SRI HOSAMALANGI NAGANNA NAGARAJAPPA vs. INCOME TAX OFFICER

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WP/21594/2026HC KarnatakaKAHC01047654202621 July 2026Author: B M SHYAM PRASAD9 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court allowed the petition in part. It quashed the order under Section 148A(d) dated 18.03.2024 (Annexure-A1), the notice under Section 148 dated 18.03.2024 (Annexure-A2), the corrigendum under Section 148 dated 18.03.2024 (Annexure-A3), the reassessment order under Section 147 read with Sections 144 and 144B dated 20.03.2025 (Annexure-A4), the penalty order under Section 270A dated 18.08.2025 (Annexure-A5), the penalty order under Section 272A(1)(d) dated 18.08.2025 (Annexure-A6), the penalty order under Section 271AAC(1) dated 21.08.2025 (Annexure-A7), and the notice under Section 226(3) dated 17.03.2026 (Annexure-A8). The Court found bonafides in the petitioner's assertion that he did not track portal updates and could not have received intimations addressed to his earlier residence due to property transfer. Therefore, the proceedings were restored to the stage of response to the show cause notice under Section 148A(b) dated 15.02.2024. The petitioner was directed to file a response by 05.10.2026. The challenge to Section 147A was not pursued by the petitioner. The principle is that procedural fairness requires an opportunity to respond when there are bonafide reasons for non-compliance.

What were the facts?

The petitioner, Sri Hosamalangi Naganna Nagarajappa, is challenging several notices and orders issued by the Income Tax Department for Assessment Year 2020-21. These include a show cause notice under Section 148A(b) dated 15.02.2024, an order under Section 148A(d) dated 18.03.2024, a notice under Section 148 dated 18.03.2024, a corrigendum under Section 148 dated 18.03.2024, a reassessment order under Section 147 read with Sections 144 and 144B dated 20.03.2025, penalty orders under Sections 270A, 272A(1)(d), and 271AAC(1) dated 18.08.2025 and 21.08.2025 respectively, and a notice under Section 226(3) dated 17.03.2026. The petitioner also challenged the constitutionality of Section 147A of the Act. The reassessment proceedings were based on the opinion that a receipt of Rs. 63,48,855/- in two savings accounts remained unexplained and was taxable under Section 69A read with Section 115B.

What were the issues?

1. Whether the notices and orders issued by the Income Tax Department for Assessment Year 2020-21, including the show cause notice under Section 148A(b), the order under Section 148A(d), the notice under Section 148, the reassessment order under Section 147, and the penalty orders under Sections 270A, 272A(1)(d), and 271AAC(1), are valid and ought to be quashed? (Mixed question of law and fact, turning on Sections 147, 148, 148A, 270A, 271AAC(1), 272A(1)(d), 69A, 115B). 2. Whether Section 147A of the Act, as introduced by the respondents, is ultra vires the Constitution of India and should be struck down? (Question of law, turning on constitutional provisions and Section 147A). Assessee's Contentions: - The petitioner claims to have sold a property and an open site, utilizing the sale proceeds for construction in another property. (Relied on facts presented in point [A] of the judgment). - The petitioner is a school teacher and can explain the receipts. - The petitioner did not pay attention to portal updates and did not receive speed post notices because they were addressed to a sold property. - The petitioner does not wish to pursue the challenge to the constitutionality of Section 147A. Revenue's Contentions: - The judgment records that the revenue's learned standing counsel was heard in light of the circumstances presented by the petitioner. No specific arguments from the revenue are detailed in the provided text.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 144,Section 144B,Section 270A,Section 272A(1)(d),Section 271AAC(1),Section 226(3),Section 69A,Section 115B,Section 147A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 21594 OF 2026 (T-IT) BETWEEN:

SRI HOSAMALANGI NAGANNA NAGARAJAPPA AGED 57 YEARS, S/O N NAGANNA, DOOR NO 02, KRUTHI NILAYA, BEHIND GENA, VIVEKANANDA NAGARA, T NARASIPURA TALUK, MYSORE 571124.

PRESENTLY RESIDING AT, NO.160, BEHIND FILTER HOUSE, TRIVENI NAGARA, WARD NO.5, T NARASIPURA TOWN, MYSORE 571124. …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE)

AND:

1.

INCOME TAX OFFICER WARD 1(1) MYSORE 570008.

2.

NATIONAL FACELESS

Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA

ASSESSMENT CENTRE, ASSESSMENT UNIT, ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI 110003.

3.

THE PRINCIPAL COMMISSIONER OF BMTC BUILDING, KORAMANGALA, BANGALORE 560095.

4.

UNION OF INDIA, REP. BY SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, KARTAVYA BHAVAN - 1, NEW DELHI 110 001.

5.

CENTRAL BOARD OF DIRECT TAXES, REP. BY ITS CHAIRMAN, KARTAVYA BHAVAN - 1, NEW DELHI - 110 001.

…RESPONDENTS (BY SRI. M. THIRUMALESH., ADVOCATE A/W SRI. NIRMAL MATHEW., ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO

I) QUASHING THE NOTICE UNDER SECTION 148A(B) OF THE ACT DATED 15/02/2024, BEARING DIN NO. ITBA/AST/F/148A(SCN)/2023-24/1060984124(1) ISSUED RESPONDENT NO.1 FOR ASSESSMENT YEAR 2020-21 HEREIN MARKED AS ANNEXURE - A; II) QUASHING THE ORDER UNDER SECTION 148A(D) OF THE ACT DATED 18/03/2024 ITBA/AST/F/148A/2023- 24/1062833039(1) ISSUED BY THE RESPONDENT NO.1 FOR ASSESSMENT YEAR MARKED AS ANNEXURE - A1; III) QUASHING THE NOTICE UNDER SECTION 148 OF THE ACT DATED 18/03/2024 ITBA/AST/S/148_1/2023-24/1062833435(1) ISSUED BY 2020-21 HEREIN MARKED AS ANNEXURE - A2; IV) QUASHING THE CORRIGENDUM UNDER SECTION 148 OF THE ACT DATED 18/03/2024 BEARING DIN NO. ITBA/AST/F/17/2023-24/1062834222(1) ISSUED MARKED AS ANNEXURE-A3; V) QUASHING THE ORDER PASSED U/S 147 R.W.S 144, 144B OF THE ACT DATED 20/03/2025 BEARING ITBA/AST/S/147/2024-25/1074759334(1) ISSUED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2020-21 HEREIN MARKED AS ANNEXURE - A4. VI) QUASHING THE PENALTY ORDER UNDER SECTION 270A OF THE ACT, DATED 18/08/2025 BEARING DIN

NO. ITBA/PNL/F/270A/2025-26/1079685099(1) BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2020- 21 HEREIN MARKED AS ANNEXURE A5; VII) QUASHING THE PENALTY ORDER U/S 272A(1)(D) OF THE ACT DATED 18/08/2025 ITBA/PNL/F/272A(1)(D)/2025-26/1079688211(1) THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2020-21 HEREIN MARKED AS ANNEXURE - A6; VIII) QUASHING THE PENALTY ORDER UNDER SECTION 271AAC(1) OF THE ACT, DATED 21/08/2025 BEARING ITBA/PNL/F/271AAC(1)/2025- 26/1079845095(1) BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2020-21 HEREIN MARKED AS ANNEXURE - A7; IX) QUASHING THE NOTICE UNDER SECTION 226(3) OF THE ACT DATED 17/03/2026 VIDE ITBA/COM/F/17/2025-26/1087494436(1), ISSUED BY MARKED AS ANNEXURE A8; X) DECLARING THAT SECTION 147A OF THE ACT BY THE RESPONDENT NO.5 DATED 30/03/2026 BY THE RESPONDENT NO.4 IS ULTRA VIRES CONSTITUTION OF INDIA AND CONSEQUENTLY STRIKE DOWN THE SAME, HEREIN ENCLOSED AND MARKED AS ANNEXURE - A9.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD

ORAL ORDER

The petitioner's grievance is with the Show Cause Notice dated 15.02.2024 [Annexure-A] under Section 148A[b] of the Income Tax Act, 1961 [for short, ‘the Act’] and the subsequent proceedings. The details of these impugned Show Cause Notice and the subsequent proceedings are as follows. Sl. No. Notices/ Orders Date Provisions of Income Tax Act, 1961 Annexures

Show Cause 15.02.2024 148A[b] A

Order 148A[d] A1

Corrigendum

Reassessment Order 20.03.2025 147 r/w. 144, 144B A4

270A A5

272A[1][d] A6

21.08.2025 271AAC[1] A7

17.03.2026 226[3] A8

2.

reassessment proceedings under Section 147 of the Act has culminated with the opinion that the receipt of Rs.63,48,855/- in two

savings accounts remains unexplained and therefore must brought to tax under Section 69A of the Act read with Section 115B of the Act. The ressessment Order records that the petitioner has not received or responded to the Notice under Section 148 of the Act and that the petitioner has not responded even to the Communication dated 04.10.2024 sent by speed post.

3.

petitioner has impugned constitutionality of Section 147A of the Act but Sri.Ravishankar S V, the learned counsel for the petitioner, is categorical in stating that the petitioner does not want to pursue this grievance and that this Court could consider disposing of the petition with an opportunity to the petitioner to respond to the Show Cause Notice dated 15.02.2024 [Annexure-A] under Section 148A[b] of the Act. In support of the canvass for restoration, the learned counsel submits as follows.

[A] petitioner, during relevant assessment year, has sold the property bearing No.2, Kruthi Nilaya, Vivekananda Nagara, T Narasipura Taluk, Mysuru, and an open site and he has utilized the sale proceeds to construct in the property No.160, Behind Filter House, Triveni Nagara, Ward No.5, T Narasipura Town, Mysuru. [B] The petitioner is a School Teacher teaching a language in a Government School and he can explain the receipts. [C] The petitioner bonafide has not paid attention to the update on the portal and has not received the speed post because they are addressed to the property which is sold. The learned counsel relies upon the address as seen in the reassessment Order dated 20.03.2025. Sri M Thirumalesh, a learned standing counsel for the

respondent, is heard in light of these circumstances.

4.

If the petitioner can indeed produce title documents and the details of the sale to justify the receipts and utilization thereof for the purpose of construction, it is possible that the petitioner can be admitted to the benefit under Section 54 of the Act and the petitioner's case is that he bonafide did not track the upload on the portal and he could not have received the intimation addressed to his earlier place of residence because the property was transferred. This Court finds bonafides in this assertion and is of the view that the petitioner must have an opportunity to produce documents to show cause against reassessment based on the receipt without the benefit of Section 54 of the Act. Hence, the following.

ORDER

[A] The petition is allowed in-part.

[B] The following impugned Notices/Orders and the subsequent proceedings are quashed. Notices/ Orders Date Provisions of Income Tax Act, 1961 Annexu re Order 148A[d] A1

A2 Corrigendum

A3 Order 20.03.2025 147 r/w. 144, 144B A4 Order 270A A5 Order 272A[1][d] A6 Order 21.08.2025 271AAC[1] A7 17.03.2026 226[3] A8

[c] The proceedings are restored to the stage of response to the Show Cause Notice under Section 148A[b] of the Act. The petitioner shall file response to the Show Cause Notice dated 15.02.2024 by 05.10.2026 without further notice. Sd/- (B M SHYAM PRASAD) JUDGE AN/-

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