The It Act, Accordingly Petitioner Was Asked To File Returns In The Prescribed Form Within 30 Days For The Said Assessment Year v. Nc: 2024:Khc-D:7014Wp

Digitally signedbyMOHANKUMARB SHELARLocation: HIGHMOHANKUMARCOURT OFB SHELARKARNATAKADHARWADBENCHDate:2024.05.3115:02:07 +0530 NC: 2024:KHC-D:7014 WP No. 100110 of 2022 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 27 DAY OF MAY, 2024 BEFORE THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR -WRIT PETITION NO.100110 OF 2022 (TIT) BETWEEN: SMT. VIDYA VIRUPAKSHAPPA HARLAPUR, AGE: 49 YEARS, OCC. LIC AGENT, R/O: ANUGRAHA, HOUSE NO.13, M VANASIRI NAGAR, SECTOR-9, SATTUR, DHARWAD-580009. … PETITIONER (BY SRI SANGRAM S. KULKARNI, ADVOCATE) AND: THE INCOME TAX OFFICER WARD 1(1), HUBLI-580025, OFFICE OF THE INCOME TAX, NAVANAGAR, HUBLI, DIST. DHARWAD. … RESPONDENT (BY SRI M. THIRUMALESH, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI AND QUASH THE IMPUGNED NOTICE VIDE NO.ITBA/ AST/S/148/2021-22/1033896939(1) DATED 30/06/2021 ISSUED BY THE RESPONDENT INCOME TAX OFFICER WARD 1(1) HUBLI VIDE ANNEXURE-B AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Heard learned counsel Sri Sangram S. Kulkarni appearing for petitioner and learned counsel Sri M. Thirumalesh, appearing for respondent. 2. Petitioner is an income tax assessee, who has been filing her income tax returns regularly. She has questioned the impugned notice vide No.ITBA/AST/S/148/2021-22/1033896939(1), dated 30.06.2021 issued by the respondent-Income Tax Officer, Ward No.1(1), Hubli vide Annexure-B. 3. It is the case of petitioner that during the assessment year 2015-16 she had sold plot measuring 1000 square meters on 05.11.2014 for valuable sale consideration of Rs.25,00,000/-. Petitioner filed her returns of income on 23.08.2015. Pursuant to which, respondent issued notice under Section 148 of the Income Tax Act, 1961 (for short ‘the IT Act’) on 30.06.2021 proposing to re-assess the income of the petitioner for the assessment year 2015-16 on the ground that the assessment for the year 2015-16 has escaped assessment within the meaning of Section 147 of the IT Act, accordingly petitioner was asked to file returns in the prescribed form within 30 days for the said assessment year. 4. Petitioner addressed a letter to the respondent as per Section 148A of the IT Act which came into effect from 01.04.2021 contending that there should be an opportunity afforded to the assessee to show cause as to why notice under Section 148 of the IT Act should not be issued. 5. Respondent issued notice under Section 142(1) of the IT Act on 22.09.2021. It is contended that the said notice was given without providing reasons for reopening of the assessment in gross violation of the guidelines issued by the Hon’ble Apex Court in the case of GKN Driveshafts (India) Ltd., vs. Income Tax Officer and Others, reported in AIR 2003(1) SCC 72. On receipt of said notice from the Department, the petitioner addressed her reply which came to be acknowledged by the respondent despite which on 11.11.2021, the respondent uploaded reasons for reopening of the assessment on its portal. It is the case of petitioner that despite the returns having been filed in response to the notice issued, respondent has failed to consider the provisions of the IT Act as amended under Section 148A of the IT Act and therefore the notice issued is illegal, perverse, arbitrary and so also the learned counsel contended that the petitioner will not fall within the bracket of Sections 148 and 148A of the IT Act for the reason that the amount is less than Rs.50,00,000/- therefore the notice issued is bad in law. response to the notice issued, respondent has failed to consider the provisions of the IT Act as amended under Section 148A of the IT Act and therefore the notice issued is illegal, perverse, arbitrary and so also the learned counsel contended that the petitioner will not fall within the bracket of Sections 148 and 148A of the IT Act for the reason that the amount is less than Rs.50,00,000/- therefore the notice issued is bad in law. 6. Learned counsel Sri M.Thirumalesh representing the respondent contends that notice is issued in accordance with law, the same came to be issued as the market value shown for sale of the property was Rs.53,47,000/- for stamp duty purpose, but the sale consideration was shown as Rs.25,00,000/- and the same is not disputed either by the seller or by the purchaser. It is also contended that notice under Section 148 of the IT Act came to be issued on 30.06.2021. The approval of the competent authority that is Chief Commissioner of Income Tax, Bengaluru-1, notice under Section 142(1), dated 22.09.2021 was issued for calling the petitioner for filing of returns of income, to which the petitioner had replied that she has already filed the returns for the assessment year 2015-16. 7. The learned counsel further contends that the writ petition itself is not maintainable as statutory remedy is available for reddressal of grievances. It is also contended that there is no procedural lapse to the re-assessment is concerned. No case has been made out by the petitioner for violation of any principles of natural justice or non-providing of fair opportunity. Therefore, he contends that notice issued is perfectly in accordance with law and the guidelines laid down by the Hon’ble Apex Court in the Judgments stated therein in the statement of objections relied by the respondent. It is not in dispute that the Hon’ble Apex Court has reiterated that the notice issued under Section 148 of the IT Act would be read as Section 148A of the IT Act in the case of Union of India and Others vs. Ashish Agarwal, reported in (2023) 1 SCC 617 the Hon’ble Apex Court has substituted and modified the common judgment and order passed by the High Court of Judicature at Allahabad in WT.No.524/2021 and other allied tax appeals to read Section 148 of the IT Act as Section 148A of the IT Act. It is relevant to extract Section 148, 148(A) and 149(B)(iii) which read as under : “148. Issue of notice where income has escaped assessment. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: [Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.] Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: [Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.] Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,— (i)any information [***] in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; [(ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii)any information received under an agreement referred to in section 90 or section 90A of the Act; or referred to in section 90 or section 90A of the Act; or (iv)any information made available to the Assessing Officer under the scheme notified under section 135A; or Officer under the scheme notified under section 135A; or (v)any information which requires action in consequence of the order of a Tribunal or a Court.] consequence of the order of a Tribunal or a Court.] Explanation 2.—For the purposes of this section, where,— (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii)a survey is conducted under section 133A, other than under sub-section (2A) [***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or than under sub-section (2A) [***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.] Conducting inquiry, providing opportunity before issueof noticeunder section 148. 148A. The Assessing Officer shall, before issuing any notice under section 148,— (a)conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b)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 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); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,— Provided that the provisions of this section shall not apply in a case where,— (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 2[relate to, the assessee; or approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 2[relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.] [Time limit for notice. 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) x x x x x (b) x x x x x (i) x x x x x (ii) x x x x x (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more;]” 8. It is not in dispute that in the present case, the taxable income is less than Rs.50,00,000/-. In the document issued by the respondent at Annexure-F, the Department has provided reasoning for initiation of re-opening of the assessment for taxation stating that “the stamp duty valuation of the immovable property and the provisions of Section 50C of the IT Act clearly attracts in this case for determining capital gains. This clearly shows that there arose income from capital gains and the same has not been disclosed in the ITR filed by the assessee. The total income arising out of the transaction is Rs.28,47,000/- for the purpose of determining the capital gain which has escaped assessment”. However, on careful perusal of Section 149(1)(b)(iii) which is stated supra, it clearly states that no notice under Section 148 of the IT Act shall be issued for the - 13 - - 13 - relevant assessment year which has escaped assessment amount which is Rs.50,00,000/- or more. Therefore, the present case would not fall within the category for issuance of notice under Section 149 of the IT Act accordingly, even notice under Section 148 of the IT Act would not sustain. Even according to the respondent, escaped assessment is Rs.28,47,000/- which would not fall within the meaning of Section 149(1)(b). Under the circumstances, the petitioner has made out a valid ground for this Court to interfere with notice issued by the respondent. Accordingly, the petition deserves to be allowed. Hence, I pass the following : ORDER (i) Writ petition is allowed. (ii) Writ of certiorari is issued by quashing the notice dated 30.06.2021 vide No.ITBA/AST/ S/148/2021-22/ 1033896939(1) issued by the Income Tax Officer, Ward 1(1), Hubli at Annexure-B. CKK CT:BCK List No.: 1 Sl No.: 31 Sd/- JUDGE