Wp/26080/2024 Of Mr. Mohammed Yaseen v. Income Tax Officer

Digitally signedby CHANDANAB MLocation: HighCourt ofKarnataka IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17 DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR -WRIT PETITION NO. 26080 OF 2024 (TIT) BETWEEN: MR. MOHAMMED YASEEN S/O MOHAMMED SHALLY AGED ABOUT 38 YEARS R/AT 4 CROSS 9T SHASTRY GARDEN TANK MOHALLA SHIMOGA-577201, KARNATAKA. ALSO AT: #33 FATEH REGENCY SRI RAMA MANDIR ROAD BASAVANAGUDI BANGALORE SOUTH BANGALORE-560004. …PETITIONER (BY SRI. SANDEEP HUILGOL, ADV.) AND: 1. INCOME TAX OFFICER WARD 1 & TPS, SHIMOGA NO.70, 100 FEET ROAD GOPALAGOWDA EXTENSION SHIVAMOGGA-577502. WARD 1 & TPS, SHIMOGA NO.70, 100 FEET ROAD GOPALAGOWDA EXTENSION SHIVAMOGGA-577502. 2. ASSESSMENT UNIT/VERIFICATION UNIT/TECHNICAL UNIT/REVIEW UNIT INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT, 2 FLOOR JAWAHARLAL NEHRU STADIUM NEW DELHI- 110003. UNIT/TECHNICAL UNIT/REVIEW UNIT INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE INCOME TAX DEPARTMENT, 2 FLOOR JAWAHARLAL NEHRU STADIUM NEW DELHI- 110003. NC: 2025:KHC:15975 3. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KARNATAKA AND GOA C.R. BUILDING, NO.1, QUEEN’S ROAD BENGALURU-560001. (BY SRI. M DILIP, ADV.) …RESPONDENTS THIS PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER BEARING NO DOCUMENT IDENTIFICATION NUMBER PASSED BY RESPONDENT NO. 1 UNDER SECTION 148A(D) OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2015-16 ANNEXURE A-1 QUASH THE IMPUGNED NOTICE BEARING DIN AND NOTICE NO. ITBA/AST/S/148_1/ 2022-23/1042426411(1) DATED 01.04.2022 ISSUED BY RESPONDENT NO.1 UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2015-16 ANNEXURE A-2 AND ETC., THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner seeks for the following reliefs: (i) Quashing the undated, unsigned impugned Order bearing no Document Identification Number passed by Respondent No.1 under Section 148(d) of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure’A-1);bearing no Document Identification Number passed by Respondent No.1 under Section 148(d) of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure’A-1); (ii) Quashing the impugned notice bearing DIN and Notice No. ITBA/ AST/ S/148_1/ 2022-23/ 1042426411(1) dated 01.04.2022 issued by Respondent No.1 under Section 148 of the Income-tax Act, 1961 for the Assessment year 2015-16 (Annexure ‘A-2’);Notice No. ITBA/ AST/ S/148_1/ 2022-23/ 1042426411(1) dated 01.04.2022 issued by Respondent No.1 under Section 148 of the Income-tax Act, 1961 for the Assessment year 2015-16 (Annexure ‘A-2’); (iii) Quashing the impugned Notice dated 15.03.2022 bearing DIN and Notice No.ITBA/AST/F/148A(SCN)/ 2021-22/104768406(1) issued by Respondent No.1 under Section 148A(b) of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘B’);bearing DIN and Notice No.ITBA/AST/F/148A(SCN)/ 2021-22/104768406(1) issued by Respondent No.1 under Section 148A(b) of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘B’); (iv) Quashing the impugned Assessment Order bearing DIN & Order No.ITBA/AST/S/147/2023-24/ 1062316215(1) dated 09.03.2024 passed by Respondent No.1 under Section 147 read with Section 144 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure “C-1’);DIN & Order No.ITBA/AST/S/147/2023-24/ 1062316215(1) dated 09.03.2024 passed by Respondent No.1 under Section 147 read with Section 144 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure “C-1’); (iv) Quashing the impugned Assessment Order bearing DIN & Order No.ITBA/AST/S/147/2023-24/ 1062316215(1) dated 09.03.2024 passed by Respondent No.1 under Section 147 read with Section 144 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure “C-1’);DIN & Order No.ITBA/AST/S/147/2023-24/ 1062316215(1) dated 09.03.2024 passed by Respondent No.1 under Section 147 read with Section 144 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure “C-1’); (v) Quashing the impugned computation sheet bearing DIN & Document No.ITBA/AST/S/114/2023-24/ 1062316308(1) dated 09.03.2024 issued by Respondent No.1 for the Assessment Year 2015-16 (Annexure-‘C-2);DIN & Document No.ITBA/AST/S/114/2023-24/ 1062316308(1) dated 09.03.2024 issued by Respondent No.1 for the Assessment Year 2015-16 (Annexure-‘C-2); Respondent No.1 for the Assessment Year 2015-16 (vi) Quashing the impugned Notice of Demand bearing DIN & Notice No. ITBA/ AST/S/ 156/ 2023-24/ 1062316330(1) dated 09.03.2024 issued by Respondent No.1 under Section 156 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘C-3’);DIN & Notice No. ITBA/ AST/S/ 156/ 2023-24/ 1062316330(1) dated 09.03.2024 issued by Respondent No.1 under Section 156 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘C-3’); (vii) Quashing the impugned penalty Order bearing DIN No. ITBA/ PNL/F/ 271(1)(c)/ 2024-25/ 1068037937(1) dated 27.08.2024 passed by Respondent No.1 under Section 271(1)(c) of the Income-tax Act, 196, for the Assessment Year 2015-15 (Annexure ‘D-1’);No. ITBA/ PNL/F/ 271(1)(c)/ 2024-25/ 1068037937(1) dated 27.08.2024 passed by Respondent No.1 under Section 271(1)(c) of the Income-tax Act, 196, for the Assessment Year 2015-15 (Annexure ‘D-1’); (viii) Quashing the impugned computation sheet bearing DIN & Document No.ITBA/PNL/S/271(1)(c)/20 23-DIN & Document No.ITBA/PNL/S/271(1)(c)/20 23- 24/1062316346(1) dated 27.08.2024 issued by Respondent No.1 for the Assessment Year 2015-16 (Annexure ‘D-2’); (ix) Quashing the impugned Notice of Demand bearing DIN & Notice No. ITBA/ PNL/S/ 156/ 2024-25/ 1068037718(1) dated 27.08.2024 issued by Respondent No.1 under Section 156 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘D-3’);DIN & Notice No. ITBA/ PNL/S/ 156/ 2024-25/ 1068037718(1) dated 27.08.2024 issued by Respondent No.1 under Section 156 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘D-3’); (x) Quashing the impugned Penalty Order bearing DIN No.ITBA/PNL/F/271F/2024-25/1068065687(1) dated 27.08.2024 passed by Respondent No.1 under Section 271F of the Income-tax Act, 1961, for the Assessment Year 2015-15 (Annexure ‘E-1’);No.ITBA/PNL/F/271F/2024-25/1068065687(1) dated 27.08.2024 passed by Respondent No.1 under Section 271F of the Income-tax Act, 1961, for the Assessment Year 2015-15 (Annexure ‘E-1’); (xi) Quashing the impugned computation sheet bearing DIN & Document No. ITBA/ PNL/S/ 271F/ 2023-24/ 1062316032(1) dated 27.08.2024 issued by DIN & Document No. ITBA/ PNL/S/ 271F/ 2023-24/ 1062316032(1) dated 27.08.2024 issued by Respondent No.1 for the Assessment year 2015-16 (Annexure ‘E-2’); (xii) Quashing the impugned Notice of Demand bearing DIN & Notice No. ITBA/ PNL/ S/ 156/ 2024-25/ 1068065323(1) dated 27.08.2024 issued by Respondent No.1 under Section 156 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘E-3’) and DIN & Notice No. ITBA/ PNL/ S/ 156/ 2024-25/ 1068065323(1) dated 27.08.2024 issued by Respondent No.1 under Section 156 of the Income-tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘E-3’) and (xiii) Pass such order that Hon’ble Court, may seem fit, in the facts and circumstances of the case, and in the interest of justice and equity. the facts and circumstances of the case, and in the interest of justice and equity. NC: 2025:KHC:15975 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. (xiii) Pass such order that Hon’ble Court, may seem fit, in the facts and circumstances of the case, and in the interest of justice and equity. the facts and circumstances of the case, and in the interest of justice and equity. NC: 2025:KHC:15975 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned orders and notices in order to point out that the proceedings relating to the assessment year 2015-16, the notice under Section 148 of the I.T.Act ought to have been issued on or before 31.03.2021 and any notice issued after the aforesaid date including the instant notice issued on 01.04.2022 was barred by limitation as held by the Apex Court in the case of Union of India & others vs.Rajeev Bansal -(2024) 469 ITR 46 (SC) and subsequently followed by the Apex Court in the case of Assistant Commissioner of Income Tax & others vs. Nehal Ashit Shah – SLP (Civil) Diary No.(S) – 57209/2024 Dated 04.04.2025. It is therefore submitted that the impugned orders/ Notices deserve 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 liable to be set aside. 5. As rightly contended by the learned counsel for the petitioner, the material on record discloses that the impugned proceedings is relating to the Assessment Year 2015-16 in respect of the petitioner; however, it is an undisputed fact that the respondents issued impugned notice at Annexure-A2 under Section 148 of the I.T.Act on 01.04.2022, beyond the period of limitation and the same has already been held not to be permissible by the Apex Court in Rajeev Bansal’s case supra, which reads as under:- “19(e). The Finance Act, ([2021]) 431 ITR (St.) 52) substituted the old regime for reassessment with a new regime. The first proviso to Section 149does not expressly bar the application of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 3of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-Tax Act, including Sections 149and 151of the new regime. Once the first proviso to Section 149(1)(b)is read with Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to assessment years 2013-14, 2014-15, 2015-16, 2016-17, and 2017-18 will be within the period of limitation as explained in the tabulation below: 2015-16, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; 49. The first proviso to Section 149(1)(b)requires the 2015-16, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; 49. The first proviso to Section 149(1)(b)requires the determination of whether the time limit prescribed under Section149(1)(b)of the old regime continues to exist for the assessment year 2021-22 and before. Resultantly, a notice under Section 148of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten-years prescribed under Section 149(1)(b)of the new regime applies prospectively. For example, for the assessment year 2012-13, the ten-year period would have expired on March 31, 2023, while the six-year period expired on March 31, 2019. Without the proviso to Section 149(1)(b)of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-13 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b)to protect the interests of the assesses. 149(1)(b)of the old regime continues to exist for the assessment year 2021-22 and before. Resultantly, a notice under Section 148of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten-years prescribed under Section 149(1)(b)of the new regime applies prospectively. For example, for the assessment year 2012-13, the ten-year period would have expired on March 31, 2023, while the six-year period expired on March 31, 2019. Without the proviso to Section 149(1)(b)of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-13 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b)to protect the interests of the assesses. 6. Subsequently, in Nehal Ashit’s case supra also, the Apex Court reiterated the very same position and dismissed the appeal filed by the Revenue on the ground that the notice issued after 01.04.2022 was barred by limitation and the impugned proceedings are not permissible beyond period of limitation. In the instant case, it is an undisputed fact that the impugned proceedings is relating to the Assessment Year 2015-16, while the impugned notice under Section 148 of the Act dated 01.04.2022 was issued beyond/after 01.04.2021 which is impermissible in law and barred by limitation and consequently, the impugned orders/notices etc., deserve to be quashed. - 8 - 7. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned orders/Notices at Annexures-A1, A2, B, C1, D1 and E1 dated 01.04.2022, 01.04.2022, 15.03.2022, 09.03.2022, 27.08.2024 and 27.08.2024 respectively and subsequent orders/notices issued by the 1[st] respondent are hereby quashed. Sd/- (S.R.KRISHNA KUMAR) JUDGE MPK/SRL