CHAITANYA MAHILA SAHAKARI BANK LIMITED V. INCOME TAX OFFICER AND ORS

WP/201988/2022

AI Insights

The case involves two writ petitions filed by Shri Shivaji Maharaj Co-op Credit Society Limited and Chaitanya Mahila Sahakari Bank Limited against the Income Tax Officer and other tax authorities. The petitions challenge the reassessment of income and subsequent penalty notices issued under various sections of the Income Tax Act, 1961. The primary contention was the confusion between the old and new PANs assigned to the petitioners, which led to incorrect reporting of transactions. The court found that the dispute arose due to this confusion and remanded the matter for further consideration, allowing the petitioners to substantiate their claims with necessary documents.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 758061 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 15-02-2023
• Assessment Year: misc
• Other Referred Cases: Shree Ramkirshna Sishu Tirtha and another vs. Income Tax Officer, Ward 23 (1), Hooghly and others, Shakuntala Sales Incorporation vs. Assistant Commissioner of Income Tax, Circle \\u2013 43/Circle-44, Kolkata and others
• Laws Referred To: Karnataka Cooperative Societies Act 1959, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: GOPALKRISHNA YADAV; ASHOK KULKARNI
• Keywords: Assessment Order; Cooperative Society; Income Tax; Notice of demand; Penalty proceedings; Permanent Account Number
• Section: 147; 148; 144; 271(1)(c); 274; 271(1)(b); 271F; 144B; 148A; 226; 227

Judgement Text

" - 1 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 15TH DAY OF FEBRUARY, 2023 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 202099 OF 2022 (T-IT) C/W WRIT PETITION NO. 201988 OF 2022 W.P.NO.202099/2022 BETWEEN: 1. SHRI SHIVAJI MAHARAJ CO-OP CREDIT SOCIETY LIMITED (A CO-OPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT 1959) NO.1 MAIN ROAD, NEAR MAHALAKSHIMI TEMPLE, VIJAYAPUR, KARNATAKA-586101 REP BY ITS GENERAL MANAGER AND AUTHORISED SIGNATORY, SHRI SANJAY VASANTRAAO JADHAV …PETITIONER (BY SRI. GOPALKRISHNA B. YADAV, & SRI ASHOK A. KULKARNI, ADVOCATES) AND: 1. INCOME TAX OFFICER WARD NO.1 & TPS BIJAPUR, AAYAKAR BHAVAN, NEAR ALL INDIA RADIO ATHANI ROAD, VIJAYAPUR, KARNATAKA-586104 Digitally signed by KHAJAAMEEN L MALAGHAN Location: High Court of Karnataka - 2 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 2. CENTRAL BOARD OF DIRECT TAXES CENTRAL SECRETARIAT, NORTH BLOCK, NEW DELHI -110001 REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX, NATIONAL FACELESS ASSESSMENT CENTRE …RESPONDENTS (BY SRI. Y.V.RAVIRAJ, ADVOCATE) THIS WRIT PETITION FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A) QUASH BY AN ORDER, WRIT, OR DIRECTION IN THE NATURE OF CERTIORARI THE ASSESSMENT ORDER PASSED U/S 147 R.W.S 144 R.W.S 144B OF THE ACT DATED 30.03.2022 BEARING DIN ITBA/AST/S/147/2021-22/1042072897(1) IN ANNEXURE-T, AND THE NOTICE OF DEMAND DATED 30.03.2022 BEARING DIN AND NOTICE NO. ITBA / AST / S / 156 / 2021-22 / 1042073350(1) IN ANNEXURE - T1 PASSED BY THE 2ND RESPONDENT AS UNLAWFUL AND ILLEGAL ALONG WITH THE ATTENDANT ACTIONS. B) QUASH BY AN ORDER, WRIT, OR DIRECTION IN THE NATURE OF CERTIORARI THE INITIATION OF PENALTY PROCEEDINGS VIDE NOTICE U/S 274 R.W.S 271(1)(B) OF THE ACT DATED 30.03.2022 BEARING DIN AND NOTICE NO.ITBA/PNL/F/271(1)(B)/2021-22/1042082942(1) IN ANNEXURE-U, NOTICE U/S 274 R.W.S 271(1)(C) OF THE ACT DATED 30.03.2022 BEARING DIN AND NOTICE NO. ITBA/PNL/F/271(1)(C)/2021-22/1042082943(1) IN ANNEXURE- V AND NOTICE U/S 274 R.W.S 271F OF THE ACT DATED - 3 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 30.03.2022 BEARING DIN AND NOTICE NO. ITBA / PNL / F / 271F / 2021-22 / 1042082944(1) IN ANNEXURE-W ISSUED BY THE 2ND RESPONDENT AS UNLAWFUL AND ILLEGAL ALONG WITH THE ATTENDANT ACTIONS AND ETC. W.P.NO.201988/2022 BETWEEN: 1. CHAITANYA MAHILA SAHAKARI BANK LIMITED (A COOPERATIVE BANK REGISTERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959) CTS NO.928/929, MIRDE GALLI, MEENAXI CHOWK, WARD NO.IV VIJAYAPUR, KARNATAKA-586101 REPRESENTED BY ITS GENERAL MANAGER, SMT. LAXMI R. BALAGOND …PETITIONER (BY SRI. GOPALKRISHNA B. YADAV, & SRI ASHOK S. KULKARNI, ADVOCATES) AND: 1. INCOME TAX OFFICER WARD 1 & TPS, BIJAPUR, AAYAKAR BHAVAN, NEAR ALL INDIA RADIO ATHANI ROAD, VIJAYAPURA, KARNATAKA-586104 2. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, BIJAPUR, AAYAKAR BHAVAN, NEAR ALL INDIA RADIO, ATHANI ROAD, VIJAYAPURA KARNATAKA-586104 - 4 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 3. PRINCIPAL COMMISSIONER OF INCOME TAX C.R. BUILDING, NAVANAGAR, HUBBALLI, KARNATAKA-580025. …RESPONDENTS (BY SRI. Y.V.RAVIRAJ, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO A) QUASH THE AN ORDER, WRIT, OR DIRECTION IN THE NATURE OF CERTIORARI THE NOTICE U/S 148 DATED 06.04.2022 BEARING DIN AND NOTICE NO.ITBA/AST/S/148_1/2022- 23/1042594404(1) IN ANNEXURE-K ISSUED BY THE 1ST RESPONDENT AS UNLAWFUL AND ILLEGAL ALONG WITH ATTENDANT ACTIONS. B) QUASH BY AN ORDER, WRIT OR DIRECTION IN THE NATURE OF CERTIORARI THE ORDER PASSED U/S 148A (D) DATED 06.04.2022 BEARING DIN AND NOTICE NUMBER ITBA/AST/F/148A/2022-23/1042559519(1) IN ANNEXURE-J ISSUED BY THE 1ST RESPONDENT AS UNLAWFUL AND ILLEGAL ALONG WITH THE ATTENDANT ACTIONS AND ETC. THESE PETITIONS ARE COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: - 5 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 ORDER Heard the learned counsel for the petitioners and the learned counsel for the respondents. 02. The petitioner in W.P.No.202099/2022 is assailing the Annexure-D the order of assessment under Section 147 read with Sections 144 and 144 (b) of the Income Tax and also the demand notice dated 30.03.2022 marked at Annexure-D1. The petitioner has also sought to quash the further consequential orders at Annexure-U issued under Section 74 read with Section 271 (1) (c) of the Income Tax Act as well notice dated 30.03.2022 at Annexure-V and also the notice Annexure-W. 03. The petitioner in W.P.No.201988/2022 is questioning the order at Annexure-J dated 06.04.2022 which is issued under Section 148 of Income Tax Act. 04. The learned counsel for the petitioner would submit that the petitioner is a cooperative society registered under Karnataka Cooperative Societies Act. Earlier the petitioner had obtained a Permanent Account Number under the status of a - 6 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 firm. Since, the petitioner is a cooperative society, the petitioner society was required to obtain Permanent Account Number under the status of association of persons. After having realized this, the petitioner had applied for a Permanent Account Number under the status of association of persons and the same was granted to the petitioner way back in the year 2011. 05. The contention of the petitioner is that after new Permanent Account Number is assigned to the petitioner society, the petitioner society has submitted the income tax return under the said Permanent Account Number and all the transactions carried out by the petitioner society is duly reflected in the income tax returns filed under the new Permanent Account Number. 06. The respondents have sought for reassessment of the income of the petitioner’s society on the premise that the transactions are carried out by the petitioner’s society under Old Permanent Account Number, which was obtained in the name of the firm. Under these circumstances, the impugned order and notices have been passed by the respondents – authorities. - 7 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 07. The learned counsel for the petitioner would submit that after the Permanent Account Number was obtained under the status of association of persons, the petitioner’s society has given necessary intimation to the bankers, which maintain the account of the petitioner’s society. However, it appears that there was a lapse on the part of the banker in updating the account of the petitioner by reflecting the New Permanent Account Number. 08. Under these circumstances, it is the contention of the petitioner that the transaction though carried out under the New Permanent Account Number, the transaction might have been reflected under the Old Permanent Account Number on account of lapse on the part of the banker. It is further submitted that all transactions reflected in the old number in the name of the firm are reflected in the returns filed under New number. 09. The learned counsel for the respondents would submit that the opportunity was given to the petitioner to substantiate all its contentions by the assessing officer and assessing officer having considered the relevant materials on records, has rightly passed the impugned order. - 8 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 10. The learned counsel for the petitioner would further submit that he has got all the records to show that the all the transactions carried out by the petitioner subsequent to obtaining a New Permanent Account Number have been duly reflected in the returns submitted by the petitioner. 11. The learned counsel for the petitioner would also place reliance on the judgment of the High Court of Calcutta in MAT.No.1943/2022 with I.A.No.CAN 1 of 2022, in the case of Shree Ramkirshna Sishu Tirtha and another vs. Income Tax Officer, Ward 23 (1), Hooghly and others and in W.P.A.No.17644/2022 in the case of Shakuntala Sales Incorporation vs. Assistant Commissioner of Income Tax, Circle – 43/Circle-44, Kolkata and others, and would submit that the scope of remand is very much available in a matter like this. This Court has considered the above said two judgments having regard to the contentions raised before this Court. 12. This Court having regard to the fact narrated above, is of the view that it appears that the dispute has arisen on account of the confusion in respect of the Permanent Account - 9 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 Numbers, which was changed in the year 2011. For this reason, this Court deems it appropriate that the matter has to be re- considered by the assessing further by affording an opportunity to the petitioner to produce necessary document in support of its claim. 13. This Court also makes it clear nothing is expressed on the merits of the claim of either of the parties and for the purpose for affording an opportunity to the petitioner to substantiate its claim, the matter is remanded to the first respondents. For these reasons the impugned orders are set- aside. 14. Since, the petitioner and the respondents are before this Court, this Court deems it appropriate that the petitioner shall appear before the first respondent on 10.04.2023 without awaiting notice from the first respondent. 15. With the above observations, the writ petition is allowed. - 10 - WP No. 202099 of 2022 C/W WP No. 201988 of 2022 16. In view of disposal of main writ petitions, the pending I.As. do not survive for consideration, hence the same are also disposed of. Sd/- JUDGE KJJ LIST NO.: 1 SL NO.: 40 "