THE ADDL COMMISSIONER OF INCOME TAX vs. M/S NANDA FEEDS PVT LTD

HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED BY THE LEARNED SINGLE JUDGE IN W.P. NO.19210/2025 DATED 18/09/2025 AND ETC., IN WA NO. 2027/2025 BETWEEN: THE ADDL. COMMISSIONER OF INCOME TAX CENTRAL RANGE-1, 3RD FLOOR, C.R. BUILDING, QUEEN’S ROAD, BENGALURU - 560 001. ...APPELLANT (BY SRI. RAVI RAJ Y. V., ADVOCATE)

AND:

M/S. NANDA FEEDS PVT. LTD., NO.337/61, 2ND FLOOR, 43RD CROSS, 9TH MAIN, 5TH BLOCK, JAYANAGAR, BENGALURU - 560 041. (REPRESENTED BY ITS DIRECTOR, NAVEEN KUMAR PASUPARTHY, HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB AGED ABOUT 56 YEARS, S/O P.S. NANDA KUMAR) INCORPORATED UNDER COMPANIES ACT, 1956 ...RESPONDENT (BY SRI. CHYTHANYA K. K. SENIOR COUNSEL A/W SRI. VIPUL KAMATH K.V., ADVOCATE FOR; SRI. TATA KRISHNA, ADVOCATE)

THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED BY THE LEARNED SINGLE JUDGE IN WP NO.20063/2025 DATED 18/09/2025 AND ETC., THESE APPEALS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R DEVDAS and HON'BLE DR. JUSTICE K.MANMADHA RAO

COMMON JUDGMENT (PER: HON'BLE MR. JUSTICE R DEVDAS)

These intra-Court writ appeals arise from the impugned orders passed by the learned Single Judge in W.P.Nos.19076/2025, 19210/2025 and 20063/2025 dated 18.09.2025. The writ petitions were filed seeking to quash, insofar as the writ petitioner is concerned, the impugned penalty orders and demand notices passed HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB under Section 271DA of the Income Tax Act, 1961, dated 23.05.2025 and 26.05.2025. 2. As could be seen from the impugned orders, the learned Single Judge proceeded to allow the writ petitions on the ground of limitation, having regard to a decision of a co-ordinate Bench in the case of Prl. Commissioner of respondent-revenue therein would not dispute the position of law as laid down by the Division Bench and accordingly on the admitted fact that the show cause notice was issued beyond the prescribed period, proceeded to allow the writ petitions while setting aside the impugned penalty orders and the demand notices dated 23.05.2025 and 26.05.2025. 3. However, learned counsel for the appellant- Revenue submits that subsequently another Division HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB Bench in the case of the Joint Commissioner of Income No.1991/2025 connected with other matters disposed of on 07.07.2026, has held that the proceedings under Section 271DA of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short) can be said to have been from the decision of another co-ordinate bench, the HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB correct procedure should have been to refer the matter to a larger bench. In this regard, attention of this Court is drawn to a decision of the Apex Court in the case of Official Liquidator Vs. Dayanand & Ors. 2008 (10) SCC 1 where the Hon'ble Supreme Court has clearly held that judicial discipline if not followed by the Judges, then the litigant public and the lawyers will be in a dilemma in the matter of following the judgments of the courts, if there are divergent opinions. Nevertheless, the learned Senior Counsel would submit that notwithstanding the said submission, going by the decision of another co-ordinate bench in the case of Ganesh Agarwal, as stated in the concluding paragraphs, viz., 63 (iv), if the position of law is stated to be that the period of six months would begin from the end of the month in which the proposal/reference was received by the Joint Commissioner from the Assessing Officer, when applied to the facts of the present case, would still go in the favour of the respondent. HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB initiating proceedings for levying penalty under Section 271DA of the Act, against the respondent for failure to comply with Section 269ST of the Act for the assessment years 2019-20, 2020-21 and 2022-23. Therefore, it is submitted that having regard to Clause (c) of sub-section (1) of the unamended provision of Section 275, where there are two limbs provided and the first limb being that in any other case, after the expiry of the financial year in which the proceedings in the course of which, action for imposition of penalty has been initiated are completed, the cause of action would commence from the date when the Assessing Officer passes the order. The case on hand falls under the first limb.

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB show cause notice was issued on 12.12.2024, long after the period of six months elapsed, even in terms of the law laid down by the co-ordinate bench in the case of Ganesh Agarwal. The learned Senior Counsel would therefore submit that although according to the learned Senior Counsel, the law laid down by the Co-ordinate Bench in HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB Therefore, no infirmity can be found in the impugned orders passed by the learned Single Judge.

conclusion than what was arrived at by the learned Single Judge.

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB limitation under Section 275 of the Act. On the other hand, another co-ordinate Bench in the case of Ganesh Agarwal has held that limitation under Section 275(1)(c) of the Act, commences only from the date of issuance of show cause notice under Section 274 of the Act by the Joint Commissioner of Income Tax. In the present case, as rightly submitted by the learned Senior Counsel for the respondent, the order of assessment was passed on 18.03.2024 and 24.03.2024 and therefore, the financial year coming to an end on 31.03.2024, six months would end on 30.09.2024. Therefore, going by the interpretation given in Umesh Shetty, having regard to the date of the order of assessment, the initiation of proceedings beyond 30.09.2024, would be time barred. On the other hand, going by the interpretation given in Ganesh Agarwal, if the period of six months would begin from the end of the month in which the proposal/reference was received by the Joint Commissioner from the Assessing Officer, even HC-KAR

CNR: KAHC010815652025 NC: 2026:KHC:45066-DB then the show cause notice should have been issued before 30.09.2024. 10. Viewed from any angle, the impugned penalty orders and demand notices dated 23.05.2025 and 26.05.2025 cannot be sustained, on the ground of limitation. The action taken by the appellant authority against the respondent for levying penalty under Section 271DA of the Act, is clearly beyond the period of limitation prescribed under Section 275 (1) (c) of the unamended Act.

JT/- CT:PH