Sri Hearuru Venkataiah Dasegowda V. Assessing Officer National E Assessment Centre and Income Tax Officer Ward -1(2) (1) and Principal Commissioner of Income Tax -1

WP/433/2023

AI Insights

The case involves Sri Hearuru Venkataiah Dasegowda, the petitioner, who challenged the assessment and subsequent orders related to the assessment year 2019-20 under various sections of the Income Tax Act. The petitioner, after receiving arrears of salary and filing for relief under Section 89(1) of the IT Act, was initially granted a refund but later faced a substantial tax liability as per the assessment order dated 23.09.2021. The petitioner argued that he was not given a proper opportunity to respond to the notices due to his relocation post-retirement, which the court found valid, leading to the quashing of the assessment and related orders.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 808579 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-01-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: M V SHESHACHALA; ARAVIND CHAVAN
• Keywords: Assessment Order; Exemption; Income Tax; Penalty order; Reassessment; Rectification Order; Writ petition
• Section: 144; 154; 143(1); 234D; 270A; 151; 144B; 272A(1)(d); 156; 227

Judgement Text

" - 1 - WP No. 433 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JANUARY, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 433 OF 2023 (T-IT) BETWEEN: SRI HEARURU VENKATAIAH DASEGOWDA S/O LATE VENKATAIAH, AGED ABOUT 63 YEARS, R/AT NO. 260/12, 14B CROSS, M.S BUILDING PWD QUARTERS, YELAHANKA POST OFFICE, YELAHANKA NEW TOWN, BANGALORE 560065. …PETITIONER (BY SRI. M.V. SESHACHALA.S., ADVOCATE FOR SRI. ARAVIND V CHAVAN.,ADVOCATE) AND: 1. ASSESSING OFFICER NATIONAL E ASSESSMENT CENTRE, NO. 412-413, 1st FLOOR, OPP METRO PILLAR NO. 793 DWARAKA MOR NEW DELHI 110059. 2. INCOME TAX OFFICER WARD -1(2) (1) BMTC BUILDING, 80 FEET ROAD, KORAMANGALA Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - WP No. 433 of 2023 BENGALURU 560095. 3. PRINCIPAL COMMISSIONER OF INCOME TAX -1 BMTC BUILDING, 80 FEET ROAD, KORAMANGALA 81, BANGALORE 560095. …RESPONDENTS (BY SRI.E.I. SANMATHI., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED U/S 154 OF THE IT ACT DATED 30.12.2022 BEARING NO. ITBA/REC/S/154- 1/2022-23/1048349210(1) ANNEXURE-M1 AND DEMAND NOTICE U/S 156 OF THE IT ACT DATED 30.12.2022 BEARING NO.ITBA/REC/S/156-1/2022- 23/1048349530(1) ANNEXURE- M2, BOTH ORDERS PASSED BY R2 FOR ASSESSMENT YEAR 2019-20. QUASH THE PENALTY ORDER U/S 270A OF THE IT ACT DATED 01.02.2022 BEARING NO. ITBA/PNL/F/270A/2021-22/1039249823(1) ANNEXURE- J2 AND ORDER U/S 272A(1)(D) OF THE IT ACT DATED 05.01.2022 BEARING NO. ITBA/PNL/F/272A(1)(D) /2021-22/1038462931(1) ANNEXURE- K3 BOTH ORDERS PASSED BY R1 FOR ASSESSMENT YEAR 2019- 20. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner is aggrieved by the Assessment Order dated 23.09.2021 [Annexure-H1] under Section 144 read with Section 144B of the Income Tax Act - 3 - WP No. 433 of 2023 1961 (for short, ‘the IT Act’), the subsequent rectification order dated 30.12.2022 [Annexure-M1] under Section 154 read with Section 144 of the IT Act and the penalty order dated 01.02.2022 [Annexure- J2] under Section 270A of the IT Act as also the order dated 05.01.2022 [Annexure-K3] under Section 272A(1)(d) of the IT Act. Sri M.V. Sheshachala, the learned Senior Counsel for the petitioner, and Sri.E.I.Sanmathi, the learned counsel for the respondents, are heard for final disposal. 2. Sri M.V. Sheshachala submits that during the assessment year 2019-20, the petitioner, who has now retired from service, has received certain arrears of salary and being entitled to the relief under Section 89 (1) of the IT Act read with Rule 21AA of the IT Rules has filed request in prescribed Form 10E. The petitioner is issued with intimation under Section 151 of the IT Act on 29.04.2020 that he would be eligible for refund, and he is accordingly granted the - 4 - WP No. 433 of 2023 refund as well. Notwithstanding the aforesaid circumstances, the assessment order is passed on 23.09.2021 holding that net tax liability would be in sum of Rs.24,77,674/-. 3. Sri M.V. Sheshachala emphasizes that the assessment order dated 23.09.2021 records that notice under Section 142(1) is issued during the months between May 2021 and September 2021 and notice of the draft assessment order is also issued in the month of September 2021, but the petitioner on his retirement has settled in his native village and there is no internet access and as such he has not availed opportunity to demonstrate that there cannot be any fresh liability in the light of the order under Section 143 (1) of the IT Act on 29.04.2020. The impugned rectification order is also issued in the premise that there is no response from the petitioner and by this rectification, interest under Section 234D of the IT Act is charged. Sri E.I.Sanmathi, the learned - 5 - WP No. 433 of 2023 counsel for the respondents, submits that the petitioner, who cannot dispute that the notices have been issued as aforesaid between the months May 2021 and September 2021, cannot deny opportunity of hearing. 4. However, what remains salient is that the assessment order dated 23.09.2021 does not consider the petitioner’s case that with the exemption granted under Section 89(1) of the IT Act, there cannot be any reassessment. There could also be some force in the submissions by Sri M.V. Sheshachala that the data as regards filing of the necessary details in the prescribed form and the order on exemption under Section 89 of the IT Act should necessarily be available with the authorities and the assessment should have been considered only in the backdrop of those materials. - 6 - WP No. 433 of 2023 5. Further, there is nothing on record to indicate that the petitioner is malafide or has generated a ruse to contend that he could not be informed of the notices because he, after superannuation, has relocated to native village. In the peculiar circumstances of the case, this Court is of the considered opinion that the question of reassessment must be reconsidered after opportunity to the petitioner. If the assessment order dated 23.09.2021 [Annexure-H1] is quashed, the other orders dated 05.01.2022 and 01.02.2022 and [Annexures- K3 and J2] must also yield. 6. As such, the petition is allowed, and the impugned assessment order dated 23.09.2021 [Annexure-H1] and rectification order dated 30.12.2022 [Annexure-M1] are quashed restoring the assessment order for reconsideration in the light of the exemption granted under Section 143(1) of the IT Act by order dated 29.04.2020 [Annexure-F]. - 7 - WP No. 433 of 2023 Consequently, the other orders dated 05.01.2022 and 01.02.2022 [Annexures- K3 and J2] are also quashed. SD/- JUDGE SA ct:sr "