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

WP/14757/2024

AI Insights

The case involves Maruthi Education Society Murnad, an educational institution, challenging several notices and orders issued by the Income Tax Department under various sections of the Income Tax Act, 1961, including Section 148A(b) for the assessment year 2016-17. The petitioner argued that their income, being less than one crore rupees, is exempt from tax if claimed under the specified section. Due to bona fide reasons, the petitioner did not initially respond to the notices. The court decided to set aside all related notices and orders and remand the case for a fresh consideration, providing the petitioner an opportunity to respond and substantiate their claim for tax exemption.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796951 (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; Exempt income; Income Tax; Notice Quash; Preliminary Hearing
• Section: 147; 148; 144; 271(1)(c); 274; 271(1)(b); 271F; 151; 144B; 10(23C)(iiiad); 148A(b); 148A(d); 226; 227

Judgement Text

" - 1 - NC: 2024:KHC:23900 WP No. 14757 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. 14757 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:23900 WP No. 14757 of 2024 E RAMP, JAWAHARLAL NEHRU STADIUM DELHI-110 003 3. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX THE OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX C R BUILDING, QUEENS ROAD BANGALORE-560 001 … 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 10/02/2023 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2022- 23/1049610378(1), ISSUED BY THE R-1 FOR THE ASSESSMENT YEAR 2016-17 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 10.02.2023 as well as the order passed under Section 148A(d) at Annexure-'A1' dated 22.03.2023, the notice issued under Section 148 at Annexure-'A2' dated 22.03.2023, the order passed under Section 151 at Annexure-'A3' dated 20.03.2023, the order - 3 - NC: 2024:KHC:23900 WP No. 14757 of 2024 passed under Section 147 read with Section 144 read with Section 144B at Annexure-'A4' dated 03.01.2024, penalty notice issued under Section 274 read with Section 271(1)(c) at Annexure-'A5' dated 03.01.2024, penalty notice issued under Section 274 read with Section 271(1)(b) at Annexure-'A6' dated 03.01.2024 and the penalty notice issued under Section 274 read with Section 271F at Annexure-'A7' dated 03.01.2024. 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:23900 WP No. 14757 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 10.02.2023, the order at Annexure-'A1' dated 22.03.2023, the notice at Annexure-'A2' dated 22.03.2023, the order at Annexure-'A3' dated 20.03.2023, the order at Annexure-'A4' dated 03.01.2024, penalty notices at Annexures-'A5', 'A6' and 'A7', all dated 03.01.2024, are set aside. All contentions are kept open. Accordingly, the petition is disposed off. Sd/- JUDGE VGR "