Sri Gubbi Chidananda Jagadeesh V. National Faceless Assessment Centre and Income Tax Officer Ward No.1 and TPS

WP/8213/2023

AI Insights

The case involves Sri Gubbi Chidananda Jagadeesh, the petitioner, who challenged various orders related to income tax assessments for the year 2015-16. The petitioner contested the assessment order, computation sheet, demand notice, and penalty notices issued by the National Faceless Assessment Centre and the Income Tax Officer, citing a lack of due opportunity to respond and participate in the assessment process. The petitioner argued that he had not received adequate notice or opportunity for a personal hearing, particularly under the provisions of Section 144B of the IT Act, which mandates such opportunities. The respondents contended that the petitioner had not responded to initial notices, leading to the completion of the adjudication and assessment processes. The court found that the petitioner had not been given a proper opportunity to contest the assessments and thus quashed the orders and restored the proceedings for further consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 688378 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 02-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: ANNAMALAI
• Keywords: Assessment Order; Income Tax; Personal hearing; Show cause notice; Lack of due opportunity
• Section: 147; 148; 144; 142(1); 144B; 148A(b); 148A(d); 226; 227

Judgement Text

" - 1 - NC: 2023:KHC:38975 WP No. 8213 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 8213 OF 2023 (T-RES) BETWEEN: SRI GUBBI CHIDANANDA JAGADEESH S/O LATE SRI G B CHIDANANDA AGED ABOUT 66 YEARS PRESENTLY R/A CHANNABASAVESHWARA SWAMY NILAYA VIDHYANAGARA 2ND CROSS TUMKUR, KUVEMPUNAGARA TUMKUR-572103. …PETITIONER (BY SRI. ANNAMALAI S.,ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE REP BY ADDITIONAL/JOINT/DEPUTY ASSISTANT COMMISSIONER OF INCOME TAX/ INCME TAX OFFICER INCOME TAX DEPARTMENT MINISTRY OF FINANCE ROOM NO.401, 2ND FLOOR, E RAMP JAWAHARLAL NEHRU STADIUM DELHI-110003. 2. THE INCOME TAX OFFICR WARD NO.1 AND TPS AAYAKAR BHAVAN Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:38975 WP No. 8213 of 2023 RAMAKRISHNAGAR KUNIGAL ROAD RAMAKRISHNA NAGAR TUMKUR-572103. …RESPONDENTS (BY SRI.M. DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER PASSED UNDER SECTION 147 RWS 144 RWS 144B OF THE ACT DATED 13/03/2023 BEARING DIN NO. ITBA/AST/S/147/2022- 23/1050660715(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A1; QUASH THE COMPUTATION SHEET DATED 13/03/2023 BEARING DIN AND DOCUMENT NO. ITBA/AST/S/114/2022- 23/1050660760(1)16.03.2023 PASSED BY FIRST RESPONDENT BEARING DIN NO.20230357YU0000666B55 FOR PERIODS 2015-16 AND 2016-17 (APRIL 2017 TO JUNE 2017) (PRODUCED AS ANEXURE-R). ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A2. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - NC: 2023:KHC:38975 WP No. 8213 of 2023 ORDER The petitioner has impugned the assessment order dated 13.03.2023 under Section 147 read with Sections 144 and 144B of the Income Tax Act, 1961 [for short, the ‘IT Act’] as per Annexure - A.1, the Computation Sheet dated 13.03.2023 as per Annexure A.2, the Demand Notice dated 13.03.2023 as per Annexure A.3 and the Penalty Notices dated 13.03.2023 as per Annexures - A.4, A.5 and A.6. 2. The petitioner, apart from these, has also impugned the adjudication order under Section 148A[d] of the IT Act dated 28.03.2022 as per Annexure – B.2 and the consequential Notice dated 31.03.2022 under Section 148 of the IT Act as per Annexure - B.3. The petitioner has impugned the assessment order dated 13.03.2023 and the adjudication order dated 28.03.2022 under Section 148A[d], and the consequential proceedings essentially on ground of lack of due opportunity. - 4 - NC: 2023:KHC:38975 WP No. 8213 of 2023 3. The second respondent has issued notice under Section 148A[b] on 17.03.2022 putting the petitioner on notice that he has not filed the ITR for the assessment year 2015-16 despite having income chargeable to tax, and insofar as the income not offered to tax, the second respondent has referred to certain TDS effected on the purchase of immovable property and deposit with the Post Office exceeding Rs.50,000/-. The petitioner has not responded to this notice and the adjudication is completed under Section 148A[d]. 4. When the show-cause notice under Section 142[1] of the IT Act is issued after the adjudication order dated 28.03.2022, the petitioner has requested for details of the transactions and an opportunity of personal hearing asserting that he is 66 years old and not familiar with the use of mobile or emails. The petitioner’s response is as under: - 5 - NC: 2023:KHC:38975 WP No. 8213 of 2023 “With regard to the variations as mentioned in the show cause notice, I would like to bring to your kind notice that the transactions mentioned by you are 8 years old and to the best of memory I have not made any such transactions with regard to payment to purchase of immoveable property, insurance Premium and Post Office Deposits to the tune of Rs.88,71,080/-. Please provide the details of transactions like Property Details, Date of transaction, seller details, Insurance Policy details and Post Office details, Date of such transactions, I will look into the same and try to recollect based on the details provided to me, I will be able to furnish the requisite details. In view of the above, I being a senior citizen humbly request your good selves to kindly transfer the case to the Tumakuru ITO if possible which will provide me another opportunity by providing the details and also further request to provide me a Video Conferencing Opportunity.” If the adjudication order dated 28.03.2022 under Section 148A[d] is concluded on the basis that there is no response, the assessment order is completed - 6 - NC: 2023:KHC:38975 WP No. 8213 of 2023 recording that the petitioner has failed to support documentary evidence regarding the purchase of immovable property and the post office deposit. 5. Sri S. Annamalai, the learned counsel for the petitioner, is categorical that the petitioner has not purchased any immovable property nor received the advantage of post office deposits during the assessment year 2015-16; that therefore, the petitioner has requested the details based on which the notice is issued under Section148A[b] of the IT Act, but the first respondent, without sharing such information, has proceeded to pass the impugned assessment order. 6. Sri M. Dilip submits that the petitioner has not responded to the notice issued under Section 148A[b] of the IT Act and as such, the second respondent has passed the adjudication order dated 28.03.2022 under Section 148A[d] of the IT Act, and insofar as the first respondent’s impugned - 7 - NC: 2023:KHC:38975 WP No. 8213 of 2023 assessment order, Sri M. Dilip cannot contest that despite specific request for personal hearing as contemplated under Section 144B(6)(vii) & (viii] of the IT Act, the opportunity of hearing is not extended. However, Sri M. Dilip reiterates that if the petitioner wanted details to respond to the notice under Section 148A[b] of the IT Act, he should have asked for such information on receipt of such notice. 7. This Court must firstly observe that the petitioner is categorical that he has not participated in any sale transaction or availed the benefit of the deposit with the Post Office in the subject assessment year to be served with notice under Section 148A[b] of the IT Act. Secondly, the petitioner asserts that because of his peculiar circumstances he had no knowledge of the notice and as such, he has not filed any response to the notice issued under Section 148A[b]. Thirdly, when a show cause notice under Section 142[1] of the IT Act is issued, the petitioner - 8 - NC: 2023:KHC:38975 WP No. 8213 of 2023 has responded asking for details and an opportunity of hearing. This Court must further observe that the necessary details will be provided when notice under Section 148A[b] of the IT Act is issued, but the notice under Section148A[b] of the IT Act in the present case does not contain all the necessary details, and it could be that such information could not be sought for at the stage of Section 144B of the IT Act but an opportunity of hearing is contemplated at this stage under these provisions. 8. The petitioner has not received the notice under Section 148A[b] of the IT Act and an opportunity of personal hearing is not extended before the impugned assessment order, and therefore, this Court must opine that there is a definite lack of opportunity and failure to comply with the requirements of putting the assessee on notice for reasons to commence proceedings under Section 148 of the IT Act. As such, there must be interference - 9 - NC: 2023:KHC:38975 WP No. 8213 of 2023 quashing the assessment order dated 13.03.2023 and the adjudication order dated 28.03.2022 under Section 148A[d] of the IT Act and restoring the proceedings to the stage where the petitioner could show cause against adjudication under Section 148A[d] of the IT Act. Further, the second respondent must be called upon to furnish to the petitioner information such as the details of the sale deed and the deposits with the postal department upon receipt of a certified copy of this order with due opportunity to the petitioner to file a response. In the light of the above, the following ORDER [A] The petition is allowed in part. The impugned assessment order dated 13.03.2023 and the consequential computation, demand and penalty notices are quashed. The adjudication order dated 28.03.2022 under Section 148A[d] of the IT Act is also quashed and the proceedings restored for reconsideration. - 10 - NC: 2023:KHC:38975 WP No. 8213 of 2023 [B] The second respondent shall furnish the reasons recorded for initiation of proceedings under Section 148 of the IT Act before proceeding further consequent to this order and it would be needless to observe that the petitioner will be at liberty to file response, if any, upon receipt of such information within such time as may be reasonably allowed in the light of the statutory provisions. Sd/- JUDGE nv "