Vinod Sivaraj V. Union of India Ministry of Finance, Department of Revenue, Central Board of Direct Taxes and Additional / Joint / Deputy / Assistant Commissioner of Income Tax

WP/23545/2023

AI Insights

The case involves Vinod Sivaraj, the petitioner, challenging the assessment order, demand notice, and computation sheet issued by the Income Tax Department on 27.09.2022. The petitioner argued that the assessment order was passed without serving a draft assessment order as required under Section 144B(1) of the Income Tax Act, 1961, applicable to the assessment year 2020-21. Additionally, the petitioner contended that documents provided before the personal hearing were not considered by the assessing officer. The respondents defended the assessment under the amended provisions of Section 144B, which they argued did not require serving a draft assessment order to the petitioner. The court found that the documents submitted by the petitioner were not considered, necessitating interference with the assessment order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 820121 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961, Indian Constitution
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ; M DILIP; H SHANTHI BHUSHAN
• Assessee Lawyers: ANISH ACHARYA
• Keywords: Agricultural income; Assessment Order; Computation Sheet; Demand notice; Draft Assessment Order; Quashing; Reassessment proceedings
• Section: 143(3); 144B; 156

Judgement Text

"- 1 - NC: 2023:KHC:42184 WP No. 23545 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 23545 OF 2023 (T-IT) BETWEEN: VINOD SIVARAJ S/O V C SIVARAJ AGED ABOUT 40 YEARS, A202 SECOND FLOOR, BHAIRAVI CRUZ LUXOR APART CHELLEKERE MAIN ROAD, OPP ST ROCKS CHURCH BANGALORE – 560 043 …PETITIONER (BY SRI. ANISH ACHARYA.,ADVOCATE) AND: 1. UNION OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK NEW DELHI – 110 001 REPRESENTED BY ITS SECRETARY 2. ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX INCOME TAX OFFICER, NATIONAL E ASSESSMENT CENTRE, DELHI -110 001 …RESPONDENTS (BY SRI. Y.V.RAVIRAJ A/W SRI.M.DILIP ADVOCATE FOR R2; SRI. H. SHANTHI BHUSHAN DSG FOR R1) Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:42184 WP No. 23545 of 2023 THIS WP IS FILED UNDER ARTICLE 226 & 227 OF INDIAN CONSTITUTION PRAYIN6G TO QUASHING THE AO PASSED BY THE R-1 DTD 27.09.2022 BEARING DIN NO. ITBA/AST/S/143(3)/2022-23/1046013259(1) U/S 143(3) READ WITH SECTION 144B OF THE INCOME TAX ACT 1961 VIDE ANNX-D QUASHING THE DEMAND NOTICE ISSUED BY THE R-1 DTD 27.09.2022 BEARING NO. ITBA/AST/S/156/2022-23/1046013581(1) SECTION 156 OF THE INCOME TAX ACT 1961 VIDE ANNX-E QUASHING THE COMPUTATION SHEET ISSUED BY THE R-1 BEARING DIN NO. ITBA/AST/S/330/2020- 22/1046013521(1) DTD 27.09.2022 VIDE ANNX-F. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has impugned the first respondent’s order dated 27.09.2022 in DIN No. ITBA/ AST/ S/ 143(3)/ 2022-23 – 1046013259 (1) [Annexure-D] and the consequential demand notice and the computation sheet as mentioned hereinafter: • Demand Notice dated 27.09.2022 in No. ITBA/AST/S/156/2022-23/1046013581 (1) [Annexure-E], and - 3 - NC: 2023:KHC:42184 WP No. 23545 of 2023 • Computation Sheet dated 27.09.2022 in DIN No. ITBA /AST/S/330/2022- 23/1046013521 (1) [Annexure-F] 2. Sri Anish Acharya, the learned counsel for the petitioner, submits that this Court must interfere with the impugned assessment order dated 27.09.2022 on the following grounds: [A] that the assessment order could not have been passed without the petitioner being served with the draft assessment order in terms of Section 144B(1) of the IT Act as would be applicable to the assessment year 2020-21,and [B] that though the petitioner, even before the personal hearing on 16.09.2022, had furnished the details of the sale deeds and necessary bills to justify the claim that the declared agricultural income was genuine and that all the inputs were furnished for purchase - 4 - NC: 2023:KHC:42184 WP No. 23545 of 2023 from the local and registered dealers, these documents have not been considered observing that no documentary evidence has been furnished after the date of personal hearing viz., 16.09.2022. 3. Sri M. Dilip, the learned standing counsel for the respondents, submits that the assessment, after amendment to Section 144B of the IT Act with effect from 01.04.2021, will have to be completed in accordance with the amended provisions, and Sri M. Dilip argues that in terms of Section 144B (xxi) of the IT Act, only an eligible assessee as mentioned in Section 144C(1) of the Act would be entitled to be served with draft assessment order and no other assessee, and as such, the first ground cannot be justified. Insofar as the second ground, Sri M. Dilip cannot contest that the petitioner has furnished different sale deeds as also the bills even before the - 5 - NC: 2023:KHC:42184 WP No. 23545 of 2023 date of the personal hearing and these details have not been considered. 4. It remains indisputable that the first respondent had to consider the afore [the different sale deeds and the Bills] to opine that the reassessment proceedings would be justified because the income chargeable to tax is exempted. Therefore, there must be interference on this ground and as regards as the other ground, the petitioner must be reserved liberty to urge the same if there is occasion for the same after there is reconsideration. Hence, the following: ORDER The petition is allowed, and the impugned Assessment Order dated 27.09.2022 [Annexure-D] and consequential demand notice dated 27.09.2022 [Annexure- E] and computation sheet dated 27.09.2022 - 6 - NC: 2023:KHC:42184 WP No. 23545 of 2023 [Annexure-F] are quashed with liberty as aforesaid restoring the proceedings thereon. SD/- JUDGE SA ct:sr "