Maruthi Education Society Murnad and Sri Appachu V. Income Tax Officer Ward (1) Madikeri and National Faceless Assessment Centre and Principal Chief Commissioner of Income Tax - 3

WP/12743/2024

AI Insights

The case involves Maruthi Education Society Murnad, an educational institution, which challenged several notices and orders issued by the Income Tax Department under various sections of the Income Tax Act, 1961. The petitioner argued that their income, being less than one crore rupees, is exempt from tax if claimed under Section 10(23C)(iiiad) of the Act. Due to unforeseen circumstances, the petitioner did not respond to the initial notice under Section 148A(b), leading to subsequent orders and penalties. The court, considering the petitioner's contention about the tax exemption, decided to set aside all the notices and orders and remand the matter for a fresh assessment after allowing the petitioner to respond to the initial notice.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796955 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-06-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH
• Assessee Lawyers: RAVISHANKAR
• Keywords: Educational institution; Exemption; Income Tax; Notice; Penalty
• Section: 147; 148; 144; 271B; 270A; 144B; 10(23C)(iiiad); 271AAC(1); 148A(b); 148A(d); 272A(1)(d); 226; 227

Judgement Text

" - 1 - NC: 2024:KHC:23901 WP No. 12743 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12743 OF 2024 (T-IT) BETWEEN: 1. MARUTHI EDUCATION SOCIETY MURNAD MURNAD, MADIKERI KODAGU-571 252 PAN: AAEAM395F ALSO AT: SRI APPACHU AGED 62 YEARS, S/O MUDDAPPA B G MUTHARMUDI, MURNAD KODAGU-571 252 … PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. INCOME TAX OFFICER WARD (1) MADIKERI KODAGU-571 201 2. NATIONAL FACELESS ASSESSMENT CENTRE ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE ROOM NO.401, 2ND FLOOR, Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:23901 WP No. 12743 of 2024 E RAMP, JAWAHARLAL NEHRU STADIUM DELHI-110 003 3. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX - 3 THE OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX - 3 BMTC BUILDING, KORAMANGALA BANGALORE-560 095 … RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO i) DIRECT, QUASH THE NOTICE UNDER SECTION 148A(b) OF THE ACT, DTD 14/03/2022 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2021- 22/1040717113(1), ISSUED BY THE R-1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has challenged the notice issued under Section 148A(b) of the Income Tax Act, 1961 ('the Act' for brevity) at Annexure-'A' dated 14.03.2022 as well as the order passed under Section 148A(d) at Annexure-'A1' dated 26.03.2022, the notice issued under Section 148 at Annexure-'A2' dated 27.03.2022, the order passed under Section 147 read with Sections 144, 144B at - 3 - NC: 2024:KHC:23901 WP No. 12743 of 2024 Annexure-'A3' dated 28.03.2023, the order of penalty passed under Section 272A(1)(d) at Annexure-'A4' dated 21.08.2023, the order of penalty passed under Section 270A at Annexure-'A5' dated 19.09.2023, the order of penalty passed under Section 271AAC(1) at Annexure-'A6' dated 19.09.2023 and the order of penalty passed under Section 271B at Annexure-'A7' dated 19.09.2023. 2. It is the case of the petitioner that the petitioner is an Educational Institution and if the income during the relevant period of time is less than one crore rupees, such income would be exempt, if so claimed by filing the returns in terms of Section 10(23C)(iiiad) of the Act. It is submitted that due to bona fide reasons, no reply was made out to the notice issued under Section 148A(b) of the Act. Therefore, it is submitted that, if an opportunity is granted to the petitioner, it would demonstrate that the income that it received is exempt from tax and such exemption could be claimed by filing - 4 - NC: 2024:KHC:23901 WP No. 12743 of 2024 the returns in response to the notice issued under Section 148 of the Act. 3. Taking note of the contention regarding the exemption made, it would meet the ends of justice by remitting the matter to the stage of reply to the notice under Section 148A(b) of the Act. 4. Accordingly, the notice at Annexure-'A' dated 14.03.2022, the order at Annexure-'A1' dated 26.03.2022, the notice at Annexure-'A2' dated 27.03.2022, the order at Annexure-'A3' dated 28.03.2023, the order of penalty at Annexure-'A4' dated 21.08.2023, the orders of penalty at Annexures-'A5', 'A6' and 'A7', all dated 19.09.2023, are set aside. All contentions are kept open. Accordingly, the petition is disposed off. Sd/- JUDGE VGR "