Sachin Kumar vs. Assistant Commissioner Of Central
Original PDF →Facts
The petitioner challenged two Orders-in-Original for FY 2014-15 and 2015-16, along with subsequent recovery and garnishee notices. He argued that the order for FY 2014-15 did not pertain to him due to incorrect PAN and address, and for FY 2015-16, he sought a fresh opportunity to prove his income was from trading shares, not services, as he had filed returns accordingly.
Held
The Court quashed the Order-in-Original for FY 2014-15, finding it could not be sustained against the petitioner due to mismatched PAN and address details. The Order-in-Original for FY 2015-16 was also quashed, and proceedings were restored for fresh consideration to allow the petitioner to present his case. Consequently, the recovery and garnishee notices were quashed.
Key Issues
Whether an Order-in-Original is valid against a person with incorrect PAN and address details, and whether a taxpayer should be granted a fresh opportunity to prove the nature of their income (trading vs. services) for tax liability determination.
Sections Cited
Section 73 of the Finance Act, 1994
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
TO THE SAID ORDER (ANNEXURE- G).
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: HC-KAR NC: 2026:KHC:29687 CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner is aggrieved by the Orders-in- Original dated 14.06.2023 and 22.02.2021. The Order-in-Original dated 22.02.2021 [Annexure - G] relates to the financial year 2014-15, and the order dated 14.06.2023 [Annexure - F] relates to the financial year 2015-16. The petitioner has also called in question the Recovery Notice dated 27.02.2026 [Annexure - E] and the Garnishee Notice dated 23.03.2026 [Annexure - D]. These impugned Recovery and Garnishee notices are common to both the impugned Orders-in-Original.
Ms. Tanmayee Rajkumar, the learned counsel for the petitioner, submits that if the petitioner seeks indulgence of this Court for interference with the Order dated 14.06.2023 on the ground of a better opportunity, the petitioner seeks interference with the Order dated 22.02.2021 on the HC-KAR NC: 2026:KHC:29687 ground that it is not against the petitioner. On the grievance with the order dated 14.06.2023, the learned counsel submits the following:
[i] The proceedings are concluded with some participation by the petitioner on the basis of the information shared pursuant to a contract between the Central Board of Direct Taxes and the Central Board of Indirect Taxes.
[ii] In very similar circumstances, this Court has interfered to restore the proceedings with opportunity to show cause against
conclusion of proceedings under Section 73 of the Finance Act, 1994 in the case of M/s. Karnataka Chinmaya Seva Central Tax in W.P. No.11154/2023 and connected matters dated 03.07.2024. HC-KAR NC: 2026:KHC:29687 [iii] The petitioner could show cause against this order dated 14.06.2023 because the petitioner has filed returns for the relevant year i.e., 2015-16 furnishing details of the income earned from trading but there could be a possible error in mentioning that the petitioner's income is from sale of services.
[iv] The documents demonstrate that the petitioner is engaged only in trading of shares and not in sale of services.
Ms. Tanmayee Rajkumar, insofar as the order dated 22.02.2021 which is relevant to the financial year 2014-2015, points out that, though the order is in the name of Mr. Sachin Kumar, the order relates to a person whose PAN Number is No. BJEPS9834C and whose address is as seen in the order. The learned counsel emphasizes that the HC-KAR NC: 2026:KHC:29687 order dated 22.02.2021 cannot relate to the petitioner because the petitioner's PAN Number is No. AHSPK0895J and the petitioner has never been at the address as mentioned in the impugned order.
Mr. Aravind V. Chavan, the learned Standing counsel for the respondents, is heard and he cannot dispute that this Court in M/s. Karnataka Central Tax [supra] has interfered to restore the proceedings for due opportunity and after this Court's intervention, the juri ictional Officers have been authorized to conduct fresh proceedings.
This Court, in the circumstances emphasized on behalf of the petitioner, is of the view that notwithstanding the participation that could be by the petitioner, there must be interference with the order dated 14.06.2023 [Annexure - F] because if ultimately the petitioner can justify that what is offered to tax is only income from trading and not HC-KAR NC: 2026:KHC:29687 from sale of services, there cannot be any liability under the Finance Act, 1994. As regards the order dated 22.02.2021, this Court must opine that the Authorities cannot justify initiation of the proceedings against the petitioner if the PAN and the address details cannot relate to him. In the light of the afore, the following: ORDER [A] The petition is allowed-in-part declaring that the Order-in-Original dated 22.02.2021 cannot be sustained against the petitioner and the Order- in-Original dated 14.06.2023 is quashed restoring the proceedings for fresh consideration.
[B] Consequentially, the impugned Recovery Notice dated 27.02.2026 and the Garnishee Notice dated 23.03.2026 are quashed with liberty to HC-KAR NC: 2026:KHC:29687 the respondents to initiate proceedings subject to outcome in the pending proceedings [C] The petitioner is reserved with liberty to appear without further notice with the juri ictional Assessing Officer [the first respondent] on 20.07.2026 and file its documents on such date or such further date as the first respondent may allow.
[D] It is needless to observe that all contentions are left open for reconsideration in the pending proceedings. (B M SHYAM PRASAD) JUDGE
RB
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.