Prabhakaran Arumugam V. The Income Tax Officer, Ward-3(3)(1) and Assessment Unit, Income Tax Department, Ministry of Finance

WP/16619/2024

AI Insights

The petitioner, Prabhakaran Arumugam, challenged several notices and orders issued by the Income Tax Department concerning the assessment year 2015-16. The primary contention was that the notice under Section 148A(b) was based on incorrect information regarding the receipt of Rs. 5,20,00,000 from a sale transaction. The petitioner argued that the actual amount was Rs. 1,30,00,000, and after necessary deductions, the taxable amount would be below Rs. 50 lakhs, thus not warranting further proceedings. The court decided to set aside all subsequent orders and notices, including the assessment and penalty orders, and remanded the case to the stage of the initial notice for a detailed examination of the contentions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796539 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-07-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH
• Assessee Lawyers: R RAMAMURTHY
• Keywords: Assessment Order; Capital Gains; Income Tax; Jurisdiction; Notice Quash; Penalty order; Writ petition
• Section: 148; 148A(b); 148A(d); 226; 227

Judgement Text

" - 1 - NC: 2024:KHC:26180 WP No. 16619 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 16619 OF 2024 (T-IT) BETWEEN: PRABHAGARAN ARUMUGAM, S/O ARUMUGAM, AGED ABOUT 72 YEARS, NO.30, VASANTHA NAGAR, BEML NAGAR, BANGARPET - 563 115, KOLAR DISTRICT. …PETITIONER (BY SRI. R. RAMA MURTHY, ADVOCATE) AND: 1. THE INCOME TAX OFFICER, WARD-3(3)(1), HMT BHAVAN, NO.59, BELLARI ROAD, GANGANAGAR, BANGALORE - 560 032. 2. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, NEW DELHI - 110 001. …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE DATED 15.03.2022 ISSUED U/S. 148A(b) OF THE ACT (ANNEXURE-B) [ITBA/AST/F/148A(SCN)/2021-22/1040759641 Digitally signed by YAMUNA K L Location: High Court of Karnataka - 2 - NC: 2024:KHC:26180 WP No. 16619 of 2024 (1)] ISSUED FOR THE ASSESSMENT YEAR 2015-16 BY THE R-1 AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Learned counsel Sri. Thirumalesh accepts notice for the respondents. 2. The petitioner has sought for issuance of writ of certiorari to quash the notice under Section 148A(b) of the Income Tax Act, 1961 (for short 'the Act') at Annexure-'B' as well as the order under Section 148A(d) of the Act at Annexure-'C'. The petitioner has challenged the notice under Section 148 of the Act at Annexure-'D' and the assessment order at Annexure-'F' as well as the penalty orders at Annexures-'G' and 'G1'. 3. It is the case of the petitioner that the notice under Section 148A(b) of the Act itself is on the basis of incorrect information that the assessee having received an amount of Rs.5,20,00,000/- (Rupees five crores twenty - 3 - NC: 2024:KHC:26180 WP No. 16619 of 2024 lakhs only) during the relevant assessment year with respect to sale transaction. 4. It is submitted that sale deed was jointly executed by husband and wife along with the daughter and the entirety of the sale transaction i.e., the sale deed of 19.05.2014 and the subsequent agreement at Annexure-'A1' is Rs.1,30,00,000/- (Rupees one crore thirty lakhs only) are taken together and if necessary deductions are made while calculating capital gains as regards the two recipients of the sale consideration, the taxable amount would fall below the limit of rupees fifty lakhs and accordingly, the proceedings would have to be dropped while passing an order under Section 148A(d) of the Act. 5. Taking note of the contentions raised which goes to the jurisdiction of the authority to initiate proceedings, it would be appropriate to keep all contentions open and relegate the petitioner to the stage of notice under Section 148A(b) of the Act. - 4 - NC: 2024:KHC:26180 WP No. 16619 of 2024 6. Accordingly, the order at Annexure-'C' passed under Section 148A(d) of the Act, so also the notice under Section 148 at Annexure-'D', the assessment order at Annexure-'F' and the penalty orders at Annexures-'G' and 'G1' are set aside. The matter is relegated to the stage of reply to the notice under Section 148A(b) of the Act. All contentions are kept open. 7. Accordingly, petition is disposed off. Sd/- JUDGE MCR "