Wp/2786/2023 Of Mr Dhandayutham Kiran v. The Deputy Commissioner Of Income Tax

Digitally signedby NARASIMHAMURTHYVANAMALALocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16 DAY OF FEBRUARY, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD -WRIT PETITION NO. 2786 OF 2023 (TIT) BETWEEN: MR DHANDAYUTHAM KIRAN SON OF MR DHANDAYUTHAM AGED ABOUT 49 YEARS HAVING OFFICE AT NO.165 AVENUE ROAD BANGALORE-560002. …PETITIONER (BY SRI. SYED KHAMRUDDIN.,ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX INCOME TAX CIRCLE-3(1)(1) BENGALURU ROOM NO.240, 2 FLOOR BMTC BUILDING 80 FEET ROAD KORAMANGALA BENGALURU-560095. 2. CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE MINISTRY OF FINANCE NORTH BLOCK NEW DELHI-110002 REPRESENTED HEREIN BY ITS CHAIRPERSON. 3. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX INCOME TAX KARNATAKA AND GOA REGION GROUND FLOOR CR BUILDING NO.1, QUEENS ROAD BENGALURU-560001. 4. PRINCIPAL COMMISSIONER OF INCOME TAX-3 BANGALORE BMTC BUILDING 80 FEET ROAD 6TH BLOCK NEAR KHAB GAMES VILLAGE KORAMANGALA BENGALURU-560095. …RESPONDENTS (BY SRI.E.I. SANMATHI., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 30/07/2022 PASSED BY THE R-1 UNDER SECTION 148A OF THE INCOME-TAX ACT, 1961, FOR THE AY 2017-18 (ANNEXURE-A) ITBA/COM/F/17/2022-23/1044357052(1).QUASH THE IMPUGNED NOTICE DATED 30/07/2022 VIDE DIN NO. ITBA/AST/S/91/2022-23/1044358611(1) ISSUED BY THE R-1 UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, FOR THE AY 2017-18 (ANNEXURE-B). THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner is aggrieved by the impugned Order dated 30.07.2022 [Annexure-A] under Section 148A[d] of the Income Tax Act, 1961 [for short, ‘IT Act’] and the subsequent Notice of even date under Section 148 of the IT Act [Annexure-B]. The petitioner’s case is that during the relevant assessment year the subject cash deposits have been accounted for, but while entering the data in the Income tax website, erroneously, non-existent cash deposit of Rs.43,52,092/- is shown. In fact, the petitioner, relies upon the Certificate issued by his Banker, M/s. HDFC Bank Limited, to demonstrate that the entry of Rs.43,52,092/- as ‘cash deposit’ during the relevant assessment year is an error. 2.The first respondent, while considering the petitioner’s objections under Section 148A[a] of the IT Act, and after opportunity under Section 148A[b] of the IT Act, has passed the impugned order. The first respondent’s consideration of the petitioner’s case as against the reassessment in the impugned order reads as under: “7. The assessee reply is considered. It is claimed by the assessee that the cash deposits are made from the sales of the business and properly disclosed in the return of income filed. Considering the above facts of the case the submissions need to be examined further. Accordingly notice u/s 148 of the Act. for A.Y. 2017-18 is issued.” 3.While Sri. Syed Khamruddin submits that the mandatory requirement under Section 148A[d] of the IT Act is that there must be due consideration of the objections as against reassessment and reasons offered have not been considered, Sri. E I Sanmathi, the learned counsel for the respondents, submits that the first respondent is categorical that notwithstanding the brief reason recorded as aforesaid, the same could be construed as based on consideration of the petitioner’s objections that there is an erroneous deposit. Sri. E.I.Sanmathi argues that there cannot be an adverse inference because the same is not mentioned in express terms. 3.While Sri. Syed Khamruddin submits that the mandatory requirement under Section 148A[d] of the IT Act is that there must be due consideration of the objections as against reassessment and reasons offered have not been considered, Sri. E I Sanmathi, the learned counsel for the respondents, submits that the first respondent is categorical that notwithstanding the brief reason recorded as aforesaid, the same could be construed as based on consideration of the petitioner’s objections that there is an erroneous deposit. Sri. E.I.Sanmathi argues that there cannot be an adverse inference because the same is not mentioned in express terms. 4.However, it cannot be gainsaid that the adjudication as contemplated under Section 148A[d] of the IT Act must necessarily involve adequate consideration of the assessee’s cause against the commencement of the proceedings. This Court is of the considered view that the impugned order dated 30.07.2022 [Annexure-A] fails on this score, and therefore, the petitioner must succeed with the proceedings restored to the first respondent for reconsideration of the petitioner’s objections viz., that erroneously a non-existent cash deposit of Rs.43,52,092/- is shown while uploading the details which is supported by the Certificate issued by his Banker, M/s. HDFC Bank Limited. Hence the following: ORDER The petition is allowed-in-part, and the impugned order dated 30.07.2022 [Annexure-A] and the subsequent Notice dated 30.07.2022 [Annexure-B] are quashed and the proceedings are restored to the first respondent for reconsideration in accordance with law. SD/- JUDGE AN/-