Karnataka High Court
Smt Komarla Yogendra Keertana vs The Principal Chie Commissioner Of ... on 9 January, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2024:KHC:1274
WP No. 10266 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 10266 OF 2023 (T-IT)
BETWEEN:
SMT KOMARLA YOGENDRA KEERTANA
D/O SHIVAKUMAR KOTA
AGED ABOUT 52 YEARS
R/A 6, FLAT NO.104, NR SREEGLITZ
FIRST FLOOR, 3RD MAIN
CHAMARAJPET
BANGALORE-560 018.
PAN CARD-AVAPK2949K
...PETITIONER
(BY SMT. SHEETAL BORKAR ., ADVOCATE)
AND:
1. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX
KARNATAKA AND GOA REGION
GROUND FLOOR, C R BUILDING
NO.1 QUEENS ROAD
BENGALURU.
Digitally
signed by 2. THE INCOME TAX OFFICER
VANDANA S
WARD 7(2)(5), BMTC BUILDING
Location: 80 FEET ROAD, 6TH BLOCK
HIGH
COURT OF NEAR KHB GAMES VILLAGE
KARNATAKA KORAMANGALA
BENGALURU-560 095.
...RESPONDENTS
(BY SRI. E.I. SANMATHI.,ADVOCATE)
THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER
DT. 31.03.2022 VIDE DIN AND NOTICE NO. ITBA/AST/F/148A/2021-
22/1042355009(1) PASSED BY THE R2 U/S 148A(D) OF THE INCOME TAX
ACT 1961 VIDE ANNX-B.
-2-
NC: 2024:KHC:1274
WP No. 10266 of 2023
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
In this petition, petitioner seeks quashing of the impugned
order at Annexure-B dated 31.03.2022 issued by the 2nd
respondent under Section 148A(d) of the Income Tax Act, 1961 (for
short 'the I.T.Act') and for other reliefs.
2. Heard learned counsel for the petitioner and learned
counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in
the petition and referring to the material on record, learned counsel
for the petitioner invites my attention to the impugned Notice at
Annexure-A dated 24.03.2022 issued under Section 148A(b) of the
I.T. Act in order to point out that the said Notice which stipulates a
period of 5 days for the petitioner to submit his reply falls short of
the prescribed minimal period of 7 days as envisaged under
Section 148A(d) of the I.T. Act and consequently, on this ground
alone, the impugned Notice and further proceedings including the
impugned order at Annexure-B passed under Section 148(A)(d) of
the I.T. Act deserves to be quashed.
NC: 2024:KHC:1274
4. Per contra, learned counsel for the respondents while
admitting that the impugned Notice at Annexure-A dated
24.03.2022 calls upon the petitioner to submit the reply on or
before 29.03.2022 submits that there is no merit in the petition and
the same is liable to be dismissed.
5. I have given my anxious consideration to the rival
submissions and perused the material on record.
6. In the case of Mukesh J. Ruparel Vs. Income Tax
Officer, Ward 27(2)(1) - W.P.No.15268/2023 dated 25.07.2023,
the Hon'ble Division Bench of Bombay High Court has held that a
Notice under Section 148A(b) is illegal, invalid and inoperative, if it
prescribes a period lesser than 7 days in view of express language
employed in Section 148A(b). The Bombay High Court held as
under:-
"Petitioner is impugning a notice dated 15th March
2023 issued under Section 148A(b) of the Income Tax Act,
1961 (the Act), the order dated 31st March 2023 passed
under Section 148-A(d) of the Act and notice dated 31st
March 2023 issued under Section 148 of the Act.
2. Petitioner is an individual who did not file return of
income for Assessment Year 2016-17 because his income
was less than taxable limit.
3. Petitioner received a notice dated 15th March 2023
under Clause 148A(b) of the Act from Respondent No.1,
NC: 2024:KHC:1274
stating that Respondent No.1 has information which
suggests that income chargeable to tax for Assessment Year
2016-17 has escaped assessment within the meaning of
Section 147 of the Act. Petitioner was provided with
information / enquiry on which reliance was placed in the
form of annexure to the notice and Petitioner was called
upon to show cause on or before 28th March 2023 as to why
a notice under Section 148 of the Act should not be issued.
The information which suggested that there has been an
escapement of income from assessment provided details of
a property that Petitioner had purchased. Petitioner was
directed to provide head-wise computation of income, details
of purchase of immovable property during Financial Year
2015-16 supported with copy of registered agreement with
annexure II, details of payment made and source of
acquisition of said immovable property.
4. Petitioner submitted an elaborate reply on 18th March
2023 and also raised certain objections. The main objection
raised was that under the provision of Section 148A(b) of the
Act, the assessee should be provided an opportunity of being
heard by serving upon the assessee a notice to show cause
within such time as may be specified in the notice being not
less than seven days but not exceeding thirty days from the
date on which said notice has been issued. Since the notice
dated 15th March 2023 provides only for five days when the
law requires minimum seven days to be given, the notice
itself was bad-in-law.
5. Along with reply, Petitioner also provided a photo copy
of the notarised affidavit of Petitioner's brother affirmed on
18th March 2023, in which the brother has confirmed of giving
gift of Rs.75 lakhs to Petitioner on 26th March 2019, which is
much beyond the relevant Assessment Year.
6. Respondent No.1 has passed the impugned order
dated 31st March 2023 under Clause D of Section 148A of
the Act. In the order, Respondent No.1 states that from the
statement issued by HDFC Bank for the period 1st April 2018
to 31st March 2019 of the brother, it is seen that there is a
credit entry of Rs.1 Crore on 19th March 2019, out of which
Rs.75 lakhs has been paid to Petitioner on 26th March 2019.
Respondent No.1 also states that the gift deed submitted by
Petitioner from the brother has not been notarised.
NC: 2024:KHC:1274
7. Moreover, Respondent No.1 states that income
chargeable to tax has escaped assessment without
mentioning what is the amount of income that has escaped
assessment. Further, the approval under Section 151 of the
Act which is annexed to the impugned order is of one
Poonam Vijay Chhabria whose PAN number is also entirely
different from the PAN number of Petitioner. Respondent
No.1 is totally silent about the objections raised by Petitioner
of minimum seven days notice required. Mr. Gandhi states
that on each of these grounds not only the impugned order
dated 31st March 2023 but also the notice dated 31st March
2023 itself should be quashed and set aside.
8. No reply has been filed though Petition was served
more than a month ago. We have, therefore, decided to go
ahead and consider the matter and dispose it since we were,
prima facie, satisfied that there was merit in Petitioner's
submissions.
Section 148-A(B) of the Act reads as under:-
"provide an opportunity of being heard to the
assessee, by serving upon him a notice to show cause
within such time, as may be specified in the notice, being
not less than seven days and but not exceeding thirty
days from the date on which such notice is issued, or
such time, as may be extended by him on the basis of an
application in this behalf, as to why a notice under section
148 should not be issued on the basis of information
which suggests that income chargeable to tax has
escaped assessment in his case for the relevant
assessment year and results of enquiry conducted, if any,
as per clause (a)."
9. The notice dated 15th March 2023 gives time only
up to 20th March 2023 to show cause. We have to note that
even the guidelines dated 1st August 2022 for issuing of
notice under Section 148 of the Act also provide that if the
result of an enquiry / information available suggests that
income chargeable to tax has escaped assessment, the
Assessing Officer shall provide an opportunity of being heard
by assessee by issuing the show cause notice under Section
148A(b) of the Act and the notice shall provide between
seven to thirty days time for the assessee to submit their
reply. A template of the show cause notice is also annexed
to the guidelines. Therefore, in view of the guidelines, we
NC: 2024:KHC:1274
would also read that the minimum seven days required to be
made as a mandatory requirement and failure to comply with
would render a notice itself invalid. Therefore, on this ground
alone, the notice requires to be quashed and set aside.
Perhaps, being aware of this position, Respondent No.1
has chosen not to deal with these objections raised by
Petitioner in the reply to the show cause notice.
10. We also found in the said guidelines a provision that
the order under Section 148A(d) of the Act shall be sent to
assessee along with the approval of the specified authority
for such order under Section 148A(d) of the Act. In the case
at hand, the approval that has been sent is of some other
assessee and not Petitioner. This also indicates non-
application of mind by Respondent No.1. On this ground
also, the order dated 31st March 2023 impugned in the
Petition is required to be quashed and set aside.
11. Further, in the guidelines to which is annexed a
template of the order to be passed under Section 148A(d) of
the Act provides for mentioning of amount escaped based on
the information and how this amount is represented in the
form of assets. It also provides that the Assessing Officer will
specify the quantum of income / assets / expenditure / entry
which has escaped assessment. This not stated in the order
under Clause D of Section 148 of the Act. On this ground
also, the said order dated 31st March 2023 is required to be
quashed and set aside.
12. Further, there is a factually incorrect statement made
in the order that the affidavit of Petitioner's brother that was
submitted was not notarised when it was factually a
notarised affidavit.
13. Further, in the impugned order, it is stated that the
HDFC statement / document do not substantiate the credit
worthiness and genuineness of the lender of the gift, i.e.,
brother of Petitioner.
Mr. Gandhi states that if only Petitioner was called upon
to submit, Petitioner would have submitted evidence towards
credit worthiness of the brother because in the show cause
notice issued, Petitioner was only directed to call upon to
disclose the source from which he got money to pay for the
flat.
NC: 2024:KHC:1274
In over view, therefore,, on this ground also, the
impugned order dated 31st March 2023 is required to be
quashed and set aside.
14. Accordingly, we hereby quash and set aside the
notice dated 15th March 2023 issued under clause (b) of
Section 148-A of the Act, the impugned order dated 31st
March 2023 issued under clause (d) of Section 148A of the
Act and consequent notice dated 31st March 2023 issued
under Section 148 of the Act.
15. Petition disposed. There shall be no order as to
costs."
7. In my considered opinion, in the light of the undisputed
fact that the impugned Notice at Annexure-A dated 24.03.2022
calls upon the petitioner to submit his response/reply before
29.03.2022 i.e., within a period of 5 days, which is lesser than the
minimum prescribed period of 7 days as contemplated under
Section 148A(d) coupled with the judgment of the Bombay High
Court referred to supra, I am of the considered opinion that the
impugned Notice at Annexure-A as well as the impugned order at
Annexure-B deserves to be quashed and liberty is to be reserved in
favour of the respondents to initiate appropriate proceedings
against the petitioner in accordance with law.
NC: 2024:KHC:1274
8. In the result, I pass the following:-
ORDER
(i) Petition is hereby allowed.
(ii) The impugned Notice at Annexure-A dated 24.03.2022
and impugned order at Annexure-B dated 31.03.2022 passed by
the respondents are hereby quashed.
(iii) Liberty is reserved in favour of the respondents to initiate
appropriate proceedings against the petitioner in accordance with
law, subject to all just exceptions.
Sd/-
JUDGE
Srl.
