PRAGATHI SANJIETH SHETTY V. THE INCOME TAX OFFICER

WP/21284/2023

AI Insights

The case involves Pragathi Sanjieth Shetty, who filed a writ petition against the Income Tax Department challenging several notices and orders related to the assessment year 2015-16. The petitioner contested notices under Section 148A(b) and Section 148, as well as orders under Section 147 read with Section 144, and penalty notices under Section 271(1)(c), Section 271(1)(b), and Section 271F of the Income Tax Act, 1961. The primary grievance was the lack of reasonable opportunity to respond to these notices and orders, as they were addressed to the petitioner's former tax professional. The court noted a similar case involving the petitioner's husband, where the orders were set aside due to similar reasons, and thus decided to allow the current petition on the same grounds.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 761743 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-02-2024
• Assessment Year: misc
• Other Referred Cases: W.P.No.20881/2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: RAVI SHANKAR V
• Keywords: Assessment Year 2015-16; Income Tax; Notice Quashing; Penalty Quashing; Writ petition
• Section: 147; 144; 271(1)(c); 271(1)(b); 271F; 148A(b); 148A(d)

Judgement Text

" - 1 - NC: 2024:KHC:5100 WP No. 21284 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 21284 OF 2023 (T-IT) BETWEEN: PRAGATHI SANJIETH SHETTY SURABHI S NEXT ANEMAHAL SAKLESHPURA, HASSAN - 573 134 ALSO AT: PRAGATHI SAJIETH SHETTY AGED ABOUT 35 YEARS D/O SRI. PRABHAKAR SHETTY RESIDING AT: CHAMPAKANAGAR SAKALESHPUR – 573 134. …PETITIONER (BY SRI. RAVI SHANKAR S V.,ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD 1 AND TPS, AAYAKAR BHAVAN, 2ND STAGE, BELUR ROAD, HASSAN - 573 201. 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, E-RAMP, JAWAHARLAL NEHRU STADIUM DELHI - 110 003. …RESPONDENTS (BY SRI.M. DILIP.,ADVOCATE) THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE NOTICE UNDER SECTION 148A(b) OF THE DTD 19/03/2022 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2021-22/1041027498(1) ISSUED BY THE R-1 FOR THE AY 2015-16 HEREIN MARKED AS ANNEXURE-A AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:5100 WP No. 21284 of 2023 ORDER In this petition, petitioner has sought for the following reliefs:- “ i) Issue a writ Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148A(b) of the Act dated: 19.03.2022 bearing DIN No.ITBA/AST/F/148A(SCN)/2021-22/1041027498(1) issued by the Respondent No.1 for the assessment year 2015-16 herein marked as Annexure-A. ii) Issue a writ Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148A(b) of the Act dated: 30.03.2022 bearing DIN No.ITBA/AST/F/148A/2021-22/1042129038(1) issued by the Respondent No.1 for the assessment year 2015-16 herein marked as Annexure-A1. iii) Issue a writ Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148 of the Act dated: 30.03.2022 bearing DIN No.ITBA/AST/S/148_1/2021-22/1042129435(1) issued by the Respondent No.1 for the assessment year 2015-16 herein marked as Annexure-A2. iv) Issue a writ Certiorari or direction in the nature of a writ of certiorari quashing order passed u/s 147 r.w.s. 144 dated: 16.03.2023 bearing ITBA/AST/S/147/2022- 23/1050864228(1) issued by the Respondent No.2 for the assessment year 2015-16 herein marked Annexure-A3. - 3 - NC: 2024:KHC:5100 WP No. 21284 of 2023 v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice u/s 271(1)(c) of the Act dated: 16.03.2023 bearing DIN No. ITBA/PNL/F/271 (1) (C) 2022-23/1050864280(1) by the Respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A4. vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice dated: 16.03.2023 u/s 271(1)(b) of the Act bearing DIN No. ITBA/PNL/F/271 (1) (b) 2022-23/1050864279(1) by the Respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A5. Vii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice dated: 16.03.2023 u/s 271F of the Act bearing DIN No. ITBA/PNL//271F (1) (C) 2022-23/1050864280 (1) by the Respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A6. viii) 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 respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits in relation to the same transaction and - 4 - NC: 2024:KHC:5100 WP No. 21284 of 2023 very same assessment year 2015-16, an order under Section 148A(d) of the Income Tax Act, 1961, having been passed against one Sri.Sanjieth Sachidananda Shetty, husband of the petitioner was set aside by the co-ordinate Bench of this Court in W.P.No.20881/2023 decided on 26.10.2023, wherein it is held as under:- The petitioner has called in question, amongst others, the order dated 31.03.2022 [Annexure-A1] under Section 148A(d) of the Income Tax Act, 1961 [for short, ‘the IT Act’], the notice dated 31.03.2022 [Annexure-A2] under Section 148 of the IT Act and the order dated 21.03.2023 [Annexure-A3] under Section 147 of the IT Act read with Section 144 of the IT Act. The petitioner has also called in question the penalty orders dated 28.08.2023 and 24.08.2023 [Annexures – A4 and A5]. The petitioner’s primary grievance against these orders is on the ground of lack of reasonable opportunity. 2. Sri Ravi Shankar S.V., the learned counsel for the petitioner, and Sri M. Dilip, the learned counsel for the respondents, are heard for the final disposal of the petition. It is undisputed that the notice under Section 148A(b) of the IT Act for the assessment year 2015-16 is issued on 23.03.2022 asserting that the petitioner has not filed ITR for the assessment year 2015-16 and there are transactions in excess of Rs.2,00,00,000/- during the financial year 2014- 15. - 5 - NC: 2024:KHC:5100 WP No. 21284 of 2023 3. The petitioner contents that the notices under Section 148A(b) of the IT Act, as also the order under Section 148A(d) of the IT Act, are addressed to the petitioner’s Income Tax Professional who is no longer in practice and therefore, the petitioner did not have reasonable opportunity. The petitioner also contends that if such opportunity is available, he would have demonstrated that the petitioner and his wife have purchased two immovable properties on 02.06.2014 and 03.12.2014 respectively availing financial assistance from State Bank of India, Sakleshpur and M/s. Subhagruha Housing Loans, Belur and that there is duplication of consideration to conclude that Rs.2,00,00,000/- has escaped income tax. The petitioner, to support these contentions, relies upon the sale deeds as also on the respective bank statements. 4. The petitioner’s contention that the notices were addressed to his Income Tax Professional is not seriously disputed. If indeed the petitioner is not served with notice and there could be explanation as regards the transaction, the proceedings under Section 147 of the IT Act may not be justified. Therefore, there must be reconsideration and hence, the following: ORDER [a] The petition is allowed in part and the impugned order dated 31.03.2022 [Annexure-A1], the notice dated 31.03.2022 [Annexure-A2], the order dated 21.03.2023 [Annexure-A3] and the consequential penalty orders dated 24.08.2023 and 28.08.2023 [Annexures – A5 and A4] are quashed restoring the proceedings for reconsideration under Section 148A(d) of the I.T. Act. - 6 - NC: 2024:KHC:5100 WP No. 21284 of 2023 [b] The petitioner will be at liberty, within a period of three weeks from the date of receipt of a certified copy of this order, to file on his own initiative the details of the disbursement of the loan by the Bank/society Loan and the utilization thereof. The respondents shall consider the same before proceeding to pass the order under Section 148A(d) of the IT Act. It is needless to observe that if there is any delay in opening of the portal to enable the petitioner to file details, there shall be corresponding extension of time viz., three weeks from the date of opening of the portal. 3.1 It is submitted that since the present petition by the wife of Sri.Sanjieth Sachidananda Shetty in relation to the very same transaction and in respect of the very same assessment year, the present petition is also to be allowed and disposed of in the same terms. 4. Learned counsel for the respondents – revenue does not dispute the aforesaid submission made by the petitioner. 5. In view of the aforesaid facts and circumstances, I deem it just and appropriate to set aside the impugned orders / notices issued by the respondents and necessary directions in this regard be issued to the respondents. - 7 - NC: 2024:KHC:5100 WP No. 21284 of 2023 6. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned Notice at Annexure-A1 dated 30.03.2022, impugned Notice at Annexure-A2 dated 30.03.2022, impugned order at Annexure-A3 dated 16.03.2023, impugned penalty notice at Annexure-A4 dated 16.03.2023, impugned penalty notice at Annexure-A5 dated 16.03.2023 and impugned penalty notice at Annexure-A6 dated 16.03.2023 issued by the respondents are hereby set aside. (iii) The matter is remitted back to the 1st respondent for reconsideration afresh from the stage of 148A(b) Notice dated 19.03.2022. (iv) Liberty is reserved in favour of the petitioner to submit reply along with documents which shall be considered in accordance with law. Sd/- JUDGE Srl. "