Wp/201029/2024 Of Anand Kumar Somasheshekarayya Lonarmath v. The Income Tax Officer And Ors

Digitally signed byBASALINGAPPASHIVARAJDHUTTARGAONLocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC-K:7469WP No. 201029 of 2024 ® IN THE HIGH COURT OF KARNATAKA,KALABURAGI BENCH| DATED THIS THE 27 DAY OF SEPTEMBER, 2024 |BEFORE.THE HON'BLE MR. JUSTICE SURAJ] GOVINDARA);WRIT PETITION NO. 201029 OF 2024 (TIT) BETWEEN: ANAND KUMAR SOMASHESHEKARAYYA LONARMATH|NO.15/7 TEACHERS COLONYNEAR ASHRAMBLD E ROADBIJAPUR-586103PREVIOUSLY ATSAVANAHALLI BIJAPURBIJAPUR-586148. _ PETITIONER (BY SRI. RAVI SHANKAR S. V., ADVOCATE) AND: 1.THE INCOME TAX OFFICER |WARD -1L AND TPSATHANI ROADVIJAYAPURA-586104.,WARD -1L AND TPSATHANI ROADVIJAYAPURA-586104., 2DNATIONAL FACELESS ASSESSEMENT CENTRE.ADDITIONAL/ JOINT/DEPUTY/ASSISTANT COMMISSIONER.OF INCOME TAX/INCOME TAX OFFICERINCOME TAX DEPARTMENT _MINISTRY OF FINANCE ©ROOM NO.401 7 FLOOR E-RAMP |JAWAHARLAL NEHRU STADIUMDELHI-110003.ADDITIONAL/ JOINT/DEPUTY/ASSISTANT COMMISSIONER.OF INCOME TAX/INCOME TAX OFFICERINCOME TAX DEPARTMENT _MINISTRY OF FINANCE ©ROOM NO.401 7 FLOOR E-RAMP |JAWAHARLAL NEHRU STADIUMDELHI-110003. 3.THE PRINCIPAL CHIEF COMMISSIONER|OF INCOME TAX CR BUILDINGQUEENS ROAD, BENGALURU-560001.OF INCOME TAX CR BUILDINGQUEENS ROAD, BENGALURU-560001. RESPONDENTS (BY SRI. M THIRUMALESH, ADVOCATE) THIS WRIT PETITION FILED UNDER ARTICLES 22726 AND 27OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF|CERTIORARI OR DIRECTION IN THE NATURE OF WRIT OF|CERTIORARI QUASHING THE NOTICE UNDER SECTION 148A(b) OF|THE INCOME TAX ACT, 1961 DATED 20.03.2022 BEARING DIN)ITBA/AST/ F/ 148(A)(SCN)/ 2021-22/ 104109477(1) ISSUED BY THE|RESPONDENT NO.1L FOR THE ASSESSMENT YEAR 2015-16 WHICH [SENCLOSED AS ANNEXURE-A AND ETC. THIS|WRIT PETITION, COMING ONFOR PRELIMINARYHEARING IN “B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS|UNDER:| CORAM:HON'BLE MR. JUSTICE SURAJ GOVINDARAJ ORAL ORDER (PER: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ) 1.The petitioner is before this Court seeking for the following reliefs: 1.Issue a writ of Certiorarit or direction in the nature ofa writ of Certiorari quashing the notice under|Section 148(b) of the Act dated 20.03.2022 bearingDIN-No. ITBA/AST/F/148A(SCN)/2027122/101094771(1) issued by the Respondent No.1|for the assessment year 2015-16 nerein marked asAnnexure-A;a writ of Certiorari quashing the notice under|Section 148(b) of the Act dated 20.03.2022 bearingDIN-No. ITBA/AST/F/148A(SCN)/2027122/101094771(1) issued by the Respondent No.1|for the assessment year 2015-16 nerein marked asAnnexure-A; 2 Issue a Writ of Certiorari or direction in the neture|of writ of Certiorari quashing the order under|Section 148A(d) of the Act dated 06.04.2022|bearing|DIN-No. ITBA/AST/F/148A/202223/1042547184(1) issued by the respondent No.1.for the assessment year 2015-16 herein marked asAnnexure-Al.of writ of Certiorari quashing the order under|Section 148A(d) of the Act dated 06.04.2022|bearing|DIN-No. ITBA/AST/F/148A/202223/1042547184(1) issued by the respondent No.1.for the assessment year 2015-16 herein marked asAnnexure-Al. 3,Issue a writ of certiorari or Girection in the nature of|writ of Certiorari quashing the notice under Section148 of the Act dated O7.04.2022 bearing DIN|writ of Certiorari quashing the notice under Section148 of the Act dated O7.04.2022 bearing DIN| No. ITBA/AST/S/148_1/2022-23/1042609600(1)issued by the respondent No.1 for the assessment|year 2015-16 herein marked as Annexure-A2. 4 Issue a writ of Certiorarit or direction in the nature ofwrit of Certiorari qguashing the order passed U/s 147[.W.S|144Bdated20,07,7074bearingNo. ITBA/AST/S/147/2023-24/106122/696(1) issued bythe respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A>3.writ of Certiorari qguashing the order passed U/s 147[.W.S|144Bdated20,07,7074bearingNo. ITBA/AST/S/147/2023-24/106122/696(1) issued bythe respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A>3. No. ITBA/AST/S/148_1/2022-23/1042609600(1)issued by the respondent No.1 for the assessment|year 2015-16 herein marked as Annexure-A2. 4 Issue a writ of Certiorarit or direction in the nature ofwrit of Certiorari qguashing the order passed U/s 147[.W.S|144Bdated20,07,7074bearingNo. ITBA/AST/S/147/2023-24/106122/696(1) issued bythe respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A>3.writ of Certiorari qguashing the order passed U/s 147[.W.S|144Bdated20,07,7074bearingNo. ITBA/AST/S/147/2023-24/106122/696(1) issued bythe respondent No.2 for the assessment year 2015-16 herein marked as Annexure-A>3. 5,Issue a writ of Certiorari or direction in the nature Of|writ of Certiorari quashning the penalty notice Under|Section 2/71(1)(c) of the Act dated 20.02.2024bearing|DINNo. ITBA/PNL/S/271(1)(c)/202324/106122/7/719(1) issued by the respondent No.2for the assessment year 2015-16 herein marked asAnnexure-Ad.writ of Certiorari quashning the penalty notice Under|Section 2/71(1)(c) of the Act dated 20.02.2024bearing|DINNo. ITBA/PNL/S/271(1)(c)/202324/106122/7/719(1) issued by the respondent No.2for the assessment year 2015-16 herein marked asAnnexure-Ad. 6.Issue a writ of Certiorari or direction in the nature Of|writ of Certiorari quashing tne penaity notice dated20.02.2024 passed U/S 2/71F of the Act bearing DIN|andNoticeNo. ITBA/PNL/S/271F/2023-24/106122/7/720(1) by the Respondent No.2 for thAssessmentYear2015-16hereinmarkeddS|Annexure-Ad5.writ of Certiorari quashing tne penaity notice dated20.02.2024 passed U/S 2/71F of the Act bearing DIN|andNoticeNo. ITBA/PNL/S/271F/2023-24/106122/7/720(1) by the Respondent No.2 for thAssessmentYear2015-16hereinmarkeddS|Annexure-Ad5. J Pass such otner orders as this Hon’ble Court deems|fit ana proper in the interest ofjustice and eguity.fit ana proper in the interest ofjustice and eguity. 2.Tne petitioner claims to be an individual presently a| retired teacher. During the assessment year 2015- 16; he had offered an income of Rs.2,/78,620/- after deduction. However, the assessment for the year} 2015-16 was sought to be reopened on the ground| that as per the information made available to the) NC: 2024:KHC-K:7469WP No. 201029 of 2024 revenue, there is a cash deposit made in excess ofRs.50 lakns. The petitioner replied to the same on23.3.2022 within three days and submitted all the)documents including the statement of account of the|particular bank account as regards which theallegation was made, contending that it is only one}Dank account that the petitioner has and operatesand the cash deposit made in the said account is only|a sum of Rs.27,45,000/- which is on account of the|return of hand loans made earlier. — 3.In the assessment order which Nas been passed on|20.2.2024,aftertakingintoaCccounyall|the|submissions and the documents submitted by the)petitioner, the final computation of taxable incomewhich Nas been arrived at even after taking into)account the cash deposit of Rs.27,45,000/- is agrand total of Rs.30,23,623/- whicn has been)assessed under Section 14/7 read with Section 144Bof the Income Tax Act 1981 and as such, penalty|proceedings under Section 274 read witn Section 271.20.2.2024,aftertakingintoaCccounyall|the|submissions and the documents submitted by the)petitioner, the final computation of taxable incomewhich Nas been arrived at even after taking into)account the cash deposit of Rs.27,45,000/- is agrand total of Rs.30,23,623/- whicn has been)assessed under Section 14/7 read with Section 144Bof the Income Tax Act 1981 and as such, penalty|proceedings under Section 274 read witn Section 271. NC: 2024:KHC-K:7469WP No. 201029 of 2024 (1)(c) and Section 274 read with Section 271(f) were| initiated and notices were issued separately. It is|challenging same, that the petitioner is before this|Court seeking for the aforesaid reliefs. ©challenging same, that the petitioner is before this|Court seeking for the aforesaid reliefs. © NC: 2024:KHC-K:7469WP No. 201029 of 2024 (1)(c) and Section 274 read with Section 271(f) were| initiated and notices were issued separately. It is|challenging same, that the petitioner is before this|Court seeking for the aforesaid reliefs. ©challenging same, that the petitioner is before this|Court seeking for the aforesaid reliefs. © 4Tne submission of Sri.Ravi Shankar.S.V., learned|counsel for the petitioner is that; counsel for the petitioner is that; 41In terms of Section 149 of the Income Tax Act,any notice issued or proceedings initiated under|Section 148 for the relevant assessment year|within a period of three years from the end of)the relevant assessment year, unless the same)would come under clause (b) of sub Section (1)|of Section 149 thereof whicn provides for)extended period of ten years in the event of the qocuments or evidence revealing that the)income chargeable represent in form of an)asset in respect of a transaction or entry in the)pDooks of accounts Is available with the revenue. any notice issued or proceedings initiated under|Section 148 for the relevant assessment year|within a period of three years from the end of)the relevant assessment year, unless the same)would come under clause (b) of sub Section (1)|of Section 149 thereof whicn provides for)extended period of ten years in the event of the qocuments or evidence revealing that the)income chargeable represent in form of an)asset in respect of a transaction or entry in the)pDooks of accounts Is available with the revenue. 4)Even if, assuming that the statement of account|OT tnepankACCOUNT|maintainedDYtheOT tnepankACCOUNT|maintainedDYthe NC: 2024:KHC-K:7469WP No. 201029 of 2024 petitioner would qualify clause (D) of subSection (1) of Section 149. The9A5CDOWET—under.the|Sa ldprovisioncOoUuIDe|onlyexercised, if the escaped assessment amount is|more than Rs.50 lakh of rupees, if so done}beyond 3 years. | 4 3,In the present case, the assessment order itself|reflectingtneassessment.madeLO de|Rs.30,23,623/- DY|including tneescapedassessment of Rs.27,45,000/- on account of analleged unexplained cash deposit being within|the|thresholdlimit|ofRs.50lakhs,NO|proceedings under Section 148, let alone)penalty proceedings, could have been initiated|by the revenue. On that ground, ne submits|that the above petition is required to be allowed|reflectingtneassessment.madeLO de|Rs.30,23,623/- DY|including tneescapedassessment of Rs.27,45,000/- on account of analleged unexplained cash deposit being within|the|thresholdlimit|ofRs.50lakhs,NO|proceedings under Section 148, let alone)penalty proceedings, could have been initiated|by the revenue. On that ground, ne submits|that the above petition is required to be allowed| and the relief sought for granted. 5.Sri.Thirumalesn.M., learned counsel for revenue|would submit that the order is anappealable order|under Section 246 and therefore the petitionerwould submit that the order is anappealable order|under Section 246 and therefore the petitioner NC: 2024:KHC-K:7469WP No. 201029 of 2024 naving alternative efficacious remedy could always approach the appellate authority challenging the)order, if ne nas any grievance.order, if ne nas any grievance. 6.Heard Sri.Ravi Shankar.S.V., Learned counsel for thepetitioner and Sri.Tnirumalesh.M., learned counselfor revenue and perused papers.petitioner and Sri.Tnirumalesh.M., learned counselfor revenue and perused papers. /.Insofar as the alternative efficacious remedy is|concerned, Sri.Ravi Shankar.S.V., learned counsel for|the petitioner submits that in order to avail the said|remedy, the petitioner would have to make depositconcerned, Sri.Ravi Shankar.S.V., learned counsel for|the petitioner submits that in order to avail the said|remedy, the petitioner would have to make deposit NC: 2024:KHC-K:7469WP No. 201029 of 2024 naving alternative efficacious remedy could always approach the appellate authority challenging the)order, if ne nas any grievance.order, if ne nas any grievance. 6.Heard Sri.Ravi Shankar.S.V., Learned counsel for thepetitioner and Sri.Tnirumalesh.M., learned counselfor revenue and perused papers.petitioner and Sri.Tnirumalesh.M., learned counselfor revenue and perused papers. /.Insofar as the alternative efficacious remedy is|concerned, Sri.Ravi Shankar.S.V., learned counsel for|the petitioner submits that in order to avail the said|remedy, the petitioner would have to make depositconcerned, Sri.Ravi Shankar.S.V., learned counsel for|the petitioner submits that in order to avail the said|remedy, the petitioner would have to make deposit of 20% of the amount demanded when in fact onmerits it is not due. Therefore, he submits that theSaid a remedy under Section 246 though maybe ansalternative remedy is not an efficacious remedy for a|person like the petitioner who is a retired teacherwho does not have any amounts left with him after a|gap of nearly eight years, nis submission is accepted. |merits it is not due. Therefore, he submits that theSaid a remedy under Section 246 though maybe ansalternative remedy is not an efficacious remedy for a|person like the petitioner who is a retired teacherwho does not have any amounts left with him after a|gap of nearly eight years, nis submission is accepted. | 8.On merits, what is required to be seen is theapplicability of Section 149 of Income Tax Act, whichrelates to the time limit for issuance of notice. Tne.applicability of Section 149 of Income Tax Act, whichrelates to the time limit for issuance of notice. Tne. NC: 2024:KHC-K:7469WP No. 201029 of 2024 said Section 149 is reproduced hereunder for easy| reference; 149, Time [imit for notice: (1)No notice under section 148 shall be issued forthe relevant assessment year,— (aj)if three years have elapsed from the end of therelevant assessment year, unless the case fallsunder clause (b); (b) if three years, but not more than ten years,have elapsed from the end of the relevantassessment year unless the Assessing Officer hasin his possession books of account or otherdocuments or evidence whicn reveal that theincome chargeable to tax, represented in the formof— (Dan asset;| (ii)expenditure in respect of a transaction or.in relation to an event or occasion; or (iijan entry or entries in the books ofaccount, which has escaped assessment|amounts to or Is likely to amount to fifty lakhrupees OF fnore. Provided that no notice Under section 148|Shall be tssued at any time in a case for the|relevant assessment year beginning on or before|ist day of April, 2021, if [a notice under section|148 or section 153A or section 153C could not havebeen issued at that time on account of being|beyond the time limit specified under the provisionsof clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be],aS|they.stoodimmediatelybeforethecommencement of the Finance Act, 2021: Provided further that the provisions of this—sub-section snall not apply in a case, where a}notice under section 153A, or section 153C read| NC: 2024:KHC-K:7469WP No. 201029 of 2024 with section 155A, is requireq to be issued in|relation to a searcn initiated Under section 137 or|books of account, other qocuments or any assets|reguisitioned under section 132A, on or before the|31st day of March, 2021: Provided also that for the purposes ofcomputing the period of limitation as per this|section, the time or extended time allowed to the|assessee, as per show-cause notice issued under|clause (Db) of section 148A or the period duringwnicn the proceeding under section 148A Is stayed|by an order or injunction of any court, shall be|excluded: Provided further that the provisions of this—sub-section snall not apply in a case, where a}notice under section 153A, or section 153C read| NC: 2024:KHC-K:7469WP No. 201029 of 2024 with section 155A, is requireq to be issued in|relation to a searcn initiated Under section 137 or|books of account, other qocuments or any assets|reguisitioned under section 132A, on or before the|31st day of March, 2021: Provided also that for the purposes ofcomputing the period of limitation as per this|section, the time or extended time allowed to the|assessee, as per show-cause notice issued under|clause (Db) of section 148A or the period duringwnicn the proceeding under section 148A Is stayed|by an order or injunction of any court, shall be|excluded: Provided also that where immediately after|the exclusion of the period referred to in the|immediately preceding proviso, the period. oflimitation available to the Assessing Officer for|passing an order under clause (d) of section 148A|is less than seven days, such remaining period shallbe extended to seven days and the period of|limitation under this sub-section shnal| be deemed fobe extended accordingly. Explanation.—For the purposes of clause (b)|of this subsection, "asset" shall include immovable|property, being land or building or botn, shares andsecurities, loans and aavances, deposits in bank|account. (1A) Notwithstanding anything contained in|sub-section (1), where the income chargeable to tax represented in the form of an asset or|expenditure in relation to an event or occasion of the value referred to in clause (b) of sub-section|(1),hasescapedtheassessmen..andtheinvestment in sucn asset or expenditure in relation|to such event or occasion has peen meade orincurred, in more than one previous years relevant|to the assessment years within the period referred|to in clause (b) of sub-section (1), a notice under|section 148 shall be issued for every’ suchassessment year for assessment, reassessment or recomputation, as the case may De. NC: 2024:KHC-K:7469WP No. 201029 of 2024 (2)The provisions of sub-section (1) as to the|issue of notice shall be subject to the provisions ofsection 15]. QOIn terms of clause (a) of sub-Section (1) of Section|149 a period of three years has been fixed from the)end of the relevant assessment year for initiating|proceedings under Section 148. However, ansexception has been carved out under clause (Db) ofsub-Section (1) of Section 149 extending the 1said|period by up to ten years, if there is a document orevidence which reveals escaped assessment as)detailed under sub-Clause (i), (ii) and (ili) of clause|(b) of sub Section (1) of Section 149.149 a period of three years has been fixed from the)end of the relevant assessment year for initiating|proceedings under Section 148. However, ansexception has been carved out under clause (Db) ofsub-Section (1) of Section 149 extending the 1said|period by up to ten years, if there is a document orevidence which reveals escaped assessment as)detailed under sub-Clause (i), (ii) and (ili) of clause|(b) of sub Section (1) of Section 149. 10.In the present case, though it can be said that the|entry in this statement of bank account, is a#document wnicn would satisfy Clause (bD) of subsection 1 of Section 149. The powers which can be)excised in a said clause are injuncted and restricted|by imposing a minimum threshold limit of Rs.50—lakns of rupees. |entry in this statement of bank account, is a#document wnicn would satisfy Clause (bD) of subsection 1 of Section 149. The powers which can be)excised in a said clause are injuncted and restricted|by imposing a minimum threshold limit of Rs.50—lakns of rupees. | NC: 2024:KHC-K:7469WP No. 201029 of 2024 11. 10.In the present case, though it can be said that the|entry in this statement of bank account, is a#document wnicn would satisfy Clause (bD) of subsection 1 of Section 149. The powers which can be)excised in a said clause are injuncted and restricted|by imposing a minimum threshold limit of Rs.50—lakns of rupees. |entry in this statement of bank account, is a#document wnicn would satisfy Clause (bD) of subsection 1 of Section 149. The powers which can be)excised in a said clause are injuncted and restricted|by imposing a minimum threshold limit of Rs.50—lakns of rupees. | NC: 2024:KHC-K:7469WP No. 201029 of 2024 11. Admittedly, the assessment order nas been passed|for a sum of Rs.30,23,623/- which is much less than|the threshold limit of Rs.50 lakhs. The revenue would.not have any authority or jurisdiction to issue anotice under Section 148 if the thresnold |imit ofRs.50laknsIS.NOTShown.LO naveescapedassessment beyond 3 years of the assessment. The)assessment order in the present case showing the)escaped assessment to be Rs.30,23,623/- being)within the threshold limits as held supra. No powers|under Section 148 could be exercised. |for a sum of Rs.30,23,623/- which is much less than|the threshold limit of Rs.50 lakhs. The revenue would.not have any authority or jurisdiction to issue anotice under Section 148 if the thresnold |imit ofRs.50laknsIS.NOTShown.LO naveescapedassessment beyond 3 years of the assessment. The)assessment order in the present case showing the)escaped assessment to be Rs.30,23,623/- being)within the threshold limits as held supra. No powers|under Section 148 could be exercised. | 17.In that view of the matter, I pass the following; ORDER The writ petition isallowed. A Certiorari is issued, the notice under Section.148(b) of the Act dated 20.03.2022 bearingDIN.NO.|ITBA/AST/F/148A(SCN )/2021-22/101094771(1) issued by the Respondent No.1.for the assessment year 2015-16 at Annexure-148(b) of the Act dated 20.03.2022 bearingDIN.NO.|ITBA/AST/F/148A(SCN )/2021-22/101094771(1) issued by the Respondent No.1.for the assessment year 2015-16 at Annexure- NC: 2024:KHC-K:7469WP No. 201029 of 2024 A, the order under Section 148A(d) of the Act)dated 06.04.2022 bearing DIN No.ITBA/AST/F/|148A/2022-23/1042547184(1) issued by therespondent No.1 for the assessment year 2015-16 at Annexure-Al, the notice under Section|148 of the Act dated 07.04.2022 bearing DIN.No.ITBA/AST/S/148_1/2022-3/1042609600(1) issued by the respondent No.1 for the}assessment year 2015-16 at Annexure-A2, theorder passed U/s 14/7 r.w.Ss 144B dated20.02.2024 bearing No.ITBA/AST/S/147/2023-24/1061227696(1) issued by the respondent.No.2 for the assessment year 2015-16 at|Annexure-A3, the penalty notice under Section |2/1(1)(c) of the Act dated 20.02.2024 bearing DIN.No.ITBA/PNL/S/271(1)(c)/2023-24/ 1061227719(1) issued by the respondent No.2.for|tne|assessment.Year2015-16nereinmarked as Annexure-A4 and the penalty noticedated 20.02.2024 passed u/s 271F of the Act NC: 2024:KHC-K:7469WP No. 201029 of 2024 bearingDIN|and|NoticeNO.. ITBA/PNL/S/271F/2023-24/1061227720(1)DY| the Respondent No.2 for the Assessment year| 2015-16 at Annexure-A5 are nereby quashed. — SR)List No.: 2 S| No.: 21 Sd/-(SURAJ GOVINDARAJ).JUDGE|