Case Law Details
Sabeer Husain Johura Vs Assessment Unit (Karnataka High Court)
The Karnataka High Court set aside the order passed under Section 148A(d), the consequent notice under Section 148, and the ex-parte assessment order for AY 2017–18, on the ground that the assessee had not participated and alleged non-receipt of notice under Section 148A(b). The Court observed that issues such as cash withdrawals (which cannot automatically be treated as income escapement) and the ₹50 lakh threshold for reopening beyond three years required proper consideration. Accordingly, the matter was remitted to the stage of filing reply to the notice under Section 148A(b), with directions to furnish the notice to the assessee and allow opportunity to respond. All contentions were kept open.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the validity of the order passed under Section 148A(d) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) at Annexure-B. The petitioner has also sought for setting aside of the notice under Section 148 of the Act, as well as the ex-parte order of assessment at Annexure-D.
2. The case of the petitioner is that, insofar as the notice under Section 148A(b) of the Act dated 23.01.2024, the petitioner has not made out any reply. It is further submitted that the order is passed under Section 148A(d) of the Act taking note that the petitioner had not made out any response and thereafter, a notice under Section 148 of the Act was issued and further proceedings have culminated in the order of assessment.
3. It is also noticed that the order of assessment is an ex-parte order passed with absence of participation of the petitioner. The petitioner would submit that the order passed under Section 148A(d) of the Act is on the premise that cash deposits and withdrawals were made. It is further submitted that insofar as withdrawals, which ipso facto cannot be termed as escapement of income and necessary explanation would be demonstrated.
4. It is further submitted that proceedings under Section 148A(b) of the Act also have a threshold of Rs.50,00,000/- to issue notice beyond a period of three years. The petitioner submits that the necessary stand would be taken if the matter is remitted to the stage of furnishing a reply under Section 148A(b). Taking note that in the consequential proceedings, the assessment order is also ex-parte, and considering the contention of the petitioner, it would meet the ends of justice by setting aside the orders at Annexures – B, C and D and remitting the matter to the stage of reply to the notice under Section 148A(b) of the Act.
5. In light of the contention that the petitioner did not receive the notice under Section 148A(b) of the Act, the authorities may furnish a copy of the said notice within ten days from the date of receipt of the certified copy of the order. Thereupon, the matter to be proceeded from the stage of reply to the notice under Section 148A(b) of the Act. All contentions are kept open.
6. Accordingly, the petition is disposed of.
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