Wp/9812/2025 Of Basavashree Credit Co-Operative Society v. The Income Tax Officer

Digitally signed byCHANDANA B MLocation: HighCourt ofKarnataka IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15 DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR -WRIT PETITION NO. 9812 OF 2025 (TIT) BETWEEN: BASAVASHREE CREDIT CO-OPERATIVE SOCIETY (A REGISTERED CO-OPERATIVE SOCIETY UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959) NO. 42, BEHIND PATIDAR KALYANAMANTAPA, RAMAIAH ENCLAVE MAIN ROAD, BEHIND HESARAGHATTA MAIN ROAD, NAGASANDRA POST, BENGALURU - 560 073 (REPRESENT BY ITS PRESIDENT P H RAJU S/O. HONNAGANGAIAH AGED ABOUT 52 YEARS) …PETITIONER (BY SRI. PRAKASH D.,ADVOCATE) AND: 1. THE INCOME TAX OFFICER, WARD 2(1)(3) BMTC BUILDING, 80FT ROAD, 6 BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. NEAR KHB GAMES VILLAGE, 2. THE ASSESSING OFFICER, WARD 6 (2)(5) BMTC BUILDING, 80FT ROAD, 6 BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. - 2 - NC: 2025:KHC:15782 WP No. 9812 of 2025 3. NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, GOVERNMENT OF INDIA, MINISTRY OF FINANCE, NEW DELHI - 110 001. …RESPONDENTS (BY SRI.M. DILIP, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH NOTICE ISSUED BY R-1 UNDER SECTION 226(3) OF THE ACT IN DIN AND NOTICE NO. ITBA/RCV/S/226(3)-1/2024-25/1073738036(1) DTD. 26.02.2025 AT ANNX-D.QUASH THE ASSESSMENT ORDER DTD. 24.12.2019 IN DIN AND ORDER NO. ITBA/AST/S/143(3)/2019-20/1022978056(1) PASSED BY R-2 AT ANNX-A2 FOR THE ASSESSMENT YEAR 2017-18 AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks the following reliefs: " (A) Issue a Writ of Certiorari by quashing notice issued by Respondent No. 1 under section 226(3) of the Act in DIN & Notice No. ITBA/RCV/S/226(3)_1/2024-25/1073738036(1) dated 26.02.20252 at Annexure "D" by Respondent No. 1 under section 226(3) of the Act in DIN & Notice No. ITBA/RCV/S/226(3)_1/2024-25/1073738036(1) dated 26.02.20252 at Annexure "D" (B) To quash the Assessment Order dated 24.12.2019 in DIN & Order No. ITBA/AST/S/143(3)/2019-20/1022978056(1) passed by Respondent No. 2 at Annexure - "A2" for the Assessment Year 2017-18. DIN & Order No. ITBA/AST/S/143(3)/2019-20/1022978056(1) passed by Respondent No. 2 at Annexure - "A2" for the Assessment Year 2017-18. (C) to quash the order under section 250 of the Income Tax Act, 1961 by Appellate Authority vide DIN & Order No. ITBA/APL/S/250/2024-25/1066153026(1) passed by Respondent No. 3 at Annexure "A3" for the Assessment Year 2017-18. Tax Act, 1961 by Appellate Authority vide DIN & Order No. ITBA/APL/S/250/2024-25/1066153026(1) passed by Respondent No. 3 at Annexure "A3" for the Assessment Year 2017-18. (D) To quash the Assessment Order dated 09.03.2023 in DIN No. ITBA/AST/S/147/2022-23/1050552194(1) passed by Respondent No. 3 at Annexure "B2" and remit back for fresh consideration. DIN No. ITBA/AST/S/147/2022-23/1050552194(1) passed by Respondent No. 3 at Annexure "B2" and remit back for fresh consideration. (E) to permit the petitioner to file application for condonation of delay in filing ITR as provided board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" condonation of delay in filing ITR as provided board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" (F) to remit the matter to the Assessing officer for fresh consideration of the deductions claimed under section 80P(2)(d) of the Act in light of board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" for the Assessment Year 2018-19 and 2019-20. consideration of the deductions claimed under section 80P(2)(d) of the Act in light of board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" for the Assessment Year 2018-19 and 2019-20. (E) to permit the petitioner to file application for condonation of delay in filing ITR as provided board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" condonation of delay in filing ITR as provided board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" (F) to remit the matter to the Assessing officer for fresh consideration of the deductions claimed under section 80P(2)(d) of the Act in light of board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" for the Assessment Year 2018-19 and 2019-20. consideration of the deductions claimed under section 80P(2)(d) of the Act in light of board circular No. 13/2023 dated 26.07.2023 at Annexure - "E" for the Assessment Year 2018-19 and 2019-20. (G) Pass any other order or give any other direction as this Honorable Court deems fit and proper in the circumstances of the case. " this Honorable Court deems fit and proper in the circumstances of the case. " 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that, the respondents have proceeded to issue notice dated 26.02.2025 under Section 226(3) of the Income-tax Act, 1961, thereby attaching the bank account of the petitioner for the alleged default in payment of income-tax in relation to Assessment Years 2017-18, 2018-19 and 2019-20. In this context, learned counsel for the petitioner invited my attention to the order dated 27.06.2024, wherein the first Appellate Authority has remanded the matter to the Assessing Officer for the purpose of quantification of the amount payable by the petitioner after verification of the claims. It is therefore submitted that, in the light of the remand order by the first Appellate Authority vide Annexure-A3, dated 27.06.2024, the impugned Garnishee notice could not have been issued in relation to the Assessment Year 2017-18 and the same deserves to be set aside. 4. Secondly, learned counsel for the petitioner also submitted that in so far as Assessment Year 2018-19 is concerned, a notice under Section 148A (b) of Income-tax Act, 1961, was issued only on 15.03.2022, while the order Section 148A(d) of the Income-tax Act, was passed immediately thereafter on 31.03.2022, which is an ex parte order without providing sufficient and reasonable opportunity to the petitioner and as such, the same deserves to be set aside and the matter be remitted back to the respondent for reconsideration afresh to the stage of the petitioner submitting reply to the show cause notice under Section 148A (b) of the Income-tax Act dated 15.03.2022 and to proceed further in accordance with law. 5. Thirdly, it is submitted that in so far as Assessment Year 2019-20 is concerned, the respondents have merely issued an intimation vide Annexure-C dated 21.01.2021 and without proceeding further, the respondents have issued the impugned Garnishee notice in relation to the said Assessment Year without providing sufficient or reasonable opportunity to the petitioner to submit its reply and contest the said proceedings, and as such, the respondents could not have attached the back account in relation to the Assessment Year 2019-20 without there being any proceedings in this regard. It is further submitted that the impugned Garnishee order and impugned order under Section 148A (d) of the Income-tax Act deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh in accordance with law. 6. Per contra, learned counsel appearing for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 7. As contended by the learned counsel for the petitioner, in so far as Assessment Year 2019-20 is concerned, the respondents have issued an intimation under Section 143(1) of IT Act as long back as on 21.01.2021 and without initiating further proceedings in this regard, the respondents were clearly not justified in issuing the It is further submitted that the impugned Garnishee order and impugned order under Section 148A (d) of the Income-tax Act deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh in accordance with law. 6. Per contra, learned counsel appearing for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 7. As contended by the learned counsel for the petitioner, in so far as Assessment Year 2019-20 is concerned, the respondents have issued an intimation under Section 143(1) of IT Act as long back as on 21.01.2021 and without initiating further proceedings in this regard, the respondents were clearly not justified in issuing the impugned Garnishee notice in relation to the said Assessment Year 2019-20 and the same is unsustainable and deserves to be quashed. 8. In so far as the Assessment Year 2017-18 is concerned, a perusal of the order dated 27.06.2024 at Annexure-A3 will indicate that the first Appellate Authority has remitted the matter back to the Assessing Officer for the purpose of quantification of the amount due by the petitioner and secondly, so long as proceedings before the Assessing Officer are still pending adjudication, the respondents were not entitled to issue Garnishee notice in relation to the Assessment Year 2017-18 and the same deserves to be quashed in relation to the Assessment Year 2017-18 also. 9. In so far as invokation of Assessment Year 2018-19 by the respondents for the purpose of issuing the impugned Garnishee notice is concerned, in the light of the specific assertion on the part of the petitioner that it did not receive the notice under Section 148A(b) of the IT Act dated 15.03.2022, which culminated into an ex parte order dated 31.03.2022, passed under Section 148A(d) of the IT Act, without the petitioner contesting or participating in the proceedings, I deem it just and appropriate to set aside the order dated 31.03.2022, passed by the respondent and remit the matter back to the concerned respondent for reconsideration afresh in accordance with law. 10. In the result, pass the following: ORDER (i) The Petition is hereby allowed. (ii) The order dated 31.03.2022, passed by the respondents under Section 148A (d) of the IT Act in relation to Assessment Year 2018-19 is hereby set aside. (iii) The impugned Garnishee notice dated 26.02.2025 at Annexure-D, is also hereby quashed. (iii) Matter is remitted back to the concerned respondent for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice under Section 148A (b) of the IT Act, dated 15.03.2022 and to proceed further in this regard. (iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the - 8 - NC: 2025:KHC:15782 WP No. 9812 of 2025 respondent, who shall consider the same and proceed further in accordance with law. Sd/- (S.R.KRISHNA KUMAR) JUDGE BK : List No.: 1 Sl No.: 22