Ozone Urbana Infra Developers Pvt. Ltd. V. Deputy Commissioner of Income Tax, Central Circle \\u2013 2(1)

WP/22466/2024

AI Insights

The case involves M/s Ozone Urbana Infra Developers Pvt. Ltd., represented by its director, challenging notices issued by the Deputy Commissioner of Income Tax, Central Circle \\u2013 2(1), under Section 226(3) of the Income Tax Act. The notices demanded payment for various assessment years, which the petitioner contested as being based on incorrect adjustments of previous payments. The court examined the claims of excess payments made by the petitioner for certain assessment years and the respondent's acknowledgment of these excesses. After considering the arguments and the material on record, the court quashed the notices and directed appropriate adjustments to be made by the respondent.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 795456 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 27-08-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: ANNAMALAI
• Keywords: Income Tax; Notice Quash; Writ petition; Bank Account Adjustment
• Section: 226(3)

Judgement Text

" - 1 - NC: 2024:KHC:34221 WP No. 22466 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.22466 OF 2024 (T-IT) BETWEEN: M/S OZONE URBANA INFRA DEVELOPERS PVT. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, REPRESENTED BY ITS DIRECTOR, SRI. VASUDEVAN SATHYAMOORTHY, S/O. LATE SRI. V. SATHYAMOORTHY, AGED ABOUT 57 YEARS, OFFICE AT NO.38, ULSOOR ROAD, BENGALURU – 560 042. …PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE – 2(1), CENTRAL REVENUE BUILDING, QUEENS’ ROAD, BENGALURU – 560 001. …RESPONDENT (BY SRI. M. DILIP, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE NOTICE ISSUED TO THE BANK MANAGER, YES BANK LIMITED, GROUND FLOOR, PRESTIGE OBELISK, MUNICIPAL NO.3, KASTURBA ROAD, BENGALURU, UNDER SECTION 226(3) OF THE ACT BY THE RESPONDENT VIDE DIN AND NOTICE NO.ITBA/COM/F/17/2024-25/1067066835(1) DATED 26/07/2024 ENCLOSED AND MARKED AS ANNX-A1 AND QUASH THE NOTICE ISSUED TO THE BANK MANAGER, YES BANK LIMITED, GROUND FLOOR, PRESTIGE OBELISK, MUNICIPAL NO.3, KASTURBA ROAD, BENGALURU, UNDER SECTION 226(3) OF THE ACT BY THE RESPONDENT VIDE DIN AND NOTICE NO.ITBA/COM/F/17/2024-25/ 1067608181(1) DATED 13/08/2024 ENCLOSED AND MARKED AS ANNX-A2 AND ETC., Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:34221 WP No. 22466 of 2024 THIS WRIT PETITION, COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks the following reliefs: “a) Issue a writ in the nature of certiorari and quash the notice issued to The Bank Manager, Yes Bank Limited, Ground Floor, Prestige Obelisk, Municipal No.3, Kasturba Road, Bengaluru, under Section 226(3) of the Act by the Respondent vide DIN and Notice No. ITBA/COM/F/17-2024-25/1067066835(1) dated 26.07.2024 enclosed and marked as Annexure-A1. b) Issue a writ in the nature of certiorari and quash the notice issued to The Bank Manager, Yes Bank Limited, Ground Floor, Prestige Obelisk, Municipal No.3, Kasturba Road, Bengaluru, under section 226(3) of the Act by the Respondent vide DIN and Notice No. ITBA/COM/F/17/2024-25/1067608181(1) dated 13.08.2024 enclosed and marked as Annexure-A2. c) Issue a writ in the nature of certiorari and quash the notice issued to The Bank Manager, HDFC Bank Limited, No.128/1, Vidya Deep College Building, Ulsoor Road, Bangalore 560042, under section 226(3) of the Act by the Respondent vide DIN and Notice No. ITBA/COM/F/17/2024-25/1067609149(1) dated 13.08.2024 enclosed and marked as Annexure-A3. - 3 - NC: 2024:KHC:34221 WP No. 22466 of 2024 d) Issue a writ of mandamus or direction in the nature of writ of mandamus directing the Respondent to refund an amount of Rs.65,35,125/- collected through illegal adjustment of refunds of subsequent assessment years over and above 20% of the disputed demand as per CBDT Instruction No.1914, as on the date of filing this petition for the AY 2016-17. e) And pass such other orders as this Hon’ble court deems fit and proper in the interest of justice and equity.” 2. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record. 3. A perusal of the material on record will indicate that vide Annexure – A1 dated 26.07.2024, the respondent invoked Section 226(3) of the Income Tax Act and called upon the petitioner to pay a sum of Rs.58,64,09,014/- as hereunder: A.Y. Demand (In Rs.) 2016-17 53,20,984 2017-18 81,54,300 2018-19 20,710 2022-23 57,29,13,020 Total 58,64,09,014 Subsequently, the aforesaid notice was superseded and modified by issuance of notice once again invoking Section 226(3) - 4 - NC: 2024:KHC:34221 WP No. 22466 of 2024 of IT Act, to Yes Bank and HDFC Bank, respectively, insofar as Assessment years 2016-17 and 2022-23 are concerned and restricted demand only insofar as Assessment years 2017-18 and 2018-19 as hereunder: A.Y. Demand (In Rs.) 2017-18 81,54,300 2018-19 20,710 Total 81,74,470 4. Learned counsel for the petitioner submits that a sum of Rs.65,35,125/- has been collected / received by the respondent from the petitioner in relation to the assessment year 2016-17. So also, a sum of Rs.83,47,646/- has also been collected / received by the respondent from the petitioner for assessment year 2012-13. It is therefore submitted that the aforesaid excess sums paid by the petitioner and received / collected by the respondent may be adjusted as against the demand of Rs.81,54,300/- in the impugned notices in respect of assessment year 2017-18 and the notices in this regard may be quashed. It is further submitted that his demand insofar as 2018-19 is concerned, the same has been withdrawn by issuance of Demand Notice at Annexure – E dated 31.12.2019 indicating that the amount payable was ‘Nil’. - 5 - NC: 2024:KHC:34221 WP No. 22466 of 2024 5. Per contra, learned counsel for the respondent fairly submits that from out of a sum of Rs.81,54,300/- demanded in the impugned notices towards assessment year 2017-18, the respondent had received and collected a sum of Rs.65,35,125/- which was paid in excess by the petitioner in relation to the assessment year 2016-17. It is submitted that there was ‘Nil’ amount payable by the petitioner for the assessment year 2018-19. It is also submitted that insofar as the assessment year 2012-13 is concerned, in the event the petitioner had paid the excess amount of Rs.83,47,646/-, the respondent would necessarily make necessary verification and proceed further in accordance with law by making necessary adjustments by taking into account even this amount in relation to the demand made in the impugned notices. 6. In view of the aforesaid facts and circumstances, I deem it just and appropriate to dispose of this petition by quashing the impugned notices at Annexures – A1, A2 and A3 and by issuing certain directions to the respondent. 7. In the result, I pass the following: ORDER (i) The petition is hereby allowed. - 6 - NC: 2024:KHC:34221 WP No. 22466 of 2024 (ii) The impugned notices at Annexures A1, A2 and A3 are hereby quashed. (iii) The respondent is directed to adjust / appropriate a sum of Rs.65,35,125/- paid by the petitioner in relation to assessment year 2016-17 towards the demand of Rs.81,54,300/- in relation to assessment year 2017-18. (iv) Respondent is directed to make necessary verification as regards excess amount paid by the petitioner for the assessment year 2012-13 and adjust / appropriate the same for the balance amount in relation to assessment year 2017-18 and proceed further in accordance with law within a period of two weeks from today. (v) It is further directed that for a period of two weeks from today, the petitioner shall not operate the bank accounts in Yes Bank and HDFC bank. It is needless to state that after completion of two weeks from today, the petitioner would be entitled to operate the said accounts. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV List No.: 2 Sl No.: 8 "