SRI NARAYAN REDDY JAGADISH V. THE INCOME TAX OFFICER

WP/191/2025

AI Insights

The case involves Sri. Narayan Reddy Jagadish, the petitioner, who contested the income tax assessment related to the sale of a joint family property. The property was sold by the petitioner's mother, brother, sister, and himself, each holding an equal share. The Income Tax Department issued notices under Section 148A(b) of the Income Tax Act, 1961, leading to an ex-parte assessment order that included the entire sale consideration as income for the petitioner. The petitioner argued that he was not given an opportunity to file objections or explain the circumstances of the property sale, which was a joint family asset. The respondents contended that the petitioner had received the notices and failed to respond. The High Court of Karnataka, after hearing both parties, decided to remand the case back to the Assessing Authority, allowing the petitioner to present his objections and clarify his share in the property sale.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 756314 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 15-01-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI; M DILIP
• Assessee Lawyers: RAVI S V
• Keywords: Assessment Order; Ex-parte; Income Tax; Joint family property; Sale Consideration; Writ petition
• Section: 148A(b)

Judgement Text

" - 1 - NC: 2025:KHC:1474 WP No. 191 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO.191 OF 2025 (T-IT) BETWEEN: SRI. NARAYAN REDDY JAGADISH, AGED ABOUT 54 YEARS, NO. 25/1, VENKATADRI NILAYA, HALANAYAKANAHALLI, CLM POST, SARJAPURA ROAD, BANGALORE 560 035, PAN AUEPJ3971D PREVIOUSLY AT: NO.17/1, SATHIYASADANA COMPLEX, SARJAPUR ROAD, BELLANDUR GATE, BANGALORE 5601 02 …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE) AND: 1. THE INCOME TAX OFFICER, WARD - 4(3)(3), BANGALORE 560 095. 2. THE INCOME TAX OFFICER, WARD- 5(3)(2), BANGALORE 560 032 3. NATIONAL FACELESS ASSESSMENT CENTRE, REPRESENTED BY ADDITIONAL / JOINT / DEPUTY / Digitally signed by KAVYA R Location: High Court of Karnataka - 2 - NC: 2025:KHC:1474 WP No. 191 of 2025 ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI 110 003. 4. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, THE OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, C.R. BUILDING, QUEENS ROAD, BANGALORE 560 001 …RESPONDENTS (BY SRI. E.I. SANMATHI AND SRI. M. DILIP, ADVOCATES) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE UNDER SECTION 148A(b) OF THE ACT DATED. 17.03.2022 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2021- 22/1040971575(1) ISSUED BY THE R-2 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT - 3 - NC: 2025:KHC:1474 WP No. 191 of 2025 ORAL ORDER Heard Sri. Ravi Shankar.S.V., learned counsel for the petitioner and learned counsel Sri. Dilip.M., for respondent Nos.1 to 4. Perused the writ petition papers. 2. Learned counsel Sri. Ravi Shankar.S.V. for the petitioner would submit that the proceedings initiated against the petitioner and Assessment Order at Annexure-A4 dated 27.03.2023 is an ex-parte order. The petitioner had no opportunity to file objections to any of the Notices. Moreover, it is submitted that the entire income received from sale of the property is taken into consideration for determining the income of the petitioner. It is submitted that the property was joint family property and the same is sold by mother, brother and sister of the petitioner, who had equal share in the property. Further, it is submitted that the petitioner had no opportunity to explain the same. Hence, he prays for an opportunity to participate in the proceedings by filing objection to Notice issued under Section 148A(b) of the Income Tax Act, 1961 (for short '1961 Act'). - 4 - NC: 2025:KHC:1474 WP No. 191 of 2025 3. Per contra, Sri. Dilip.M., learned counsel for the respondents would submit that the petitioner had an opportunity to file objection having received Notice issued by the respondents but he has failed to utilize the opportunity provided. In the said circumstances, he submits that the petitioner would not be entitled for any opportunity. 4. Having heard the learned counsels for the parties and on perusal of the entire writ petition papers, I am of the view that the petitioner would be entitled for an opportunity to file objection to Notice issued under Section 148A(b) of 1961 Act and to participate in the proceedings before Assessing Authority i.e., respondent No.1. It is the contention of the learned counsel for the petitioner that the Assessing Authority could not have taken entire sale consideration for determining the income of the petitioner since the entire sale consideration is to be divided among family members since property sold was joint family property i.e., mother, brother and sister of the petitioner who succeeded to the property on the death of their father. The said contention is to be put-forth before Assessing Authority i.e., respondent No.1. - 5 - NC: 2025:KHC:1474 WP No. 191 of 2025 5. In view of the above circumstances, I am of the view that to explain the circumstances under which the property was sold and how much the petitioner would be entitled out of the total sale consideration, the matter needs to be remanded back to respondent No.1. Accordingly, the following: ORDER (a) Writ petition is allowed and remanded; (b) Annexure-A2 bearing No.ITBA/AST/F/148A/ 2021-22/1042385582(1) dated 31.03.2022; Annexure-A3 bearing No.ITBA/AST/S/148_1/2021- 22/1042394062(1) dated 31.03.2022; Annexure-A4 bearing No.ITBA/AST/S/147/2022- 23/1051371332(1) dated 27.03.2023; Annexure- A5 bearing No.ITBA/PNL/F/271(1)(b)/2023- 24/1056103266(1) dated 14.09.2023; Annexure- A6 bearing No.ITBA/PNL/F/271F/2023- 24/1056103269(1) dated 14.09.2023; Annexure- A7 bearing No.ITBA/PNL/F/271(1)(c)/2023- 24/1056574626(1) dated 26.09.2023 are quashed; - 6 - NC: 2025:KHC:1474 WP No. 191 of 2025 (c) The petitioner to appear before respondent No.1 on 13.02.2025 and file objection to Annexures-A and A1, Notices issued under Section 148A(b) of 1961 Act. Thereafter, respondent No.1 shall proceed further in accordance with law; (d) The petitioner shall deposit a sum of Rs.3,00,000/- before respondent No.1-Assessing Authority on or before the date of appearance and the said deposit would be subject to the outcome of the order that is to be passed by the Assessing Authority- respondent No.1. All contentions of the parties are left open. Sd/- (S.G.PANDIT) JUDGE SMJ List No.: 1 Sl No.: 30 "