SRI AROON RAMAN V. UNION OF INDIA

WP/13326/2014

AI Insights

The case involves Sri Aroon Raman, the petitioner, challenging a communication from the Deputy Commissioner of Income Tax, Mysore, which rejected his objections to the issuance of a notice under Section 148 of the Income Tax Act, 1961. The petitioner argued that the initiation of proceedings under Section 148 was not sustainable without a prior notice under Section 143(2), which is required for a regular assessment procedure. The court referenced the Supreme Court's judgment in Hotel Blue Moon, which supports the necessity of issuing a notice under Section 143(2) when income has escaped assessment. The Revenue did not dispute this legal position. Consequently, the court set aside the communication that contradicted this established legal requirement.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 740801 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-03-2021
• Assessment Year: misc
• Other Referred Cases: Assistant Commissioner of Income-Tax v. Hotel Blue Moon (2010) 321 ITR 362 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN J NEERALGI
• Assessee Lawyers: S S NAGANAND
• Keywords: Assessment; Income Tax; Notice; Undisclosed income; Writ petition
• Section: 148; 143(2); 143(1); 226; 227

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF MARCH 2021 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.13326/2014 (T-IT) BETWEEN: Sri Aroon Raman, S/o V. Raman, Aged about 53 years, Residing at No.100, Paramahamsa Road, Yadavagiri, Mysore - 570 020. … Petitioner (By Sri S.S. Naganand, Senior Advocate for Sri Prashanth Murthy, Advocate) AND: 1. Union of India, Department of Revenue, Ministry of Finance, Government of India, North Block, New Delhi - 110 00 Through the Secretary. 2. The Deputy Commissioner of Income Tax, Circle - 1(2), No.55/1, 2nd Floor, 'Shilpashree', Opp. Sterling Talkies, Vishweshwaranagar, Mysore - 570 008. … Respondents (By Sri Jeevan J. Neeralgi, Advocate) 2 This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to quash communication dated 10.03.2014 vide Annexure-Y issued by the R-2 and etc. This Writ Petition coming on for orders this day, the Court made the following: ORDER The petitioner has called into question the communication at Annexure-Y dated 10.03.2014 whereby the objections of petitioner relating to the issuance of notice under Section 148 of the Income Tax Act, 1961 ('I.T. Act' for brevity) on the ground that no notice issued under Section 143(2) of I.T. Act has been rejected. 2. Sri S.S.Naganand, learned Senior Counsel appearing for Sri Prashanth Murthy for the petitioner would submit that the initiation of proceedings under Section 148 is not sustainable and draws attention to the intimation under Section 143(1) of I.T. Act as made at an earlier point of time as regards to the Assessment Year 2007-2008. 3. It is further submitted that the question of initiating proceedings under Section 148 is not sustainable and that notice under Section 143(2) is required to have 3 been issued so also the procedure of regular assessment ought to have been followed insofar as the Department seeks to treat the income which the petitioner has not made subject matter for assessment as one which is undisclosed income. 4. Insofar as the requirement of issuance of notice under Section 143(2) of I.T. Act, the attention is drawn to the judgment of Apex Court in the case of Assistant Commissioner of Income-Tax v. Hotel Blue Moon reported in (2010) 321 ITR 362 (SC) and it is pointed out that in case of income escaped from assessment, the procedure, including notice under Section 143(2) of I.T. Act ought to have been issued. 5. Learned counsel appearing for the Revenue does not dispute the position as regards to the law laid down by the Apex Court in the case of Hotel Blue Moon (supra). 6. Without adverting to the other facts in issue while noting that the time prescribed under the Proviso to 4 Section 143(2) of I.T.Act being mandatory and noticing that admittedly, as per the communication at Annexure-Y dated 10.03.2014, the Authority has taken a stand that notice under Section 143(2) of I.T. Act is not required, the same being contrary to the judgment of Apex Court in the case of Hotel Blue Moon (supra), the communication at Annexure-Y dated 10.03.2014 is set aside. The petition is disposed off accordingly. Sd/- JUDGE VGR "