PUSHPAS FUEL STATION V. THE INCOME TAX OFFICER

WP/21728/2024

AI Insights

The case involves Pushpas Fuel Station, a partnership firm that was dissolved upon the death of one partner, Ms. Pushpa. The surviving partner, Nanjundajah Mohan Kumar, continued the business as a sole proprietor and filed income tax returns under his individual PAN. Despite this, the Income Tax Department issued notices and orders against the dissolved partnership for the assessment year 2019-20. The petitioner contested these actions, leading to the High Court's decision to quash the notices and orders, citing that the petitioner had provided necessary particulars and documents which were not considered by the respondents.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 751062 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 17-09-2024
• Assessment Year: misc
• Laws Referred To: Indian Partnership Act 1932, Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: RAVISHANKAR
• Keywords: Assessment Year 2019-20; Income Tax; Notice Quashing; Partnership Dissolution; Writ of Certiorari
• Section: 147; 148; 144; 271B; 270A; 144B; 148A(b); 148A(d); 271A

Judgement Text

" - 1 - NC: 2024:KHC:38550 WP No. 21728 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 21728 OF 2024 (T-IT) BETWEEN: PUSHPAS FUEL STATION, REGISTERED UNDER INDIAN PARTNERSHIP ACT 1932, NO.63/2 HEBBAGODI VILLAGE, P.S HOSUR MAIN ROAD, HEBBAGODI, BANGALORE-560 100 PAN: AATFP5629F ALSO AT, MYSORE NANJUNDAJAH MOHAN KUMAR, AGED ABOUT 53 YEARS, S/O D. NANJUNDAIAH, NO.004, GROUND FLOOR, SUNVIEW HOMES DADDYS GARDEN, KAMMASANDRA, BANGALORE-560 100 …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE) AND: 1. THE INCOME TAX OFFICER, WARD 4(3)(3), BANGALORE 560 095. 2. NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:38550 WP No. 21728 of 2024 INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI 110 003 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 2, THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX - 2, BMTC BUILDING, KORAMANGALA, BANGALORE - 560 095 …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE UNDER SECTION 148A(b) OF THE ACT, DATED 14.02.2023 BEARING DIN NO.ITBA/AST/F/148A(SCN)/2022- 23/1049743539(1) ISSUED BY THE R-1 FOR THE ASSESSMENT YEAR 2019-20 HEREIN MARKED AS ANNEXURE-A AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR - 3 - NC: 2024:KHC:38550 WP No. 21728 of 2024 ORAL ORDER In this petition, petitioner seeks following reliefs. i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148A(b) of the Act, dated 14/02/2023 bearing No.ITBA/AST/F/148A(SCN)/2022-23/1049743539(1), issued by the Respondent No.1 for the assessment year 2019-20 herein marked as Annexure - A. ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order under Section 148A(d) of the Act, dated 29/03/2023, bearing DIN No.ITBA/AST/F/148A/2022-23/1051534635(1) issued by the Respondent No.1 for the assessment year 2019- 20 herein marked as Annexure - A1. iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice under Section 148 of the Act dated 29/03/2023 bearing DIN No. ITBA/AST/S/148_1/2022-23/1051615742(1) issued by the Respondent No.1 for the assessment year 2019-20 herein marked as Annexure - A2. iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order passed Under section 147 Γ.พ.ς 144, 144B dated 25/01/2024 bearing DIN No.ITBA/AST/S/147/2023-24/1060139601(1) issued by the Respondent No. 2 for the assessment year 2019-20 herein marked as Annexure - A3. - 4 - NC: 2024:KHC:38550 WP No. 21728 of 2024 v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under Section 271A, of the Act dated 18/07/2024 bearing DIN No. ITBA/PNL/F/271A/2024-25/1066824255(1) issued by the Respondent No.2 for the assessment year 2019- 20 herein marked as Annexure - A4. vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under Section 271B of the Act dated 18/07/2024 bearing DIN No. ITBA/PNL/F/271B/2024-25/1066824258(1) issued by the Respondent No.2 for the assessment year 2019- 20 herein marked as Annexure - A5. vii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order under Section 270A of the Act dated 22/07/2024 bearing DIN No. ITBA/PNL/F/270A/2024-25/1066975301(1), issued by the Respondent No.2 for the assessment year 2019- 20 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 Shri Ravi Shankar S.V., learned Counsel for the petitioner and Shri E.I.Sanmathi, learned Counsel for the respondents. - 5 - NC: 2024:KHC:38550 WP No. 21728 of 2024 3. It is the specific contention of learned Counsel for the petitioner that petitioner was a partnership firm and it consisted of two partners viz., Ms.Pushpa and Shri Mohan Kumar, out of whom aforesaid Ms.Pushpa expired on 03.01.2018 and as per the terms and conditions of the partnership deed which was at will, the partnership stood dissolved by virtue of Section 42 of the Indian Partnership Act, 1932, pursuant to which the surviving partner became a sole proprietor and submitted his returns for the assessment year 2019-20 in his individual name and individual PAN number. It is contended that despite the petitioner submitting his income tax returns in his individual name and in his individual PAN number as a proprietor pursuant to the dissolution of the erstwhile partnership firm, respondent No.1 issued a show cause notice dated 14.02.2023 under Section 148-A(b) of the Income Tax Act, 1961, for the assessment year 2019-20. It is further contended that petitioner submitted a reply enclosing the copy of the death certificate of Ms.Pushpa and PAN card of Mohan Kumar in his individual capacity as the proprietor and informed the respondent- Assessing officer that he was the sole proprietor and consequently, the question of taking steps as against the erstwhile/dissolved partnership firm would not arise and further - 6 - NC: 2024:KHC:38550 WP No. 21728 of 2024 proceedings may be dropped. It is the grievance of the petitioner that despite the dissolution of the partnership firm upon the demise of Ms.Pushpa and filing of income tax returns in his individual name by Mohan Kumar for the assessment year 2019-20 with his personal PAN number, first respondent has proceeded to pass the impugned order dated 29.03.2023 under Section 148(A)(d) of the Act followed by the impugned notice under Section 148 of the Act and also the impugned penalty orders, all of which are assailed in the present petition. 4. Per contra, learned Counsel for the respondents submits that since the petitioner did not produce documentary evidence in support of his claim, first respondent has proceeded to pass the impugned orders which do not warrant interference in this present petition. 5. A perusal of the material on record would indicate that the petitioner had given all necessary particulars and details along with documents to the respondents, who did not consider the same while passing the impugned order. It is also pertinent to note that petitioner would be entitled to furnish such other additional details and documents in support of his claim. - 7 - NC: 2024:KHC:38550 WP No. 21728 of 2024 6. Under these circumstances, I deem it just and appropriate to set aside Annexures A1 to A6 and remit the matter back to the respondents for reconsideration afresh in accordance with law. 7. In the result, I pass the following: ORDER (i) The petition is hereby allowed; (ii) Notice dated 14.02.2023 (Annexure-A), Order dated 29.03.2023(Annexure A1), Notice dated 29.03.2023 (Annexure-A2), Order dated 25.01.2024(Annexure-A3), Penalty Orders dated 18.07.2024 (Annexue-A4 & A5) and Penalty Order dated 22.07.2024 (Annexure-A6) are hereby quashed. (iii) The matter is remitted back to the stage of the petitioner submitting a reply to the notice under Section 148A(b) of the Act dated 14.02.2023. (iv) Liberty is reserved in favour of the petitioner to submit pleadings, documents etc., which would be considered by the respondents which shall provide sufficient and - 8 - NC: 2024:KHC:38550 WP No. 21728 of 2024 reasonable opportunity to the petitioner and proceed further in accordance with law. Sd/- (S.R.KRISHNA KUMAR) JUDGE YN List No.: 1 Sl No.: 30 "