SRI SUSHIL PANDURANG MANTRI V. THE COMMISSIONER OF INCOME TAX (TDS)

WP/25318/2023

AI Insights

The case involves a writ petition filed by Sri Sushil Pandurang Mantri against the Commissioner of Income Tax (TDS) and the Deputy Commissioner of Income-Tax TDS Circle-2(1). The petitioner challenged the sanction order under Section 279(1) of the Income-Tax Act, 1961, which was issued without proper notice as required under Section 2(35) of the Act. The petitioner contended that he was not the Managing Director of M/s Mantri Dwellings Private Limited at the relevant time and thus not liable under the said section. The court found issues with the service of notice and allowed the petition in part, quashing the sanction order and restoring the proceedings for reconsideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 748354 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 11-12-2023
• 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: Income Tax; Managing Director; Notice; Sanction Order; TDS; Writ petition
• Section: 226; 279(1); 227; 2.35

Judgement Text

" - 1 - NC: 2023:KHC:44882 WP No. 25318 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF DECEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 25318 OF 2023 (T-IT) BETWEEN: SRI SUSHIL PANDURANG MANTRI AGED ABOUT 60 YEARS, S/O SRI PANDURANG JIVRAJ MANTRI, MANTRI HOUSE, NO 41, VITTAL MALYA ROAD, BANGALORE – 560 001 … PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE) AND: 1. THE COMMISSIONER OF INCOME TAX (TDS) 4TH FLOOR, HMT BHAVAN, NO.59, BELLARY ROAD, BANGALORE – 560 032 2. THE DEPUTY COMMISSIONER OF INCOME-TAX TDS CIRCLE-2(1), HMT BHAVAN, NO.59, BELLARY ROAD, BANGALORE – 560 032 … RESPONDENTS (BY SRI. E.I. SANMATHI., ADVOCATE) Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:44882 WP No. 25318 of 2023 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE SANCTION ORDER UNDER SECTION 279(1) OF THE INCOME-TAX ACT, 1961 BEARING DIN NUMBER 18/KAR/30032023/00179 DATED 30/03/2023 PASSED BY THE R1 ENCLOSED AND REFERRED AS ANNEXURE-A IN RESPECT OF THE PETITIONER CONCERNED AND ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has impugned the first respondent’s order granting sanction under Section 279[1] of the Income Tax Act, 1961 [for short, the ‘IT Act’] [Annexure-A] which is dated 30.03.2023 on the limited ground that the petitioner is not issued with notice as required under the provisions of Section 2[35] of the IT Act and contending that if the petitioner was indeed issued with such notice he could have demonstrated to the first respondent that he was not even a Director of M/s Mantri Dwellings Private Limited as of the relevant date and the proceedings under Section 2[35] of the IT Act would not be necessary. - 3 - NC: 2023:KHC:44882 WP No. 25318 of 2023 2. Sri S. Annamalai, the learned Counsel for the petitioner, and Sri E.I. Sanmathi, the learned Counsel for the respondent, are heard in the light of this limited canvas against the impugned order dated 30.03.2023. It is seen from the impugned order dated 30.03.2023 that the first respondent has opined that though notices have been issued on 18.01.2021, 07.09.2021 and 10.03.2022 neither the petitioner nor the other officers mentioned have filed details of the person in charge of payments that attracted TDS for the financial year 2015-16 and that the petitioner, as per the annual returns filed, is the Managing Director. 3. Sri S. Annamalai has placed on record a copy of the notice dated 10.03.2023 to contend that this notice is not issued for the purposes of Section 2[35] of the IT Act. It is seen that such notice is not issued with reference to the details as would be required under Section 2[35] of the IT Act but relates - 4 - NC: 2023:KHC:44882 WP No. 25318 of 2023 to the application filed for compounding of the offences. This creates doubt about the due service of notice. This Court must also observe that the petitioner’s specific case is that the petitioner is not served with notice and that he has obtained a copy of the notice dated 10.03.2023 from the Company’s office. Further, certain documents have been filed as annexures to the writ petition to support the contention that the petitioner is not the Managing Director and therefore he would not be an officer as contemplated under Section 2[35] to face the prosecution. 4. This Court, in the light of the afore, is of the considered view that the petition must be disposed of with liberty to the petitioner to show cause to the notice dated 10.03.2023 with supporting documents while quashing the impugned sanction order dated 30.03.2023. Therefore, the following - 5 - NC: 2023:KHC:44882 WP No. 25318 of 2023 ORDER [A] The petition is allowed in part and the impugned order dated 30.03.2023 insofar as it relates to the petitioner is quashed restoring the proceedings under Section 279 of the IT Act for reconsideration as regards the petitioner with liberty to the petitioner to file his response. [B] The petitioner shall be at liberty to file objections on receipt of the copies of the earlier notices dated 18.01.2021 and 07.09.2021, and the petitioner shall appear before the second respondent on 04.01.2024. SD/- JUDGE NV "