MR DANNY GNANAMANI SAM V. THE INCOME TAX OFFICER

WP/2398/2024

AI Insights

The case involves Mr. Danny Gnanamani Sam, the petitioner, challenging several orders and notices issued by the Income Tax Department concerning the assessment year 2016-17. The petitioner argued that the orders were passed without considering his replies, thus violating the principles of natural justice. The respondents contended that the petition was not maintainable due to the availability of an alternative remedy by way of an appeal. However, the court found that the impugned orders were indeed passed without proper consideration of the petitioner's submissions, leading to the decision to set aside the orders and remit the matter for fresh consideration.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 756600 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 13-02-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: SANDEEP HUILGOL
• Keywords: Assessment Year 2016-17; Efficacious Remedy; Income Tax; Quashing of order; Violation of natural justice
• Section: 147; 148; 144; 144B; 148A(d); 156

Judgement Text

" - 1 - NC: 2024:KHC:6200 WP No. 2398 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 2398 OF 2024 (T-IT) BETWEEN: MR. DANNY GNANAMANI SAM, AGED ABOUT 43 YEARS, S/O MR. S. GNANAMANI, ADDRESS AT 200, 18TH MAIN ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560 095. …PETITIONER (BY SRI. SANDEEP HUILGOL, ADVOCATE) AND: 1. THE INCOME TAX OFFICER, WAR 7(2) (3), BANGALORE, BMTC BUILDING, 80 FT ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095. 2. THE ASSESSMENT UNIT, INCOME TAX DEPARTMENT, 2ND FLOOR, JAWAHARLAL NEHRU STADIUM, NEW DELHI - 110 003. 3. CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, Digitally signed by Vandana S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:6200 WP No. 2398 of 2024 NEW DELHI - 110 002. REPRESENTED BY ITS CHAIRPERSON 4. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KARNATAKA GOA REGION, GROUND FLOOR, CR BUILDING, NO.1 QUEENS ROAD, BENGALURU - 560 001. …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED:27.03.2023 BEARING DIN AND NOTICE NO.ITBA/AST/F/148A/2022-23/1051393402 (1) PASSED BY THE R1 U/S 148A(d) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2016-17 ANNEXURE-A AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER In this petition, the petitioner seeks the following reliefs: \"i. Quashing the Order Dtd 27.03.2023 bearing DIN and Notice No.ITBA/AST/F/148A/2022-23/1051393402 (1) passed by the 1st Respondent Under Section 148A(d) Of the Income Tax Act, 1961, for The assessment year 2016-17 (Annexure-'A') ii. Quashing the Impugned Notice dated 29.03.2023 bearing DIN and Notice No.ITBA/AST/S/148_1/2022- 23/1051538749 (1), Issued by the 1st Respondent under Section 148 Of the Income Tax Act, 1961, for the assessment Year 2016-17 (Annexure-'B'); iii. Quashing the Impugned Assessment Order dated 04.01.2024 bearing DIN ITBA/AST/S/147/2023- - 3 - NC: 2024:KHC:6200 WP No. 2398 of 2024 24/1059356597(1), passed by the 2nd Respondent under Section 147 of the Income Tax Act, 1961, r/w Sections 144 and 144B thereof, for The assessment year 2016-17 (Annexure-'C') iv. Quashing the computation sheet dated 04.01.2024 bearing DIN and Document No.ITBA/AST/S/114/2023- 24/1059356686(1) Issued by the 2nd Respondent for the assessment year 2016-17 (Annexure-'C-1'); v. Quashing the demand notice dated 04.01.2024 bearing DIN and Document No.ITBA/AST/S/156/2023- 24/1059356698(1) issued by the 2nd Respondent under Section 156 of the Income Tax Act, 1961 for the assessment year 2016-17 (Annexure-'C2'); and vi. Pass such other or further order as this Hon'ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity\". 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that pursuant to the show-cause notice issued by respondent No.1 under Clause (b) of Section 148A of the Income Tax Act, 1961 (hereinafter referred to as 'the IT Act' for short) dated 16.02.2023, the petitioner submitted a reply on 22.02.2023. Subsequently, the respondents issued one more notice dated 27.03.2023 and proceeded to pass the impugned order by coming to the conclusion that the petitioner had not submitted - 4 - NC: 2024:KHC:6200 WP No. 2398 of 2024 an additional reply to the said subsequent/further notice issued by the respondents. 4. It is the grievance of the petitioner that the subsequent/further reply dated 22.03.2023 vide Annexure-G, had not been considered by the respondents, who proceeded on the erroneous premise that no further reply was issued by the petitioner to the subsequent/further notice dated 27.02.2023 and as such, the impugned order, which is violative of principles of natural justice deserves to be set aside and the matter remitted back to the respondents for reconsideration afresh in accordance with law. 5. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. It is also submitted that since the final assessment order has already been passed, the present petition, without filing the statutory appeal, is barred on account of availability of efficacious or alternative remedy in favour of the petitioner. 6. As rightly contended by the learned counsel for the petitioner, a perusal of the impugned order will indicate that at paragraph-6, respondent No.1 has stated as under: \"Further as the assessee has not submitted documentary evidences to justify the claims of above mentioned details, a letter dated 27/02/2023 was addressed to the assessee to produce documentary evidences to support his claim on or - 5 - NC: 2024:KHC:6200 WP No. 2398 of 2024 before 02/03/2023; no further reply has been received from the assessee till date. As the sources for purchases of immovable property is not explained with documentary evidences nor the credit worthiness of the person from whom loans stated to be received. Hence this case is considered a fit case for issue of notice u/s 148 of the Income-tax Act, 1961. The document/evidence in possession reveals that the income chargeable to tax is represented in the form of an asset being land/building, which is more than 50 Lakhs, which satisfies the condition as per the provision of Sec. 149(1)(b\"'. 7. The said finding recorded by the respondents to the effect that the petitioner had not submitted any reply / further reply to the subsequent/further notice dated 27.02.2023 is clearly contrary to the material on record in the light of further replies at Annexures-G and H dated 22.03.2023 and 27.03.2023 respectively which have not been considered by the respondents before passing the impugned order which is violative of principles of natural justice especially when no sufficient and reasonable opportunity had been provided by the respondents before passing the impugned order. Under these circumstances, I am of the view that the impugned order passed by the respondents deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh in accordance with law. 8. In so far as the contentions urged by the respondents that the present petition is not maintainable on account of availability of an efficacious and alternative remedy by way of appeal is concerned, as - 6 - NC: 2024:KHC:6200 WP No. 2398 of 2024 stated supra, in view of my finding above that the impugned order under Clause (d) of Section 148A of the IT Act is violative of principles of natural justice, mere availability of remedy by way of an appeal as against subsequent assessment order would not take away the jurisdiction of this Court to entertain the present petition and as such, the said submission of respondents cannot be accepted. 11. In the result, I proceed to pass the following: ORDER a) The petition is hereby allowed. b) The impugned order dated 27.03.2023 at Annexure-A is set aside. Notice dated 29.03.2023 at Annexure-B, the assessment order dated 04.01.2024 at Annexure-C, the computation sheet dated 04.01.2024 at Annexure-C1 and demand notice dated 04.01.2024 at Annexure-C2 are hereby quashed. c) The matter is remitted back to the concerned respondent for reconsideration afresh from the stage of issuance of notice under Section 148A(b) of the Income Tax Act, 1961 and to proceed further in accordance with law. d) Liberty is reserved in favour of the petitioner to submit additional pleadings documents etc., to respondent No.1 and he shall consider the same - 7 - NC: 2024:KHC:6200 WP No. 2398 of 2024 and provide an opportunity to the petitioner and hear him and proceed further in accordance with law. Sd/- JUDGE KTY List No.: 2 Sl No.: 33 CT:SNN "