PODDAR NIKET DEVELOPERS LLP V. INCOME TAX OFFICER

WP/25521/2023

AI Insights

The case involves Poddar Niket Developers LLP, which challenged the initiation of reassessment proceedings for the assessment year 2016-17 by the Income Tax Officer, Ward 1(2)(1), Bengaluru. The petitioner argued that their response to the notice under Section 148A(b) of the Income Tax Act was not considered, leading to the impugned order and notice being issued. The petitioner had undergone a change in entity type and PAN, which was not adequately acknowledged in the reassessment proceedings. The court found that the petitioner's response was not properly considered, leading to the quashing of the order and notice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 684798 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: TANMAYEE RAJKUMAR
• Keywords: Income Tax; Limited Liability Partnership; Permanent Account Number; Reassessment proceedings; Writ petition
• Section: 148; 148A(d); 226; 227

Judgement Text

" - 1 - NC: 2023:KHC:42182 WP No. 25521 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 25521 OF 2023 (T-IT) BETWEEN: PODDAR NIKET DEVELOPERS LLP (FORMERLY PODDAR NIKET DEVELOPERS LIMITED) 26/1, SUA HOUSE, KASTURBA ROSS ROAD, BANGALORE-560001 REPRESENTED HEREIN BY ITS AUTHORIZED SIGNATORY S R KALYANAM. …PETITIONER (BY SMT. TANMAYEE RAJKUMAR.,ADVOCATE) AND: 1. INCOME TAX OFFICER WARD 1(2)(1) BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA BENGALURU-560095. 2. THE PRINCIPA CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA, BANGALORE C R BUILDING, QUEENS ROAD BENGALURU-560001. 3. ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, ROOM NO.401, 2ND FLOOR, E RAMP JAWAHARLAL NEHRU STADIUM Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:42182 WP No. 25521 of 2023 DELHI-110003. …RESPONDENTS (BY SRI.M. DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 28/02/2023 BEARING NO. ITBA/ AST /F/ 148A/ 2022-23/1050185362(1) (ANNEXURE-F) PASSED BY THE R1 UNDER SECTION 148A(d) OF THE ACT, REJECTING THE PETITIONERS OBJECTION AS TO THE INITIATION OF THE REASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2016-17; QUASH THE NOTICE DATED 06/03/2023 ISSUED BY THE R1 BEARING NO. ITBA/AST/S/148.1/2022- 23/1050433756(1) (ANNEXURE-G) UNDER SECTION 148 OF THE ACT FOR THE ASSESSMENT YEAR 2016-17. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has impugned the first respondent’s order dated 28.02.2023 [Annexure-F] under Section 148A(d) of the Income Tax Act, 1961 [for short, ‘the IT Act’] and the notice dated 06.03.2023 issued under Section 148 of the Act - 3 - NC: 2023:KHC:42182 WP No. 25521 of 2023 [Annexure-G]. These proceedings relate to the assessment year 2016-17. The petitioner has impugned these proceedings essentially on the ground that the response filed upon service of notice under Section 148A(b) of the IT Act has not been considered. Smt. Tanmayee Rajkumar, the learned counsel for the petitioner, and Sri M. Dilip, the learned standing counsel for the respondents, who is called upon to accept notice, are heard for final disposal in the light of this contention. 2. The first respondent in the impugned adjudication order dated 28.02.2023 has considered the petitioner’s response thus: “In response to notice, the assessee furnished its reply on 31/01/2023. The assessee has stated that M/s. Poddar Niket Developers Limited is converted in LLP w.e.f. 26th August 2016. Further, the return of income is filed in the case of M/s. Poddar Niket Developers Limited declaring an income of Rs.1,64,24,370/-. - 4 - NC: 2023:KHC:42182 WP No. 25521 of 2023 The reply of the assessee has been gone through, however, the same is not acceptable for the reason that the assessee is non-filer (re- verified from e-filer portal).” 3. However, the petitioner’s case is that it is initially allotted AAGFP6283N as its Permanent Number [PAN], but later the National Securities Depository Limited [NSDL] on its own volition, because of the obvious error in issuing this PAN to the petitioner as a firm, has issued another PAN in AAECP3825B. The petitioner also states that, the petitioner, upon allotment of this PAN [AAECP3825B], has been filing ITR for the assessment years from 2005-06 to 2016-17; that the petitioner is incorporated as a Limited Liability Partnership Firm with effect from 26.08.2016 and is allotted new PAN in AATFP0654N and for the assessment years thereafter viz., the assessment year 2017-18 the petitioner has been filing ITR with this new PAN. - 5 - NC: 2023:KHC:42182 WP No. 25521 of 2023 4. The present proceedings, which are for the assessment year 2016-17, are initiated on the ground that the ITR have not been filed and this is with reference to the original PAN [AAGFP6283N], but the petitioner has filed ITR declaring certain income and such ITR is also processed vide intimation dated 22.03.2018. It cannot be disputed that the petitioner has filed detailed reply to the notice under Section 148A(d) of the IT Act setting forth the material circumstances, and the first respondent should have considered continuation of the proceedings in the light of such reply and the failure renders the impugned adjudication order untenable in law. Hence, there is interference and the following: ORDER The petition is allowed, and the impugned order dated 28.02.2023 [Annexure-F] and notice dated 06.03.2023 [Annexure-G] are quashed restoring the - 6 - NC: 2023:KHC:42182 WP No. 25521 of 2023 proceedings to the stage under Section 148A[b] of the IT Act. Sd/- JUDGE SA ct:sr "