Wp/9334/2024 Of Shri. Puttaswamy Badregowda v. The Income Tax Officer

Digitally signedby VIJAYA PLocation:HIGH COURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12 DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV -WRIT PETITION NO. 9334 OF 2024 (TIT) BETWEEN: 1. SHRI. PUTTASWAMY BADREGOWDA SON OF LATE BADREGOWDA, AGED ABOUT 52 YEARS, NO.135, 6 CROSS BAPUJI LAYOUT, CHANDRA LAYOUT, VIJAYANAGAR, BANGALORE - 560 040. PREVIOUSLY AT: NO.96, 1 CROSS, 6 MAIN, PIPELANE WEST KASTURIBANA BANGALORE - 560 026 … PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD - 5 (2) (1) BANGALORE BMTC BUILDING 80 FEET ROAD, 6 BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA BENGALURU - 560 095 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 3, BANGALORE BMTC BUILDING, 80 FEET ROAD, 6 BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA 6 BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BANGALORE - 560 095 (BY SRI. THIRUMALESH M., ADVOCATE) … RESPONDENTS THIS W.P. 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 21/03/2022 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2021-22/1041185349(1) ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Petitioner has sought to challenge the notice under Section 148-A(b) of the Income Tax Act, 1961 (for short 'the Act') at Annexure-A and the consequential order under Section 148-A(d) of the Act; notice under Section 148 of the Act at Annexure-A2; the order under Section 147 read with Section 144 of the Act at Annexure-A3; penalty order under Section 272A(1)(d) of the Act at Annexure-A4; penalty order under Section 271AAC(1) of - 3 - the Act at Annexure-A5 and the order under Section 147 read with Section 144 of the Act at Annexure-A6. 2.It is noticed that the notice under Section 148-A(b) of the Act issued on 21.03.2022 directs for submission of reply by 25.03.2022. The admitted fact is that the petitioner has not participated in the proceedings, due to bonafide reasons as he was not intimated nor was there any notice served on him. 3.It is to be noticed that Section 148A(b) of the Act reads as follows: "provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under Section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a)." 4.The mandate for giving notice of not less than 7 days for reply is a statutory mandate and the Central Board of Direct Taxes by the Guidelines issued for issuance of notice under Section 148A(b) of the Act reiterates at (vii) that 7 to 30 days time to be given for submitting the reply. 5.Clause (vii) of the said Guidelines reads as follows: "vii. If the result of enquiry/information available suggests that the income chargeable to tax has escaped assessment, the AO shall provide an opportunity of being heard to the assessee by issuing a show cause notice u/s 148A(b) of the Act. The said notice shall provide between 7 to 30 days' time to the assessee for submitting the reply. A template of show cause notice is enclosed at Annexure-A1". 6.Clearly, there is violation of the legal mandate insofar as the time given for reply, which has caused - 5 - 5.Clause (vii) of the said Guidelines reads as follows: "vii. If the result of enquiry/information available suggests that the income chargeable to tax has escaped assessment, the AO shall provide an opportunity of being heard to the assessee by issuing a show cause notice u/s 148A(b) of the Act. The said notice shall provide between 7 to 30 days' time to the assessee for submitting the reply. A template of show cause notice is enclosed at Annexure-A1". 6.Clearly, there is violation of the legal mandate insofar as the time given for reply, which has caused - 5 - prejudice to the petitioner. It is further noticed that the petitioner not having participated in the proceedings, it would meet the ends of justice to afford another opportunity to the petitioner to take part in the proceedings. Once the notice is defective as being contrary to the legal mandate and is defective, the consequential proceedings including the order under Section 148A(d) are required to be set aside on the ground that the notice suffers from violation of the statutory mandate. 7.Accordingly, the notice under Section 148-A(b) of the Act is set aside and the consequential order under Section 148-A(d) of the Act; notice under Section 148 of the Act at Annexure-A2; the order under Section 147 read with Section 144 of the Act at Annexure-A3; penalty order under Section 272A(1)(d) of the Act at Annexure-A4; penalty order under Section 271AAC(1) of the Act at Annexure-A5 and the order under Section 147 read with Section 144 of the Act at Annexure-A6, are also set aside. Liberty is reserved to the Revenue to take appropriate action as regards to the subject matter of the notice under Section 148A(b) of the Act and the petitioner would not take up any contention regarding limitation. 8.Accordingly, petition is disposed off. Sd/- JUDGE VP