SRI THULASIRAM KESAVAN V. ASSISTANT COMMISSIONER OF INCOME TAX

WP/21335/2023

AI Insights

The case involves Sri Thulasiram Kesavan, an overseas citizen of India, who challenged the assessment order and demand notice issued by the Assistant Commissioner of Income Tax. The petitioner argued that the orders were passed without proper consideration of the material on record, particularly his responses and documents showing no chargeable income in India. The court found that the respondent had not adequately considered the foreign income tax returns and bank statements provided by the petitioner, which led to the conclusion that the investments in immovable properties remained unexplained. The court decided to quash the impugned orders and restore the proceedings for re-adjudication, emphasizing the need for a thorough examination of the petitioner's explanations and documents.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 751145 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: GAUTAM BHARADWAJ; ANKITH JAIN
• Keywords: Assessment Order; Demand notice; Foreign income; Immovable Property; Income Tax; Reassessment; Writ petition
• Section: 148A(d); 226; 227; 148A[b]1

Judgement Text

"- 1 - NC: 2023:KHC:40092 WP No. 21335 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 21335 OF 2023 (T-IT) BETWEEN: SRI THULASIRAM KESAVAN S/O SETHURAM THULASIRAM, AGED ABOUT 65 YEARS, RESIDING AT NO.3755, MAGNOLIA PARK DR, FLOWER MOUND, TEXAS, UNITED STATES, (PREVIOUSLY AT NO.9823, ARCHER LANE, DUBLIN UNITED STATES) … PETITIONER (BY SRI. GAUTAM S. BHARADWAJ., ADVOCATE A/W SRI ANKITH JAIN, ADVOCATE) AND: ASSISTANT COMMISSIONER OF INCOME TAX OFFICE AT CIRCLE 3(2) (1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095 … RESPONDENT (BY SRI. M. DILIP, ADVOCATE) Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:40092 WP No. 21335 of 2023 THIS WRIT PETITION IS FILED UNDER ARTICES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER DATED 19/07/2023 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX BEARING NO. ITBA/AST/S/147/2023-24/105446339(1) ANNEXED AS ANNEXURE-A AND THE CONSEQUENTIAL DEMAND NOTICE BEARING NO. ITBA/AST/S/156/2023- 24/1054463364(1) DATED 19/07/2023 PRODUCED AS ANNEXURE-B AND ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has impugned the assessment order dated 19.07.2023 [Annexure-A] and the consequential demand dated 19.07.2023 [Annexure- B]. Sri Ankith Jain, the learned counsel for the petitioner, and Sri M Dilip, the learned standing counsel for the respondent, are heard for final disposal of the petition on the limited ground of lack of due consideration of material on record in concluding the adjudication order dated 29.07.2022 - 3 - NC: 2023:KHC:40092 WP No. 21335 of 2023 under Section 148A[d] of the Income Tax Act, 1961 [for short, ‘the IT Act’] and in passing the impugned orders dated 19.07.2023. 2. The petitioner’s case is that he is an overseas citizen of India and he has filed returns in the United States of America disclosing the remittances to India; that utilizing such remittances, as also certain hand loans availed from the acquaintances and return of sale advances, he has purchased immovable property during the assessment year 2014-15; that when he is issued with notice under Section 148A[b]1 of the IT Act, he has filed a detailed response setting forth the aforesaid circumstances furnishing the necessary documents and asserting that he has no income that could be charged to tax in India. 1 The petitioner is issued with this notice stating that the earlier Notice dated 05.04.2021 shall be deemed to be under Section 148A(b) of the IT Act - 4 - NC: 2023:KHC:40092 WP No. 21335 of 2023 3. The petitioner’s further case is that respondent does not controvert that the petitioner has filed reply to the notice under 05.04.2021 with necessary documents, but while concluding the impugned adjudication order dated 29.07.2022 [Annexure – K], the respondent, though makes a reference to the documents furnished and the circumstances relied upon by the petitioner to justify his statement that he has no chargeable income in India and that there are obvious computational errors, has recorded that the petitioner has not provided any details of the dates and amounts of transfer of the foreign earnings and in the absence of such details, the investments made in purchase of the immovable properties remains unexplained. 4. It is seen from the adjudication order dated 29.07.2022 [Annexure – K] that there is reference to the petitioner having filed foreign IT Returns and Bank Statement while requesting time - 5 - NC: 2023:KHC:40092 WP No. 21335 of 2023 for furnishing further details. The respondent before opining in the adjudication order dated 29.07.2022 that income has remained unexplained and has escaped tax ought to have considered the foreign IT Returns and Bank Statement, and the other explanation as regards the advance returned by a purchaser. Sri M Dilip submits that this Court may take note of the fact that the petitioner has not challenged the adjudication order dated 29.07.2022 [Annexure – K] under Section 148A(d) of the IT Act, and if the petitioner’s grievance is centered around the alleged infirmity in the adjudication order, the petitioner should have challenged this order. 5. This contention is considered in the light of the obvious infirmity viz., non-application of mind in concluding that no details have been furnished and the irrefutable fact that if the petitioner can explain the source for purchase of the immovable property, there cannot be any reassessment, and the - 6 - NC: 2023:KHC:40092 WP No. 21335 of 2023 relevant materials are not considered even while passing the impugned order dated 19.07.2023. This Court is of the considered view that, given the explanation offered by the petitioner, there must be interference in this petition, without insisting on formal challenge to the adjudication order dated 29.07.2022 [Annexure – K] under Section 148A(d) of the IT Act and restoring the proceedings for re- adjudication under Section 148A(d) of the IT Act with liberty to the petitioner to file further details and directing the respondent to consider the same and to pass adjudication order as contemplated under Section 148A[d] of the IT Act. In the light of the afore, the following: ORDER [a] The petition is allowed, and the impugned assessment order dated 19.07.2023 [Annexure-A], consequential demand dated 19.07.2023 [Annexure-B] and the - 7 - NC: 2023:KHC:40092 WP No. 21335 of 2023 adjudication order dated 29.07.2022 under Section 148A[d] of the IT Act are quashed restoring the proceedings for re- consideration under Section 148A of the IT Act. [b] The petitioner is granted liberty to file further reply with further details within a period of four [4] weeks from the date of receipt of a certified copy of the order. It is needless to observe that if there is any delay in enabling the petitioner to file such reply or documents on e-portal, there shall be corresponding increase in the enlargement of the time now allowed. Sd/- JUDGE AN/- "