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2023 Supreme(Kar) 1408
IN THE HIGH COURT OF KARNATAKA
B.M. Shyam Prasad, J.
Gubbi Chidananda Jagadeesh – Petitioner
Versus
National Faceless Assessment Centre and Others – Respondents
Writ Petition No. 8213 of 2023
Decided On : 02-11-2023
Advocate Appeared:
For the Petitioner: Annamalai S.
For the Respondent: M. Dilip
A taxpayer must be provided a fair opportunity for a personal hearing before assessment proceedings under tax laws, particularly when challenged for lack of notice.
Headnote:(A) Income Tax Act, 1961 - Sections 147, 144, 144B, and 148A - Assessment orders and adjudication order challenged on grounds of lack of opportunity - Court found a lack of due process, emphasizing the necessity of a personal hearing under Section 144B for the petitioner, a senior citizen, who claimed ignorance of the proceedings. (Paras 4, 6, 7, 8).
Facts of the case:
The petitioner challenged the assessment and adjudication orders for the assessment year 2015-16, alleging non-receipt of notices and a request for a personal hearing. He represents he had no knowledge of the transactions leading to the impugned notice.
Findings of Court:
The court ruled that the petitioner was not afforded necessary opportunities to respond and quashed the assessment and adjudication orders, restoring proceedings for reconsideration.
Issues: The primary issues included whether the petitioner was notified of proceedings under Section 148A[b] and if he had been provided a fair opportunity for a hearing.
Ratio Decidendi: The court concluded that there was a lack of opportunity given to the petitioner as required under the IT Act, mandating proper notice and personal hearing before proceeding with assessment actions.
Result: The petition is allowed in part; the assessment and adjudication orders are quashed.
| Table of Content |
|---|
| 1. assessment order challenged on procedural grounds (Para 1 , 2 , 3) |
| 2. petitioner's lack of opportunity for response (Para 4 , 5 , 6) |
| 3. court emphasizes right to fair hearing (Para 7 , 8) |
ORDER :
1. The petitioner has impugned the assessment order dated 13.03.2023 under Section 147 read with sections 144 and 144B of the INCOME TAX ACT , 1961 [for short, the 'IT Act'] as per Annexure - A.1, the Computation Sheet dated 13.03.2023 as per Annexure A.2, the Demand Notice dated 13.03.2023 as per Annexure A.3 and the Penalty Notices dated 13.03.2023 as per Annexures - A.4, A.5 and A.6.
2. The petitioner, apart from these, has also impugned the adjudication order under Section 148 A[d] of the IT Act dated 28.03.2022 as per Annexure - B.2 and the consequential Notice dated 31.03.2022 under Section 148 of the IT Act as per Annexure - B.3. The petitioner has impugned the assessment order dated 13.03.2023 and the adjudication order dated 28.03.2022 under Section 148 A[d], and the consequential proceedings essentially on ground of lack of due opportunity.
3. The second respondent has issued notice under Section 148A[b] on 17.03.2022 putting the petitioner on notice that he has not filed the ITR for the assessment year 2015-16 despite having income chargeable to tax, and insofar as the income not offered to tax, the second respondent has referred to certain TDS effected on the purchase of immovable property and deposit with the Post Office exceeding Rs.50,000/-. The petitioner has not responded to this notice and the adjudication is completed under Section 148A[d].
4. When the show-cause notice under Section 142[1] of the IT Act is issued after the adjudication order dated 28.03.2022, the petitioner has requested for details of the transactions and an opportunity of personal hearing asserting that he is 66 years old and not familiar with the use of mobile or emails. The petitioner's response is as under:
"With regard to the variations as mentioned in the show cause notice, I would like to bring to your kind notice that the transactions mentioned by you are 8 years old and to the best of memory I have not made any such transactions with regard to payment to purchase of immoveable property, insurance Premium and Post Office Deposits to the tune of Rs.88,71,080/-. Please provide the details of transactions like Property Details, Date of transaction, seller details, Insurance Policy details and Post Office details, Date of such transactions, I will look into the same and try to recollect based on the details provided to me, I will be able to furnish the requisite details.
In view of the above, I being a senior citizen humbly request your good selves to kindly transfer the case to the Tumakuru ITO if possible which will provide me another opportunity by providing the details and also further request to provide me a Video Conferencing Opportunity."
If the adjudication order dated 28.03.2022 under Section 148A[d] is concluded on the basis that there is no response, the assessment order is completed recording that the petitioner has failed to support documentary evidence regarding the purchase of immovable property and the post office deposit.
5. Sri S. Annamalai, the learned counsel for the petitioner, is categorical that the petitioner has not purchased any immovable property nor received the advantage of post office deposits during the assessment year 2015-16; that therefore, the petitioner has requested the details based on which the notice is issued under Section 148A[b] of the IT Act, but the first respondent, without sharing such information, has proceeded to pass the impugned assessment order.
6. Sri M. Dilip submits that the petitioner has not responded to the notice issued under Section 148A[b] of the IT Act and as such, the second respondent has passed the adjudication order dated 28.03.2022 under Section 148A[d] of the IT Act, and insofar as the first respondent's impugned assessment order, Sri M. Dilip cannot contest that desp
