves M/s. Educational Rating and Assessment Foundation, represented by its director M.R. Jayaram, challenging a notice and subsequent order issued by the Income Tax authorities under the Income Tax Act, 1961. The petitioner contested the notice dated 16.08.2024, which demanded clarification on an input tax credit claim of Rs.1.76 crores for the financial years 2017-18 and 2018-19, citing that the claim was time-barred as of 31.03.2022. The petitioner argued that the notice lacked specific details and that their objections were not considered in the subsequent order. The court found merit in the petitioner's arguments, noting the lack of detailed particulars in the notice and the oversight of the objections, leading to the decision to remand the matter for fresh consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 671560 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 22-01-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI; M DILIP
• Assessee Lawyers: A SHANKAR
• Keywords: Assessment Year; Income Tax; Input tax credit; Notice Quash; Time barred; Writ petition
• Section: 148; 148A(b); 148A(d)

Judgement Text

" - 1 - NC: 2025:KHC:2650 WP No. 30845 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 30845 OF 2024 (T-IT) BETWEEN: M/S. EDUCATIONAL RATING AND ASSESSMENT FOUNDATION, A COMPANY REGISTERED UNDER THE COMPANIES ACT 2013, REPRESENTED BY ITS DIRECTOR, M.R. JAYARAM, S/O LATE SRI. M.S.RAMAIAH, AGED ABOUT 74 YEARS, NO.1/9, FLAT NO.6-B VI, FL LAVELLE MANSION, LAVELLE ROAD, RICHMOND TOWN, BENGALURU - 560 001. …PETITIONER (BY SRI. A.SHANKAR, SENIOR COUNSEL FOR SRI. MADHUSUDHAN U A., ADVOCATE) AND: 1. THE ASSISTANT COMMISIONER OF INCOME TAX CIRCLE - 2(2)(1), BENGALURU, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. Digitally signed by KAVYA R Location: High Court of Karnataka - 2 - NC: 2025:KHC:2650 WP No. 30845 of 2024 2. THE CHIEF COMMISSIONER OF INCOME TAX-1, BENGALURU, CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU - 560 001. …RESPONDENTS (BY SRI.E.I.SANMATHI, ADVOCATE AND SRI.M.DILIP, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER SECTION 148A(b) OF THE ACT DATED 16.08.2024 OF THE ACT FOR THE ASSESSMENT YEAR 2018-19 BY THE R-1 BEARING DIN AND NOTICE NO. ITBA/AST/F/148A(SCN)/2024-25/1067678670(1) HEREIN MARKED AS ANNEXURE - A1 AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT ORAL ORDER Though the matter is listed for preliminary hearing on the consent of the learned counsel for the parties, the petition is taken up for disposal. 2. Heard Sri. A. Shankar, learned Senior counsel for learned counsel Sri. Madhusudhan. U.A., for the petitioner and Sri.M.Dilip learned counsel for the respondents. Perused the writ petition papers. - 3 - NC: 2025:KHC:2650 WP No. 30845 of 2024 3. Learned Senior Counsel Sri. A. Shankar would submit that the petitioner is before this Court under Article 226 of the Constitution of India questioning the Annexure- A1-Notice issued under Section 148A(b) of the Income Tax Act, 1961(for short, 'the 1961 Act') as well as the order passed under Section 148A(d) dated 28.08.2024 as well as the notice issued under Section 148 of the Act, 1961 dated 28.08.2024. Learned counsel invites attention of this Court to Annexure-A1-Notice issued under Clause (b) of Section 148A of the 1961 Act and submits that the notice is dated 16.08.2024, for the assessment year 2018-19. Further, it is submitted that notice calls upon the petitioner to show cause on the details contained in the notice as to why Section 148 notice should not be issued. Further, it is submitted that the information on which the notice issued indicates that information requires immediate action by the competent authority since the matter is getting time barred on 31.03.2022. But, he - 4 - NC: 2025:KHC:2650 WP No. 30845 of 2024 submits that if the matter gets time barred on 31.03.2022, notice itself is issued on 16.08.2024. Further, learned senior counsel would submit that the notice would not give full particulars and it would only state with regard to input tax credit availed by the petitioner in a sum of Rs.1.76 Crores for the financial years 2017-18 and 2018-19. It is submitted that the petitioner had filed objection to the notice at Annexure-A1 on 22.08.2024 and respondent No.1 while passing Annexure-A2-Order failed to take note of the objection. Hence, the learned Senior Counsel would pray for remanding the matter to reconsider the entire issue from the stage of Section 148-A(b)-Notice. 4. Per contra, learned counsel Sri. M. Dilip for the respondents is not in a position to say as to whether the objections at Annexure-C dated 22.08.2024 is considered when passing the order under Section 148-A(d) of the 1961 Act. Therefore, as the objection appears to have not - 5 - NC: 2025:KHC:2650 WP No. 30845 of 2024 been considered, he submits that the matter be remanded for fresh consideration to respondent No.1. 5. Having heard the learned Senior counsel for the petitioner as well as learned counsel for the respondents and on perusal of the entire writ petition papers, I am of the view that the matter needs reconsideration at the hands of respondent No.1 from the stage of notice under Section 148-A(b) of the 1961 Act. Annexure-A1-Notice indicates that the input tax claim to which the petitioner was not entitled relates to financial year 2017-18 and 2018-19 and the total amount claimed according to the notice is Rs.1.76 crores. But, it would not indicate as to what is the input tax credit claimed to which the petitioner was not entitled for each financial year. It also indicates that the claim would get time barred by 31.03.2022 but the notice is dated 16.08.2024. Moreover, the petitioner has filed detailed objection to notice at Annexure-A1 under Annexure-C dated 22.08.2024 and the said objection is - 6 - NC: 2025:KHC:2650 WP No. 30845 of 2024 not considered by respondent No.1 while passing Annexure-B-Order. 6. In light of the above, the matter is remanded back to respondent No.1 for reconsideration with regard to the limitation raised by the petitioner as well as other details set out in the objection filed under Annexure-C. 7. The petitioner is also at liberty to file further reply, if any. Hence, the following order: ORDER i. Writ petition is allowed-in-part. ii. The order dated 28.08.2024 bearing No. ITBA/AST/F/148A/2024-25/1068075927(1) at Annexure- A2 under Section 148-A(d) of the 1961 Act as well as the notice bearing No.ITABA/AST/S/148_1/2024- 25/1068076490(1) issued under Section 148 of the 1961 Act at Annexure-A3 are quashed. - 7 - NC: 2025:KHC:2650 WP No. 30845 of 2024 iii. The matter is remanded back to respondent No.1 to consider the reply of the petitioner and proceed from the stage of Annexure-A1/Notice under Section 148A(b) of the 1961 Act. All contentions of the parties are left open. Sd/- (S.G.PANDIT) JUDGE RKA List No.: 1 Sl No.: 25 "