The Karnataka High Court partly allowed a writ petition filed under Articles 226 and 227 of the Constitution of India, praying to set aside the impugned notice dated 26/07/2022 passed under Sec. 148a(b) of the Act by the R-2 for the assessment year 2014-15 b) quash the impugned assessment order dated 22/05/2023 passed under Sec 147. The Court observed that there is nothing on record to indicate the manner in which the earlier Notices or notices under Section 148A[b] of the IT Act were served.
Brief Facts:
The petitioner has impugned the second respondent’s order dated 26.07.2022 under Section 148A[d] of the Income Tax Act, 1961 [for short, ‘the IT Act’] and the subsequent Assessment Order dated 25.02.2023 under Section 147 read with Sections 144/144B of the IT Act as also the consequential show cause notices for penalty and communication dated 25.07.2023. These impugned orders, notices, and communication are produced as Annexures-A, E1-E3, and D. The proceedings are commenced with the issuance of notice under Section 148A[b] of the IT Act on 24.05.2022.
The petitioner’s primary grievance is about the lack of opportunity to show cause against the initiation of the proceedings under Section 148 of the IT Act.
Contentions of the Petitioner:
The Learned Counsel for the Petitioner submitted that if the petitioner had due notice of the proceedings, she could have demonstrated that the initiation was time barred even as of 24.05.2022.
The Court noted that the second respondent has referred to the notices issued under Section 148 and Section 142[1] of the IT Act as also the intimation under Section 144B and final show cause notice before the impugned assessment order furnishing the date of communication but without indicating the mode of communication.
The Court observed that there is nothing on record to indicate the manner in which the earlier Notices or notices under Section 148A[b] of the IT Act were served. The petitioner’s case is that these notices/intimation/communications have been uploaded on the portal but not sent to the petitioner even by e-mail and as such, the petitioner did not have the due opportunity, and the impugned demand is sent by the registered post by acknowledgment due. The Court said that when there is no material to hold conclusively that the petitioner was indeed served with notice under Section 148A[b] of the IT Act or the subsequent proceedings, this Court must interfere in restoring the proceedings to the stage of notice under Section 148A[b] of the IT Act with liberty to the petitioner to file a response and to demonstrate that the proceedings even as of the date of 24.05.2022 were time-barred.
The decision of the Court:
The Karnataka High Court, partly allowing the petition, held that the impugned orders dated 26.07.2022 and 25.02.2023 [Annexures-D and E], the Penalty Notices [Annexures-E1 to E3], and the communication dated 22.05.2023 [Annexure-A] are quashed.
Case Title: Smt. Changa Srinivas Iyer Shyamala v The Assessment Unit Income-Tax Department & Anr.
Coram: Hon’ble Justice B M Shyam Prasad
Case no.: WRIT PETITION NO. 21253 OF 2023 (T-IT)
Advocate for the Petitioner: Ms. Jinita Chatterjee
Advocate for the Respondents: Mr. M. Dilip
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