Sri Jay Jayaram V. The Income-Tax Officer, Ward 1(2)(1)

WP/3484/2024

AI Insights

The case involves Sri Jay Jayaram, the petitioner, challenging the notice and subsequent ex-parte assessment order issued by the Income-Tax Officer for the assessment year 2015-16. The petitioner argued that the notice was issued without proper jurisdiction and was contrary to the amended provisions of the Income Tax Act, 1961, which came into effect on April 1, 2021. The respondent failed to provide evidence that the notice was issued before the amendments, leading to the petitioner's claim of violation of natural justice and procedural irregularities. The court's decision focused on the incorrect application of the law and the lack of proper procedural adherence by the respondent.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 797820 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-02-2024
• Assessment Year: misc
• Other Referred Cases: Union of India Vs. Ashish Agarwal \\u2013 (2022) 138 Taxmann.com 64 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: S PARTHASARATHI
• Keywords: Ex-parte assessment order; Jurisdiction; Limitation; Natural Justice; Notice Quashing; Writ of Certiorari; Writ of Mandamus; Writ of prohibition
• Section: 147; 148; 144; 149; 148A(b); 156

Judgement Text

" - 1 - NC: 2024:KHC:7159 WP No. 3484 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.3484 OF 2024 (T-IT) BETWEEN: SRI JAY JAYARAM, AGED 74 YEARS, SON OF SRI JAYASURYA RESIDING AT NO.709, 1ST MAIN ROAD, INDIRANAGAR 1ST STAGE, BENGALURU-560 038. …PETITIONER (BY SRI. S PARTHASARATHI, ADVOCATE) AND: THE INCOME-TAX OFFICER, WARD 1(2)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB VILLAGE, KORAMANGALA, BENGALURU-560095. …RESPONDENT (BY SRI. M. DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT DATED 31.03.2021 BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2015-16 IN FILE DIN AND NOTICE NO. ITBA/AST/S/148/2020-21/1032057359(1) FOR THE ASSESSMENT YEAR 2016-17 (ANNEXURE-D). THIS PETITION, COMING ON FOR PRELIMINARY HEARING B-GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by VANDANA S Location: High Court of Karnataka - 2 - NC: 2024:KHC:7159 WP No. 3484 of 2024 ORDER In this petition, petitioner seeks for the following reliefs: “a) Issue a Writ of Certiorari or a direction in the nature of Writ of certiorari, quashing the notice issued under Section 148 of the Act dated 31.03.2021 by the respondent for the assessment year 2015-16 in file DIN and Notice No. ITBA/AST/S/148/2020-21/1032057359(1) for the assessment year 2015-16 (ANNEXURE-D); b) Issue a Writ of certiorari or a direction in the nature of Writ of Certiorari, quashing the ex-parte assessment order dated:27.12.2022 passed under Section 147 rws 144 of the Act for the assessment year 2015-16 by the Respondent in file DIN & Order No.ITBA/AST/S/147/2022-23/ 1048252968(1) (ANNEXURE-A) as also the demand notice issued under Section 156 of the Act for the assessment year 2015-16 in file DIN & Notice No:ITBA/AST/S/156/2022- 23/1048252973(1) (ANNEXURE-A1); c) Issue a Writ of Prohibition or a direction in the nature of Writ of Prohibition, restraining the Respondent from proceeding further in the matter of recovery of demand in pursuance of the ex-parte assessment order dated: 27.12.2022 passed under Section 147 rws 144 of the Act for the assessment year 2015-16 and the demand notice dated: 27.12.2022 (Annexure-A & A1) respectively); and also the respondent should be restrained from taking any further proceedings in consequence of ex-parte order which is - 3 - NC: 2024:KHC:7159 WP No. 3484 of 2024 enclosed as Annexure-A along with the demand notice Annexure-‘A1’; d) Alternatively, issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus directing the Respondent to provide adequate opportunity to the Petitioner to respond to the notices and also the show cause notice and to direct the Respondent to pass an order of assessment thereafter; e) Pass such other order, direction or writ as this Hon’ble Court deems fit, and f) direct the Respondent to award the costs of this Writ Petition. 2. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record. 3. In addition to re-iterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the impugned ex-parte assessment order vide Annexure-A dated 27.12.2022 and subsequent orders, notices etc., deserve to be set aside for the following reasons:- (i) The respondent is purported / alleged to have issued a Notice on 31.03.2021 under Section 148 of the Income Tax Act, 1961 (for short ‘the I.T.Act’) prior to the amendments that came into - 4 - NC: 2024:KHC:7159 WP No. 3484 of 2024 force w.e.f. 01.04.2021; however, the respondent has not placed any material to establish that the said Notice was issued on 31.03.2021 and consequently, the said Notice issued after 01.04.2021 was illegal and arbitrary and deserves to be quashed. (ii) The alleged Notice dated 31.03.2021 issued after 01.04.2021 and the impugned assessment order pursuant thereto are without jurisdiction or authority of law and contrary to the provisions of Sections 147 to 149 of the I.T.Act after amendment w.e.f. 01.04.2021. (iii) Even as stated in the impugned order, the Notice purported / alleged to have been issued on 31.03.2021 was served upon the petitioner subsequent to 01.04.2021 after the amendments came into force which is yet another circumstance that would vitiate the impugned order. (iv) The impugned Notice, assessment order etc., are barred by limitation in view of the amended provisions of Sections 147 to 149 of the I.T.Act and the same deserve to be quashed on this ground also. (v) The impugned Notices, orders, proceedings etc., are contrary to the judgment of the Apex Court in the case of Union of - 5 - NC: 2024:KHC:7159 WP No. 3484 of 2024 India Vs. Ashish Agarwal – (2022) 138 Taxmann.com 64 (SC) and the same deserves to be quashed. (vi) The impugned Notice alleged to have been issued on 31.03.2021 was never served upon the petitioner who was not aware of the proceedings which are violative of principles of natural justice and the impugned order deserves to be quashed on this score also. 4. Per contra, learned counsel for the respondent – Revenue submits that there is no merit in the petitioner and that the same is liable to be dismissed. 5. A perusal of the material on record will indicate that though several contentions have been urged by both sides in support of their respective claims, a perusal of the impugned order will indicate that no material is placed by the respondent to establish that the Notice under Section 148 was issued on 31.03.2021 as alleged by the respondent; in fact, the impugned order itself records that the Notice was served subsequent to 01.04.2021 when the amendment to Sections 147 to 149 of the I.T.Act had come into force. Under these circumstances, in the absence of any material to establish that the Notice under Section - 6 - NC: 2024:KHC:7159 WP No. 3484 of 2024 148 of the I.T.Act (prior to amendment) was actually issued on 31.03.2021 before the amendment came into force on 01.04.2021, I am of the considered opinion that in the light of the amended provisions and the judgment of the Apex Court Ashish Agarwal’s case supra, the impugned orders and subsequent notices etc., deserve to be set aside by treating the impugned notice dated 31.03.2021 issued under Section 148 (Before amendment) as a Notice under Section 148A(b) (After amendment) and by providing an opportunity to the petitioner to file objections to the said Notice and with a direction to the respondent to provide sufficient and reasonable opportunity to the petitioner and hear him and proceed further in accordance with law. 6. In the result, I pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned order at Annexure – A dated 27.12.2022 and the impugned Notice at Annexure – A1 dated 27.12.2022 and all consequential proceedings, orders, notices, etc., are hereby set aside. - 7 - NC: 2024:KHC:7159 WP No. 3484 of 2024 (iii) The impugned Notice at Annexure-D dated 31.03.2021 is directed to be treated as a Notice under Section 148A(b) of the I.T.Act issued by the respondent to the petitioner. (iv) Liberty is reserved in favour of the petitioner to file objections, reply, response etc., along with documents to the aforesaid Section 148A(b) Notice and urge / take up all contentions including limitation, jurisdiction, maintainability etc., which shall be considered by the respondent, who shall proceed further in accordance with law, bearing in mind the judgment of the Apex Court in the case of Union of India Vs. Ashish Agarwal – (2022) 138 Taxmann.com 64 (SC). (v) In addition thereto, the petitioner would be entitled to file other objections, replies, pleadings, documents etc., and contest the proceedings in accordance with law. (vi) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. Sd/- JUDGE DHA / SRL List No.: 1 Sl No.: 43.2 "