Wp/20881/2023 Of Sanjieth Sachidananda Shetty v. The Income Tax Officer

Digitallysigned byNARASIMHAMURTHYVANAMALALocation:HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26 DAY OF OCTOBER,2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO.20881 OF 2023(T-IT) BETWEEN: SANJIETH SACHIDANANDA SHETTY AGED ABOUT 47 YEARS S/O SACHIDANANDA SHETTY ASHRITHA COMPLEX SAKLESHPUR, HASSAN-573134 …PETITIONER (BY SRI. RAVI SHANKAR S V.,ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD-1 AND TPS OFFICE OF THE INCOME TAX AAYAKAR BHAVAN, 2 STAGE BELUR ROAD, HASSAN-573201. OFFICE OF THE INCOME TAX AAYAKAR BHAVAN, 2 STAGE BELUR ROAD, HASSAN-573201. 2. NATIONAL FACELESS ASSESSMENT CENTRE ADDITIONAL/JOINT/DEPUTY/ASSISTANT ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX DEPARTMENT MINISTRY OF FINANCE MINISTRY OF FINANCE ROOM NO.401, 2 FLOOR, E-RAMP JAWAHARLAL NEHRU STADIUM DELHI-110003. JAWAHARLAL NEHRU STADIUM DELHI-110003. …RESPONDENTS (BY SRI.M. DILIP., ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO i) QUASH THE NOTICE UNDER SECTION 148A(B) OF THE ACT DATED 23/03/2022 BEARING DIN NO. ITBA/AST/F/ 148A(SCN)/ 2021-22/ 1041312304(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A. ii) QUASHING THE NOTICE UNDER SECTION 148A(D) OF THE ACT DATED 31/03/2022 BEARING DIN NO. ITBA/ AST/ F/ 148A/ 2021-22/ 1042299281(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A1. iii) QUASHING THE NOTICE UNDER SECTION 148 OF THE ACT DATED 31/03/2022 BEARING DIN NO. ITBA/ AST/ S/ 148-1/ 2021-22/ 1042299560(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A2. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has called in question, amongst others, the order dated 31.03.2022 [Annexure-A1] under Section 148A(d) of the Income Tax Act, 1961 [for short, ‘the IT Act’], the notice dated 31.03.2022 [Annexure-A2] under Section 148 of the IT Act and the order dated 21.03.2023 [Annexure-A3] under Section 147 of the IT Act read with Section 144 of the IT Act. The petitioner has also called in question the - 3 - penalty orders dated 28.08.2023 and 24.08.2023 [Annexures – A4 and A5]. The petitioner’s primary grievance against these orders is on the ground of lack of reasonable opportunity. 2.Sri Ravi Shankar S.V., the learned counsel for the petitioner, and Sri M. Dilip, the learned counsel for the respondents, are heard for the final disposal of the petition. It is undisputed that the notice under Section 148A(b) of the IT Act for the assessment year 2015-16 is issued on 23.03.2022 asserting that the petitioner has not filed ITR for the assessment year 2015-16 and there are transactions in excess of Rs.2,00,00,000/- during the financial year 2014-15. 3.The petitioner contents that the notices under Section 148A(b) of the IT Act, as also the order under Section 148A(d) of the IT Act, are addressed to the petitioner’s Income Tax Professional who is no longer in practice and therefore, the petitioner did not have reasonable opportunity. The petitioner also contends that if such opportunity is available, he would have demonstrated that the petitioner and his wife have purchased two immovable properties on 02.06.2014 and 03.12.2014 respectively availing financial assistance from State Bank of India, Sakleshpur and M/s. Subhagruha Housing Loans, Belur and that there is duplication of consideration to conclude that Rs.2,00,00,000/- has escaped income tax. The petitioner, to support these contentions, relies upon the sale deeds as also on the respective bank statements. have reasonable opportunity. The petitioner also contends that if such opportunity is available, he would have demonstrated that the petitioner and his wife have purchased two immovable properties on 02.06.2014 and 03.12.2014 respectively availing financial assistance from State Bank of India, Sakleshpur and M/s. Subhagruha Housing Loans, Belur and that there is duplication of consideration to conclude that Rs.2,00,00,000/- has escaped income tax. The petitioner, to support these contentions, relies upon the sale deeds as also on the respective bank statements. 4.The petitioner’s contention that the notices were addressed to his Income Tax Professional is not seriously disputed. If indeed the petitioner is not served with notice and there could be explanation as regards the transaction, the proceedings under Section 147 of the IT Act may not be justified. Therefore, there must be reconsideration and hence, the following: ORDER [a] The petition is allowed in part and the impugned order dated 31.03.2022 [Annexure-A1], the notice dated 31.03.2022 [Annexure-A2], the order dated 21.03.2023 [Annexure-A3] and the consequential penalty orders dated 24.08.2023 and 28.08.2023 [Annexures – A5 and A4] are quashed restoring the proceedings for reconsideration under Section 148A(d) of the I.T. Act. [b] The petitioner will be at liberty, within a period of three weeks from the date of receipt of a certified copy of this order, to file on his own initiative the details of the disbursement of the loan by the Bank/society Loan and the utilization thereof. The respondents shall consider the same before proceeding to pass the order under Section 148A(d) of the IT Act. It is needless to observe that if there is any delay in opening of the portal to enable the petitioner to file details, there shall be corresponding extension of time viz., three weeks from the date of opening of the portal. SD/- JUDGE SA ct:sr