Sri. Muniyappa Jayakumar V. Assessment Unit Income Tax Department, National Faceless Assessment Centre and The Income Tax Officer Ward 4(1)(3), Bangalore and The Principal Chief Commissioner of Income-Tax, Karnataka and Goa

WP/19399/2024

AI Insights

The writ petition filed by Sri. Muniyappa Jayakumar challenged several orders and notices issued by the Income Tax Department for the assessment year 2016-17. The petitioner argued that he did not receive proper notice regarding the assessment proceedings, as the notices were sent to outdated email addresses. Consequently, the assessment was conducted ex-parte, treating all cash deposits as unexplained money under Section 69A of the Income Tax Act. The court found that the procedural requirements for notice were not adequately met, leading to the decision to set aside the assessment orders and remit the case for further proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 818184 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-07-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: ANNAMALAI
• Keywords: Assessment Order; Best Judgment Assessment; Ex parte assessment; Income Tax; Unexplained money; Writ petition
• Section: 147; 148; 144; 69A; 144B; 148A(b); 226; 227; 148 A (d)

Judgement Text

" - 1 - NC: 2024:KHC:29337 WP No. 19399 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 19399 OF 2024 (T-IT) BETWEEN: SRI. MUNIYAPPA JAYAKUMAR S/O MUNIYAPPA, AGED ABOUT 43 YEARS, NO.140/1, OLD NO.32 SAMPANGAMMA HOUSE, BELLANDUR POST, KARIYAMMANA AGRAHARA, BENGALURU-560103 …PETITIONER (BY SRI.ANNAMALAI.S., ADVOCATE) AND: 1. ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, REP BY ADDTIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME-TAX/ INCOME-TAX OFFICER MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM DELHI-110003 2. THE INCOME TAX OFFICER WARD 4(1)(3), BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU 560095 3. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME-TAX, KARNATAKA AND GOA, C R BUILDING, NO.1, Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:29337 WP No. 19399 of 2024 QUEENS ROAD, BENGALURU 560001 …RESPONDENTS (BY SRI.E.I.SANMATHI., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER PASSED UNDER SECTION 147 R.W.S 144 R.W.S 144B OF THE ACT DATED 02.02.2024 BEARING DIN NO.ITBA/AST/S/147/2023-24/1060450554(1) FOR THE ASSESSMENT YEAR 2016-17 BY THE R-1 HEREIN MARKED AS ANNXURE-A1; QUASH THE COMPUTATION SHEET DATED 02.02.2024 BEARING DIN AND DOCUMENT NO.ITBA/AST/S/117/2023- 24/1060450661(1) FOR THE ASSESSMENT YEAR 2016-17 ISSUED BY THE R-1 HEREIN MARKED AS ANNXURE-A2; AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER Learned counsel Sri.E.I.Sanmathi accepts notice for respondents. 2. The petitioner has sought for setting aside the assessment order at Annexure-A1 as well as notice of demand at Annexure-A3; penalty order at Annexure-A4; notice of demand at Annexure-A6; penalty order at Annexure-A7; notice of demand at Annexure-A9; penalty notice at Annexure-A10; notice under Section 148A(b) of the Income Tax Act, 1961 at Annexure-B1; order under - 3 - NC: 2024:KHC:29337 WP No. 19399 of 2024 Section 148(A)(d) at Annexure-B2 as well as notice under Section 148 of the Act at Annexure-B3. 3. It is the case of the petitioner that there was no notice from the inception of proceedings in terms of Section 148(A)(b) notice. It is submitted that the petitioner had previously filed return of income for the assessment year 2014-15 and the present proceedings relate to the assessment year 2016-17 and notice was sent to the e-mail ID of the previous tax consultant who was not a tax consultant as regards subsequent years. It is further submitted that notice was also sent through e- mail to an e-mail ID of the petitioner, which was not in use. It is submitted that as the petitioner was an agriculturist, except for the assessment year 2014-15, no returns were filed subsequently. It is noticed that the Assessing Authority has passed an order on the basis of Best Judgment assessment, in light of the petitioner not having participated in the proceedings. While completing the ex-parte assessment, entire cash deposits is treated as - 4 - NC: 2024:KHC:29337 WP No. 19399 of 2024 unexplained money in terms of Section 69A of the Income Tax Act and consequent penalty proceedings were initiated. Learned counsel for the petitioner submits that in light of non-service due to non-communication to the petitioner, if the petitioner were to given an opportunity, he would give his explanation insofar as cash deposits which were treated as unexplained money. Even as regards purchase of immovable property, necessary explanation would be made out before the Authorities. Learned counsel for the petitioner further submits that he would be in a position to explain the source of cash deposits. 4. Taking note that the assessment order passed is ex- parte and treating the cash deposits as unexplained money, it would be appropriate to allow the petitioner an opportunity to substantiate his case insofar as such unexplained investments. 5. Accordingly, the orders at Annexures-A1 to A10 are set aside as also Annexures-B2 and B3. - 5 - NC: 2024:KHC:29337 WP No. 19399 of 2024 The matter is remitted to the stage of reply to 148A(b) notice dated 18.02.2023. All contentions are kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE MPK List No.: 2 Sl No.: 7 "