Wp/10722/2022 Of Bhageerathi Bai Narayana Rao Maanay Charities v. Income Tax Officer

IN THE HIGH COURT OF KARNATAKA, BENGALURUDATED THIS THE 11 DAY OF AUGUST, 2022 BEFORE THE HON BLE MR.JUSTICE S.R.KRISHNA KUMAR)!WRIT PETITION No. 10722 OF 2022 (TIT) BETWEEN: BHAGEERAT! HI! BAI NARAYANA RAO MAANAY CHARITIREPRESENTED BY NARAYANA RAO MAANAY,.HAVING OFFICE AI-PB NO. /087,2 CROSS, 12 MAIN ROAD,BANASHANKARI IIND STAGE,BANGALORE-5D60 0/0. ... PETITION (BY SRI. CHALLA KODANDARAM., SENIOR COUNSEL FORMS. JYOTHI RATNA ANUMOLU., ADVOCATES)|MS. JYOTHI RATNA ANUMOLU., ADVOCATES)| AND: 1.INCOME TAX OFFICER|ITO (EXEMPTIONS) WARD 1,09, HMI BHAVAN, 3 FLOOR,BALLARI ROAD, DENA BANK COLONY,|GANGANAGAR,,BANGALORE-560 032.ITO (EXEMPTIONS) WARD 1,09, HMI BHAVAN, 3 FLOOR,BALLARI ROAD, DENA BANK COLONY,|GANGANAGAR,,BANGALORE-560 032. DDPRINCIPAL COMMISSIONER OF INCOME TAX(EXEMPTIONS) ROOM NO.2602, E2,CIVIC CENTRE, NEW DELHI-110002.|(EXEMPTIONS) ROOM NO.2602, E2,CIVIC CENTRE, NEW DELHI-110002.| 3.UNION OF INDIA|THROUGH-CENTRAL BOARD OF DIRECT TAXESDEPARTMENT OF REVENUE, MINISTRY OF FINANCE,|THROUGH-CENTRAL BOARD OF DIRECT TAXESDEPARTMENT OF REVENUE, MINISTRY OF FINANCE,| NORTH BLOCK, NEW DELHI-110002. _ RESPONDENTS (BY SRI.K.V.ARAVIND., ADVOCATE), THIS W.P. IS FILED UNDER ARTICLE 226 OF THE.CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE. THE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER.SECTION 148A (B) OF THE INCOME TAX ACT, BY R-1ANNEXURE-A AND CONSEQUENT ORDER PASSED UNDER.SECTION 148A (D) OF THE INCOME TAX ACT DTD: 25.03.2022|PASSED BY R-1 ANNEXURE-B AND NOTICE ISSUED UNDER.SECTION 148 OF THE INCOME TAX ACT 1961 ANNEXURE-C BYR-1 AND NOTICE UNDER SECTION 142(1) OF THE INCOME TAX)AC] DID: 10.05.2022 BY R-1 ANNEXURE-D AND ALL OTHER.CONSEQUENTIAL PROCEEDINGS AND ETC.. THIS W.P. COMING ON FOR ORDERS THIS DAY, THE)COUR! MADE THE FOLLOWING:-| ORDER In this petition, petitioner has sought for the following reliefs'-. (i) Issue a writ, order or direction, in the|nature of Certiorari quashing and set aside theimpugned show cause notice issued undaersection 148A(b) of the Income lax Act bearingIT BA/AS 1/F/1T48A(SCN)/2021-22/1041051944 (dated19.03.2072byrespondent,No.7.at|(Annexure-A)and consequent order passedunder Section 148A(d) of the Income Tax Actbearing|orderNo.ITBA/AS[/F/148A/2077T22/1041536482(1) dated 25.03.2022 passed byrespondent No.7 at(Annexure-B)and Noticeissued under Section 148 of the [Income Tax Act,1967.bearing|ITBA/AST/S/1481/2027122/1041633313 (1) dated 26.03.2022 passed by|respondent No.7 at|(Annexure-C)and Noticeunder Section 142(1) of the Income Tax Act|bearing ITBA/AST/F/142(1)/2022-23/1042995658| (1) dated 10.05.2022 passed by respondent No.1at(Annexure-D)and all otner consequentialproceedings, (i!) Grant costs of the proceedings; anda (iii) Pass any such reliefs as this Hon’ble|Court deems fit, in the circumstances of the caseand in tne interest ofjustice and equity. 2. Heard sSri.Challa Kodandaram, learned Seniorcounsel appearing for Ms.Jyoti Ratna Anumolu for the|petitioner and Sri.K.V.Aravind, learned counsel for the|respondents — Revenue and perused the material on|record. 3. In aadition to reiterating the various contentionsurged In the petition and referring to the material on record,learned senior counsel for the petitioner invited my|attention to the impugned Notice dated 19.03.2022 issued|by the respondents under Section 148A(b) of the Income|Tax Act, 1961, (for snort ‘the |.1T.Act) in order to point out|that In the said Notice, the petitioner — assessee was calledupon to show cause with reference to two transactions|detailed in the Annexure to the said Notice. The petitioner|submitted its reply dated 22.03.2022 intimating the| 2. Heard sSri.Challa Kodandaram, learned Seniorcounsel appearing for Ms.Jyoti Ratna Anumolu for the|petitioner and Sri.K.V.Aravind, learned counsel for the|respondents — Revenue and perused the material on|record. 3. In aadition to reiterating the various contentionsurged In the petition and referring to the material on record,learned senior counsel for the petitioner invited my|attention to the impugned Notice dated 19.03.2022 issued|by the respondents under Section 148A(b) of the Income|Tax Act, 1961, (for snort ‘the |.1T.Act) in order to point out|that In the said Notice, the petitioner — assessee was calledupon to show cause with reference to two transactions|detailed in the Annexure to the said Notice. The petitioner|submitted its reply dated 22.03.2022 intimating the| respondents that he had already filed his returns for the|subject assessment year 2015 — 16 and enclosed a copy of|the same. Subsequently, the respondents passed the|Impugned order dated 25.03.2022 under Section 148A(q)|which was followed by the tmpugned notice dated|26.03.2022 under Section 148 of the |.7. Act as well as)subsequent notice dated 10.05.2022 issued under section|142(1) of the I.T. Act calling upon the petitioner to furnish /|produce accounts and documents on or before 17.05.2022.it is contended that on 17.05.2022, the petitioner submittedIts detailed reply to the respondents along with documents|and instead of accepting the same, respondents are|proceeding further in the matter. It is also pointed out that a|perusal of the Impugned notice under Section 148A(b)|dated 19.03.2022 will indicate that the same relates to only|two transactions, while the impugned order dated|29.03.2022 passed under Section 148A(q) Is In respect of|three transactions |.e., one additional transaction which was|not the subject matter of the notice issued under section|148A(b) referred to supra and consequently, the impugned|order dated 25.03.2022 and subsequent notices are illegal, arbitrary and without jurisdiction or authority of law and thesame being violative of principles of natural justice,|deserves to be quashed. 4. Per contra, learned counsel for the respondents —revenue submits that there is no merit in the petition and|that the same Is llable to be dismissed. oS. | have given my anxious consideration to the rivalsubmissions and perused the material on record. 6. As rightly contended by the learned Seniorcounsel for the petitioner, a perusal of the Impugned notice|dated 19.03.2022 issued under Section 148A(b) of the|1.1.Act will indicate that the same Is restricted to only two.transactions as detailed in the Annexure, while theimpugned order dated 29.03.2022 Is in relation to an|additional transaction which was never the subject matter|of the notice referred to supra. The material on record also|discloses that despite the petitioner submitting tts detailed|reply to the notices, the same have not been considered by the respondents either at the time of passing the impugned orders or at the time of issuing the subsequent notices.|Under these circumstances, | am of the considered opinionthat the Impugned order dated 25.03.2022 as well as the|subsequent notices dated 26.03.2022 and 10.05.2022 are|illegal, arbitrary and violative of principles of natural justice|and the same deserve to be quashed and liberty reserved|in favour of the respondents to proceed further in|accordance with law, pursuant to the notice dated|19.03.2022 after providing sufficient opportunity to thepetitioner and hearing him in accordance with law. f. In the result, | pass the following:-| ORDER (i) Petition is hereby allowed. (ii) The impugned order at Annexure-B dated29.03.2022 and the impugned Notice at Annexure-C dated|26.03.2022, both passed / issued by the 1 respondent as"well as the impugned notice at Annexure-D dated|10.05.2022 issued by the 2[na]respondent are herebyquashed. f. In the result, | pass the following:-| ORDER (i) Petition is hereby allowed. (ii) The impugned order at Annexure-B dated29.03.2022 and the impugned Notice at Annexure-C dated|26.03.2022, both passed / issued by the 1 respondent as"well as the impugned notice at Annexure-D dated|10.05.2022 issued by the 2[na]respondent are herebyquashed. (ili) Liberty is reserved in favour of the concernedrespondents to proceed further in accordance with law|pursuant to the notice dated 19.03.2022 vide Annexure-A|Issued under section 148A(b) of the |.1.Act and pass|appropriate orders after providing sufficient opportunity andhearing the petitioner in accordance with law. (iv) Liberty Is also reserved in favour of the petitionerto submit additional pleadings, reply, documents etc..,before the respondents, who shall consider the same and_proceed further as stated supra. (v) All rival contentions between the parties are keptopen and no opinion is expressed on the same. Srl. Sd/- JUDGE.