GULSHAN KUMAR RAWAL V. ASSISTANT COMMISSIONER OF INCOME TAX

WP/12821/2023

AI Insights

The case involves Gulshan Kumar Rawal, the petitioner, who challenged the orders and notices issued by the Income Tax Department under various sections of the Income Tax Act, 1961, for the assessment year 2018-19. The petitioner argued that he was not given a reasonable opportunity to respond at various stages of the assessment process, particularly due to not receiving notices which were sent to his accountant's email, and his subsequent health issues which prevented him from responding in time. The respondents did not seriously contest the lack of opportunity provided to the petitioner. The court found that the proceedings were concluded without giving the petitioner a reasonable opportunity as required under the law, leading to the quashing of the orders and notices issued.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 766574 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-09-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: BALRAM RAO
• Keywords: Assessment Order; Income Tax; Medical Grounds; Notice; Opportunity to be heard
• Section: 147; 148; 144; 148A(d); 153(2); 142

Judgement Text

" - 1 - NC: 2023:KHC:34735 WP No. 12821 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF SEPTEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 12821 OF 2023 (T-IT) BETWEEN: 1. GULSHAN KUMAR RAWAL AGED ABOUT 65 YEARS, SON OF LATE WAZIR CHAND RAWAL, PREVIOUSLY RESIDING AT NO. 16, 100 FEET RING ROAD, MUNESHWARA FARM, BEHIND KALYANI MOTORS, PANTHARAPALYA, BANGALORE-560 039. PRESENTLY RESIDING AT SGS RESIDENCY NO. 170, 2ND FLOOR, 1ST CROSS, BCC LAYOUT, NEAR APPU GYM, CHANDRA LAYOUT, BANGALORE-560 040, PAN AHKPR5565J …PETITIONER (BY SRI. BALRAM R RAO.,ADVOCATE) AND: 1. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3(1)(1), BANGALORE, BMTC BUILDING, Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:34735 WP No. 12821 of 2023 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMESH VILLAGE, KORAMANGALA, BENGALURU-560 095. 2. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, INCOME TAX DEPARTMENT, DELHI, II FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. …RESPONDENTS (BY SRI. M.DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE THE IMPUGNED ORDER PASSED UNDER CLAUSE (D) OF SECTION 148A OF THE ACT DATED 29/03/2022 IN DIN AND NOTICE NO ITBA/AST/F/148A/2021-22/1041926866(1) (ANNEXURE-B) AS WELL AS NOTICE ISSUED UNDER SECTION 148 OF THE ACT IN DIN AND NOTICE NO ITBA/AST/S/148_1/2021-22/1041943158(1) (ANNEXURE-C) PASSED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2018-19 AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING B GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - NC: 2023:KHC:34735 WP No. 12821 of 2023 ORDER The petitioner is aggrieved by the order dated 29.03.2022 under Section 148A(d) of the Income Tax Act, 1961 [for short, ‘the IT Act], the notice dated 29.03.2022 under Section 148 of the IT Act [Annexures-B and C], the Assessment Order dated 30.03.2023 [Annexure-K] under Section 147 read with Section 144 of the IT Act and the consequential notice for tax demand as also interest and penalty [Annexures-L]. The petitioner’s grievance is with the lack of opportunity both at the stage of adjudication under Section 148A(d) of the IT Act and at the time of framing of assessment under Section 147 read with Section 148 of the IT Act. Sri. Balram R. Rao, the learned counsel for the petitioner, and Sri. M. Dilip, the learned standing counsel for the respondents, are heard for disposal of the petition in the light of the petitioner’s grievance. - 4 - NC: 2023:KHC:34735 WP No. 12821 of 2023 2. The petitioner’s case is that the petitioner had furnished his accountant’s E-mail when he obtained the PAN, and though the respondents contend that notices under Section 148A(b), 148 and 142 of the IT Act are sent to the Accountant’s Email ID, he did not know about the same because his accountant, who has not been in his employment, did not inform him; and he came to know about the impugned order under Section148A(d) and notice dated 15.03.2023 under Section 142 of the IT Act, when the portal was accessed to file advance tax. He has immediately sent a request for adjournment on 15.03.2023 because he, who is aged 70 years, is suffering from ill-health, but the assessment is framed on 30.03.2023 proceedings. 3. The reasons offered by the petitioner to substantiate the case that he did not have opportunity at the relevant stages, is not seriously contested by the respondents. In fact, Sri. M.Dilip, - 5 - NC: 2023:KHC:34735 WP No. 12821 of 2023 their learned standing counsel, submits that because medical grounds are urged, this Court may interfere to the limited extent of quashing the Assessment Order under Section 147 read with Section 144 of the IT Act with opportunity to the petitioner to file response to the notice under Section 148 of the IT Act. 4. The petitioner is issued notice under Section 148A(b) of the IT Act [Annexure-A] putting him on notice that notwithstanding certain cash transactions as mentioned in such notice, he has not filed returns for the assessment year 2018-19, and the adjudication under Section 148A(d) of the IT Act is concluded in the premise that the petitioner has not filed any response to the notice under Section 148A(b) of the IT Act. Thereafter, notices are issued under Section 142(1) of the IT Act calling for information regarding: - 6 - NC: 2023:KHC:34735 WP No. 12821 of 2023 (a) Source of huge cash deposits, (b) Nature of business, and (c) Explanation for not filing the returns for the assessment year 2018-19. After issuance of multiple notices under section 142 of the IT Act, including the notice dated 15.03.2023 [Annexure-G1], on the proposed variation, the assessment is completed on 30.03.2023 [Annexure- K]. 5. The petitioner, upon receipt of the last of the notice dated 15.03.2023, has made a request for adjournment citing medical reasons and enclosing a medical certificate. There is response to such request stating that it would not be possible to allow adjournment beyond 31.03.2023 because the proceedings otherwise would be time barred. This response must necessarily be in the light of the provisions of Section 153(2) of the IT Act. The second respondent, in the Assessment Order, has observed - 7 - NC: 2023:KHC:34735 WP No. 12821 of 2023 that the petitioner has not submitted any cogent or possible explanation for the deposits made. 6. It is obvious from the above that both the proceedings under Section 148A(d) of the IT Act and under Section 147 read with Section 144 of the IT Act are concluded without the petitioner having a reasonable opportunity as contemplated under Section 148A and 142 of the IT Act. The petitioner has offered bonafide explanation on service of notice under Section 148A(b) of the IT Act and to seek adjournment after the notice dated 15.03.2023 when the Departmental portal is accessed for payment of advance tax on 15.03.2023. When queried, the learned counsel for the petitioner submits that the petitioner cannot dispute that the notice under Section 148A(d) of the IT Act for the purposes of Section 148 of the IT Act is issued within the time permissible under the provisions therefor, and if this Court were to interfere, there could be suitable - 8 - NC: 2023:KHC:34735 WP No. 12821 of 2023 extension of limitation for the completion of the assessment, if necessary after the adjudication order 148A(d) of the IT Act. In the light of the above, the following: ORDER a) The petition is allowed in part, and the impugned order dated 29.03.2022 [Annexure-B] under Section 148A(d) of the IT Act, the notice dated 29.03.2022 [Annexure- C] under Section 148 of the IT Act and the Assessment order dated 30.03.2023 [Annexure-K] under Section 147 read with Section 144 of the IT Act are quashed while also quashing the consequential notice for demand/interest dated 30.03.2023 [Annexure-L]. b) The petitioner shall be at liberty to file response consequent to the notice dated 15.03.2022 under Section 148A(b) of the IT - 9 - NC: 2023:KHC:34735 WP No. 12821 of 2023 Act on or before 30.10.2023, and the respondents shall be at liberty to complete the adjudication, and if necessary, the assessment proceedings thereafter on or before 30.03.2024. Sd/- JUDGE RB "