Karnataka High Court

Sri Jay Jayaram vs The Income Tax Officer on 20 February, 2024

Author: S.R.Krishna Kumar

Bench: S.R.Krishna Kumar

                                                     -1-
                                                                     NC: 2024:KHC:7159
                                                                  WP No. 3454 of 2024




                             IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                               DATED THIS THE 20TH DAY OF FEBRUARY, 2024

                                                   BEFORE
                               THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
                                   WRIT PETITION NO. 3454 OF 2024 (T-IT)

                      BETWEEN:

                      SRI JAY JAYARAM
                      AGED 74 YEARS
                      S/O SRI JAYASURYA
                      RESIDING AT NO.709,
                      1ST MAIN ROAD, INDIRANAGAR 1ST STAGE,
                      BENGALURU-560038.
                                                                              ...PETITIONER
                      (BY SRI. S. PARTHASARATHI, ADVOCATE)
                      AND:

                      THE INCOME - TAX OFFICER,
                      WARD 1(2)(1),
                      BMTC BUILDING,
                      80 FEET ROAD, 6TH BLOCK,
                      NEAR KHB VILLAGE
                      KORAMANGALA, BENGALURU-560 095.
                                                                          ...RESPONDENT
                      (BY SRI.M. DILIP,ADVOCATE)

Digitally signed by
VANDANA S
                             THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE
Location: High
Court of Karnataka
                      CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED
                      UNDER SECTION 148 OF THE ACT DATED 30/03/2021 BY THE
                      RESPONDENT FOR THE ASSESSMENT YEAR 2016-17 IN FILE DIN AND
                      NOTICE     NO.   ITBA/AST/S/148/2020-21/1031931993(1)    FOR   THE
                      ASSESSMENT YEAR 2016-17 (ANNEXURE-D)

                             THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE
                      COURT MADE THE FOLLOWING:
                                   -2-
                                                      NC: 2024:KHC:7159
                                                   WP No. 3454 of 2024




                             ORDER

In this petition, petitioner seeks for the following reliefs:

"a) issue a Writ of Certiorari or a direction in the nature of Writ of certiorari, quashing the notice issued under section 148 of the Act dated 30.03.2021 by the respondent for the assessment year 2016-17 in file DIN and Notice No. ITBA/AST/S/148/2020-

21/1031931993(1) for the assessment year 2016-17 (ANNEXURE-D);

b) Issue a Writ of certiorari or a direction in the nature of Writ of Certiorari, quashing the ex-parte assessment order dated:27.12.2022 passed under Section 147 rws 144 of the Act for the assessment year 2016-17 by the Respondent in file DIN & Order No.ITBA/AST/S/147/2022-23/1048252946(1) (ANNEXURE-A) as also the demand notice issued under Section 156 of the Act for the assessment year 2016-17 in file DIN & Notice No:

ITBA/AST/S/156/2022-23/1048252955(1) ANNEXURE- A1);

c) Issue a Writ of Prohibition or a direction in the nature of Writ of Prohibition, restraining the Respondent from proceeding further in the matter of recovery of demand in pursuance of the ex-parte assessment order dated: 27.12.2022 passed under Section 147 rws 144 of the Act for the assessment year 2016-17 and the demand notice dated: 27.12.2022 (Annexure-A & A1) respectively); and also the respondent should be restrained from taking any

NC: 2024:KHC:7159

further proceedings in consequence of ex-parte order which is enclosed as Annexure-A along with the demand notice (Annexure-A1);

d) Alternatively, issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus directing the Respondent to provide adequate opportunity to the Petitioner to respond to the notices and also the show cause notice and to direct the Respondent to pass an order of assessment thereafter;

e) Pass such other order, direction or writ as this Hon'ble Court deems fit, and

f) direct the Respondent to award the costs of this Writ Petition.

2. Heard learned counsel for the petitioner and learned

counsel for the respondent and perused the material on record.

3. In addition to re-iterating the various contentions urged in

the petition and referring to the material on record, learned counsel

for the petitioner submits that the impugned ex-parte assessment

order vide Annexure-A dated 27.12.2022 and subsequent orders,

notices etc., deserve to be quashed for the following reasons:-

(i) The respondents are purported / alleged to have issued a

Notice on 30.03.2021 under Section 148 of the Income Tax Act,

1961 (for short 'the I.T.Act') prior to the amendments that came into

NC: 2024:KHC:7159

force w.e.f. 01.04.2021; however, the respondent has not placed

any material to establish that the said Notice was issued on

30.03.2021 and consequently, the said Notice issued after

01.04.2021 was illegal and arbitrary and deserves to be quashed.

(ii) The alleged Notice dated 30.03.2021 issued after

01.04.2021 and the impugned assessment order pursuant thereto

are without jurisdiction or authority of law and contrary to the

provisions of Sections 147 to 149 of the I.T.Act after amendment

w.e.f. 01.04.2021

(iii) Even as stated in the impugned order, the Notice

purported / alleged to have been issued on 30.03.2021 was served

upon the petitioner subsequent to 01.04.2021 after the

amendments came into force which is yet another circumstance

that would vitiate the impugned order.

(iv) The impugned Notice, assessment order etc., are barred

by limitation in view of the amended provisions of Sections 147 to

149 of the I.T.Act and the same deserve to be quashed on this

ground also.

(v) The impugned Notices, orders, proceedings etc., are

contrary to the judgment of the Apex Court in the case of Union of

NC: 2024:KHC:7159

India Vs. Ashish Agarwal - (2022) 138 Taxmann.com 64 (SC)

and the same deserves to be quashed.

(vi) The impugned Notice alleged to have been issued on

30.03.2021 was never served upon the petitioner who was not

aware of the proceedings which are violative of principles of natural

justice and the impugned order deserves to be quashed on this

score also.

4. Per contra, learned counsel for the respondent - Revenue

submits that there is no merit in the petitioner and that the same is

liable to be dismissed.

5. A perusal of the material on record will indicate that

though several contentions have been urged by both sides in

support of their respective claims, a perusal of the impugned order

will indicate that no material is placed by the respondents to

establish that the Notice under Section 148 was issued on

30.03.2021 as alleged by the respondent; in fact, the impugned

order itself records that the Notice was served subsequent to

01.04.2021 when the amendment to Sections 147 to 149 of the

I.T.Act had come into force. Under these circumstances, in the

absence of any material to establish that the Notice under Section

NC: 2024:KHC:7159

148 of the I.T.Act (prior to amendment) was actually issued on

30.03.2021 before the amendment came into force on 01.04.2021,

I am of the considered opinion that in the light of the amended

provisions and the judgment of the Apex Court Ashish Agarwal's

case supra, the impugned orders and subsequent notices etc.,

deserve to be set aside by treating the impugned notice dated

30.03.2021 issued under Section 148 (Before amendment) as a

Notice under Section 148A(b) (After amendment) and by providing

an opportunity to the petitioner to file objections to the said Notice

and with a direction to the respondent to provide sufficient and

reasonable opportunity to the petitioner and hear him and proceed

further in accordance with law.

6. In the result, I pass the following:

ORDER

(i) Petition is hereby allowed.

(ii) The impugned order at Annexure - A dated

27.12.2022 and the impugned Notice at Annexure - A1 dated

27.12.2022 and all consequential proceedings, orders, notices,

etc., are hereby set aside.

NC: 2024:KHC:7159

(iii) The impugned Notice at Annexure-D dated

30.03.2021 is directed to be treated as a Notice under Section

148A(b) of the I.T.Act issued by the respondent to the petitioner.

(iv) Liberty is reserved in favour of the petitioner to file

objections, reply, response etc., along with documents to the

aforesaid Section 148A(b) Notice and urge / take up all

contentions including limitation, jurisdiction, maintainability etc.,

which shall be considered by the respondent, who shall proceed

further in accordance with law, bearing in mind the judgment of the

Apex Court in the case of Union of India Vs. Ashish Agarwal -

(2022) 138 Taxmann.com 64 (SC).