SMT. TEJAL MILAN PARIKH V. THE DEPUTY COMMISSIONER OF INCOME TAX

WP/26161/2023

AI Insights

The case involves multiple writ petitions filed by Smt. Tejal Milan Parikh, the legal heir of the late Milan M. Parikh, challenging ex-parte assessment orders issued under Section 153C read with Section 144 of the Income Tax Act, 1961. These orders were issued following a search operation related to another individual, Sri Nasiruddin P. Baghwan, which inadvertently included the premises of the deceased Milan M. Parikh. The petitioner argued that the assessments were conducted without her being brought on record as the legal heir, thus violating principles of natural justice. The court found merit in the petitioner's grievances, particularly the lack of opportunity given to the legal heir to contest the assessments, and quashed the orders, restoring the proceedings to an earlier stage.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 763610 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 21-12-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: R CHANDRASHEKAR; KASHINATH KALMATH
• Keywords: Ex parte assessment; Income tax assessment; Legal heir; Natural Justice; Search and seizure
• Section: 144; 142(1); 153C; 226; 227

Judgement Text

" - 1 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF DECEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 26161/2023 (T-IT) C/W WRIT PETITION NO. 26430/2023 (T-IT), WRIT PETITION NO. 26500/2023 (T-IT), WRIT PETITION NO. 26268/2023 (T-IT) IN WP NO. 26161/2023 BETWEEN: SMT. TEJAL MILAN PARIKH AGED ABOUT 43 YEARS, LEGAL HEIR OF LATE MILAN M PARIKH, RESIDING AT NO. 1081/31, 1ST FLOOR, GOLDEN BLOSSOM, 18TH A MAIN, 5TH BLOCK, RAJAJINAGAR, BANGALORE-560 010. …PETITIONER (BY SRI. R. CHANDRASHEKAR AND SRI. KASHINATH KALMATH, ADVOCATES FOR SRI. R. RAMA MURTHY., ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, SHARADHA BUILDING, SARAF COLONY, KHANAPUR ROAD, TILAKWADI, BELAGAVI-590 006. …RESPONDENT (BY SRI.M. DILIP., ADVOCATE) Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF EX-PARTY ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2018-19 ON 7.06.2021 U/S 153C RWS 144 OF THE ACT VIDE DIN ITBA/AST/S/153C/2021-22/1033302304(1) ANNX-D. IN WP NO. 26430/2023 BETWEEN: SMT. TEJAL MILAN PARIKH AGED ABOUT 43 YEARS, LEGAL HEIR OF LATE MILAN M PARIKH, RESIDING AT NO. 1081/31, 1ST FLOOR, GOLDEN BLOSSOM, 18TH A MAIN, 5TH BLOCK, RAJAJINAGAR, BANGALORE-560 010. …PETITIONER (BY SRI. R. CHANDRASHEKAR AND SRI. KASHINATH KALMATH, ADVOCATES FOR SRI. R. RAMA MURTHY., ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, SHARADHA BUILDING, SARAF COLONY, KHANAPUR ROAD, TILAKWADI, BELAGAVI-590 006. …RESPONDENT (BY SRI.M. DILIP., ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF EX-PARTY ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2017-18 ON 7.06.2021 U/S - 3 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 153C RWS 144 OF THE ACT VIDE DIN ITBA/AST/S/153C/2021-22/1033297967 (1) ANNX-E. IN WP NO. 26500/2023 BETWEEN: SMT. TEJAL MILAN PARIKH AGED ABOUT 43 YEARS, LEGAL HEIR OF LATE MILAN M PARIKH, RESIDING AT NO. 1081/31, 1ST FLOOR, GOLDEN BLOSSOM, 18TH A MAIN, 5TH BLOCK, RAJAJINAGAR, BANGALORE-560 010. …PETITIONER (BY SRI. R. CHANDRASHEKAR AND SRI. KASHINATH KALMATH, ADVOCATES FOR SRI. R. RAMA MURTHY., ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, SHARADHA BUILDING, SARAF COLONY, KHANAPUR ROAD, TILAKWADI, BELAGAVI-590 006. …RESPONDENT (BY SRI.M. DILIP., ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF EX-PARTY ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2016-17 ON 4.06.2021 U/S 153C RWS 144 OF THE ACT VIDE DIN ITBA/AST/S/153C/2021-22/1033281327 (1) ANNX-D. - 4 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 IN WP NO. 26268/2023 BETWEEN: SMT. TEJAL MILAN PARIKH AGED ABOUT 43 YEARS, LEGAL HEIR OF LATE MILAN M PARIKH, RESIDING AT NO. 1081/31, 1ST FLOOR, GOLDEN BLOSSOM, 18TH A MAIN, 5TH BLOCK, RAJAJINAGAR, BANGALORE-560 010. …PETITIONER (BY SRI. R. CHANDRASHEKAR AND SRI. KASHINATH KALMATH, ADVOCATES FOR SRI. R. RAMA MURTHY., ADVOCATE) AND: THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, SHARADHA BUILDING, SARAF COLONY, KHANAPUR ROAD, TILAKWADI, BELAGAVI-590 006. …RESPONDENT (BY SRI.M. DILIP., ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF EX-PARTY ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2014-15 ON 22.06.2021 U/S 153C RWS 144 OF THE ACT VIDE DIN ITBA/AST/S/153C/2021-22/1033600983 (1) ANNX-E. THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: - 5 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 ORDER These petitions are filed by Sri Milan M. Parikh’s wife as his Class – I legal heir. The petitioner has impugned the different assessment orders under Section 153C read with Section 144 of the Income Tax Act, 1961 [for short, ‘the IT Act’]. The details of the impugned Assessment Orders in these writ petitions are as follows: W.P.No.26161/2023 The ex-parte assessment order dated 07.06.2021 under Section 153C read with Section 144 of the IT Act vide DIN ITBA/AST/S/153C/2021- 22/1033302304(1) for the assessment year 2018-19 [Annexure-D]. W.P.No.26430/2023 The ex-parte assessment order dated 07.06.2021 under Section 153C read with Section 144 of the IT Act - 6 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 vide DIN ITBA/AST/S/153C/2021- 22/1033297967(1) for the assessment year 2017-18 [Annexure-E]. W.P.No.26500/2023 The ex-parte assessment order dated 04.06.2021 under Section 153C read with Section 144 of the IT Act vide DIN ITBA/AST/S/153C/2021- 22/1033281327(1) for the assessment year 2016-17 [Annexure-D]. 4) W.P.No.26268/2023 The ex-parte assessment order dated 22.06.2021 under Section 153C read with Section 144 of the IT Act vide DIN ITBA/AST/S/153C/2021- 22/1033600983(1) for the assessment year 2014-15 [Annexure-E]. - 7 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 2. It is undisputed that, on 28.04.2018, a search was conducted on Sri Nasiruddin P. Baghwan and notice under Section 153C of the IT Act is issued on Sri Milan N. Parikh on 09.02.2021. This notice is followed by the notice under Section 142(1) of the IT Act and the impugned ex-parte Assessment Orders under Section 144 of the IT Act on 15.03.2021, 04.06.2021/ 07.06.2021/ 22.06.2021 respectively. However, Sri Milan M. Parikh has died before completion of the assessment proceedings on 08.05.2021. The petitioner’s grievance essentially is because the assessment proceedings are completed without bringing the petitioner on record as the legal heirs of the deceased Milan M. Parikh and as such, the impugned Assessment Orders are in violation of the principles of natural justice. 3. Sri R. Chandrashekar, the learned counsel for the petitioner, and Sri M. Dilip, the - 8 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 learned counsel for the respondent, are heard for final disposal of the petition in the light of the aforesaid circumstances. Sri Chandrashekar, while reiterating the petitioner’s grievance in the light of the circumstances as aforesaid, also submits that the petitioner is entitled to dispute the very assumption of jurisdiction to issue notice under Section 153C of the IT Act because the petitioner is categorical that initiation of proceedings is not because of a search on Sri Milan M. Parikh. 4. In response, Sri M Dilip submits that his instructions are that there was no search on Sri.Milan M. Parikh, but Sri Milan M. Parikh’s premise was also searched as part of search on Sri.Nasiruddin P. Baghwan, and therefore, issuance of notice under Section 153C of the IT Act to assume jurisdiction for the assessment is justified. Sri. M. Dilip also submits that this aspect could be left open - 9 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 to be considered with due opportunity to the petitioner as the respondent cannot controvert that the assessment proceedings are completed without the petitioner being brought on record upon the demise of Sri Milan M. Parikh on 08.05.2021. In the light of these submissions, the following: ORDER a) The petitions are allowed in part and the impugned Assessment Orders are quashed. b) The proceedings are restored to the stage of the notice under Section 142(1) of the IT Act with liberty to the petitioner to file appropriate reply with necessary documents. c) The petitioner shall be at liberty to file their reply with necessary documents - 10 - NC: 2023:KHC:46748 WP No. 26161/ 2023 C/W WP No. 26430/2023, WP No. 26500/2023, WP No. 26268/2023 with the respondent on or before 29.02.2024. Sd/- JUDGE SA ct:sr "