Sri Shivappa S/o Late Borappa V. National Faceless Assessment Centre and The Income Tax Officer Ward -1 and TPS

WP/25273/2023

AI Insights

The case involves Sri Shivappa, the petitioner, who challenged the best judgment assessment order and subsequent penalty orders issued by the National Faceless Assessment Centre and the Income Tax Officer for the Assessment Year 2021-22. The petitioner, having transitioned from a business in blue metal to agriculture, did not file Income Tax Returns (ITR) for the years 2019-20 and 2020-21. Upon filing ITR for 2021-22, he faced reassessment and penalties, which he contested on grounds of insufficient opportunity to present his case, as notices were sent to his tax professional's email rather than directly to him. The court found merit in the petitioner's grievance regarding the lack of opportunity to contest the reassessment and penalties, leading to the quashing of the orders and restoration of the proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 805716 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 29-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP
• Assessee Lawyers: RAVI SHANKAR V
• Keywords: Agricultural income; Best Judgment Assessment; Penalty order; Reassessment proceedings; Lack of sufficient opportunity
• Section: 144; 142(1); 143(2); 270A; 144B; 272A(1)(d)

Judgement Text

" - 1 - NC: 2023:KHC:43128 WP No. 25273 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 25273 OF 2023 (T-IT) BETWEEN: SRI SHIVAPPA S/O LATE BORAPPA AGED ABOUT 55 YEARS NO 1, MEGALAHATTI RANGASAMUDRA POST PAVAGADA 4561202 PAN BSNPS 7590H …PETITIONER (BY SRI. RAVI SHANKAR S V.,ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE REP BY ADDITIONAL / JOINT/ DEPUTY / ASSISTANT COMMISSONER OF INCOME TAX / INCOME TAX OFFICER INCOME TAX DEPARTMENT MINSITRY OF FINANCE ROOM NO 401, 2ND FLOOR, E RAMP JAWARHALAL NERHU STADIUM DELHI 110003 2. THE INCOME TAX OFFICER WARD -1 AND TPS AAYAKAR BHAVAN RAMAKRISHANANAGAR KUNIGAL ROAD Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:43128 WP No. 25273 of 2023 RAMAKRISHNA NAGAR TUMKUR 572103 …RESPONDENTS (BY SRI. DILIP M., ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED U/S 144 R.W.S. 144B DATED 30/12/2022 BEARING DIN ITBA/AST/S/144/2022-23/1048350645(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2021-22 HEREIN MARKED AS ANNEXURE-A; QUASH THE PENALTY ORDER DATED 28/06/2023 ISSUED U/S 272A(1)(d) OF THE ACT BEARING DIN AND NOTICE NO. ITBA/PNL/F/272A(1) (d) 2023- 24/1054019550(1) BY THE R1 FOR THE ASSESSMENT YEAR 2021-22 HEREIN MARKED AS ANNEXURE-A1; QUASH THE PENALTY ORDER U/S 270A OF THE ACT DATED 28/06/2023 BEARING DIN NO. ITBA/PNL/F/270A/2023- 24/1054025558(1) BY THE R1 FOR THE ASSESSMENT YEAR 2021-22 HEREIN MARKED AS ANNEXURE-A2. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - NC: 2023:KHC:43128 WP No. 25273 of 2023 ORDER The petitioner has impugned the first respondent’s best judgment assessment order dated 30.12.2022 [Annexure-A] for the Assessment Year 2021-22 and the penalty orders dated 28.06.2023 [Annexures – A1 and A2]. The petitioner’s primary grievance is as regards lack of sufficient opportunity and therefore, Sri. Ravi Shankar S.V. and Sri. M.Dilip, the learned counsels for the parties, are heard in the light of the afore for final disposal of this petition. 2. Sri. Ravi Shankar S.V. submits that the petitioner, until the financial year corresponding to the Assessment Year 2018-19, was engaged in the business of blue metal, but for the subsequent financial years, the petitioner was constrained to give up such business and focus on agriculture and therefore the petitioner did not file ITR for the Assessment Years 2019-20 and 2020-21. The - 4 - NC: 2023:KHC:43128 WP No. 25273 of 2023 petitioner and his family members hold about 35 acres of the land in Doddenahalli Village, Y.N.Hosakote Hobli, Pavagada Taluk, and the petitioner has filed returns in ITR – 3 for the Assessment year 2021-22 declaring the details of the agricultural lands, income there from and justifying the expenditure incurred in cultivating the lands. 3. Sri. Ravi Shankar S.V. further submits that the petitioner, while he was engaged in the business, had furnished his E-mail address in the portal for service of intimation. However, with the change in vocation, the petitioner has furnished the address of his tax professional and all notices under Section 143(2), 142(1) and 144 of the Income Tax Act, 1961 [for short, ‘the IT Act’] are addressed to the professional’s E-mail ID and not to the petitioner and as such, the petitioner has not been able to place on record material to demonstrate that reassessment proceedings will not be justified. Sri. Ravi Shankar - 5 - NC: 2023:KHC:43128 WP No. 25273 of 2023 S.V. has taken this Court through the different annexures appended to the petition in support of the afore submissions. 4. Sri. M. Dilip cannot dispute that the notices referred to in the impugned assessment order have been addressed to the petitioner’s tax professional’s E-mail ID. If because of certain circumstances the petitioner has changed the E-mail ID furnished on the portal and the tax professional has not informed the petitioner because of the multiple notices received in the course of this profession, the petitioner’s grievance about lack of opportunity must be considered favourably especially in the light of the facts urged before this Court viz., that for the relevant assessment year, the petitioner has declared only agricultural income furnishing the details that would justify the income as aforesaid and also the expenditure claimed. If the impugned assessment order and the penalty orders are - 6 - NC: 2023:KHC:43128 WP No. 25273 of 2023 quashed, the petitioner must have liberty to file reply and also respond to any queries that the concerned assessing officer may have, and there must be due opportunity in that regard. Hence the following: ORDER a) The petition is allowed, and the impugned assessment order dated 30.12.2022 [Annexure-A] and the penalty orders dated 28.06.2023 [Annexures – A1 and A2] are quashed restoring the proceedings to the stage of the notice under Section 144 of the IT Act reserving liberty to the petitioner to file reply within a period of four [4] weeks from the date of receipt of a certified copy of this order. b) It is needless to observe that if the portal does not enable the petitioner to file reply within four [4] weeks, there must be corresponding extension of time. - 7 - NC: 2023:KHC:43128 WP No. 25273 of 2023 c) It must be observed that the petitioner shall have due opportunity to issue any clarification that may be required by the assessing officer. SD/- JUDGE RB "