ANKIT AGARWAL vs. ASSESSMENT UNIT

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WP/11125/2026HC KarnatakaKAHC01025739202609 April 2026Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the petition, setting aside the Assessment Order dated 20.03.2026 and related annexures. The Court found merit in the petitioner's assertion that they were not afforded an adequate opportunity to respond to all aspects considered in the assessment order. Specifically, the Court noted that while the assessee's reply to the Section 133(6) notice and reconciliation statement were considered, the petitioner was not put on notice regarding the need for supporting independent documentary evidence as referred to in paragraph 4 of the assessment order. The matter was remitted to the stage of reply to the show cause notice. The petitioner was directed to appear before the respondent on 13.05.2026. The Court also clarified that it is open for the petitioner to seek clarifications and for the Department to issue a corrigendum to the show cause notice if necessary. All other contentions on merits were kept open.

What were the facts?

The petitioner, Ankit Agarwal, filed a writ petition before the High Court of Karnataka challenging an Assessment Order dated 20.03.2026 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2024-25. The petitioner contended that the Assessment Order was passed without being afforded an opportunity to examine documents relied upon by the respondent authority, including replies to a notice under Section 133(6). The petitioner also argued that the assessment order referred to aspects not included in the show cause notice, and that the requirement for supporting independent documentary evidence was not raised in the show cause notice.

What were the issues?

1. Whether the Assessment Order dated 20.03.2026, passed under Section 143(3) r.w.s 144B of the Income Tax Act, 1961, is liable to be quashed on the grounds of violation of principles of natural justice, specifically the denial of an opportunity to the assessee to inspect documents relied upon by the revenue and to respond to issues not covered in the show cause notice? Assessee's Contentions: The petitioner argued that the assessment order was passed without providing an opportunity to review documents relied upon by the revenue, including replies to a Section 133(6) notice. The petitioner also contended that the assessment order incorporated findings on issues not present in the show cause notice, particularly regarding the lack of supporting independent documentary evidence, which was not put to the assessee for a response. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 133(6)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2026:KHC:20192 WP No. 11125 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 11125 OF 2026 (T-IT) BETWEEN: 1. ANKIT AGARWAL S/O. AJAY KUMAR AGARWAL, AGED ABOUT 43 YEARS, H-1402 MANTRI ESPANA, KARIYAMMANA AGRAHARA ROAD BELLANDUR, BENGALURU - 560 103 … PETITIONER (BY SRI. A. SHANKAR, SENIOR ADVOCATE FOR SRI MADHUSUDHAN U A., ADVOCATE) AND: 1. ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWARLAL NEHRU STADIUM, DELHI-110 003 2. THE DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 5(1)(1), BANGALORE, BMTC BUILDING, 80 FT. ROAD, Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:20192 WP No. 11125 of 2026 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095 … RESPONDENTS (BY SRI. THIRUMALESH M., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER DATED 20.03.2026 PASSED UNDER SECTION 143(3) R.W.S 144B OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2024-25 BY THE RESPONDENT NO.1 BEARING DIN NO. ITBA/AST/S/143(3)/2025-26/1087631595(1), HEREIN MARKED AS ANNEXURE - A1 AND ETC.

THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER The petitioner has sought for setting aside of the Assessment Order at Annexure-'A1' dated 20.03.2026 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 for the Assessment Year 2024-25 and has also sought for certain allied reliefs as well.

2.

Sri A. Shankar, learned Senior Advocate appearing for Sri Madhusudhan U.A. for the petitioner

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HC-KAR NC: 2026:KHC:20192 WP No. 11125 of 2026 submits that the respondent Authority has passed the Assessment Order and recorded the findings without the petitioner being afforded an opportunity of looking into certain documents relied on by the respondent Authority, while completing the assessment proceedings, including the replies made to the notice issued under Section 133(6) of the Income Tax Act, 1961, though the said reply was subsequently obtained by the petitioner after the assessment proceedings were completed. 3. It is further submitted that the Assessment Order refers to the aspects that were not part of the show cause notice even otherwise. It is submitted that the respondent Authority has recorded that the assessee has not furnished supporting independent documentary evidence as is referred to at para-4 of the Assessment Order, which has referred to such aspects, were not put to the petitioner of making a response in the show cause.

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HC-KAR NC: 2026:KHC:20192 WP No. 11125 of 2026 4. It is submitted that, if a fresh opportunity is granted to the petitioner, the petitioner would place all other material to dispel doubts in the mind of the Assessing Authority, which would enable the Assessing Authority to come to a correct conclusion. 5. Accordingly, having perused the show cause notice and the Assessment Order, the assertion of the petitioner requires acceptance. The Assessment Order does refers to the reply of the petitioner to the notice under 133(6) of the Income Tax Act. The Authority has referred to the Reconciliation Statement of the petitioner, however, it is observed that the petitioner had not furnished supporting independent documentary evidence, however, as pointed out by the petitioner, the petitioner was not put on notice for production of such documents referred to at para-4 of the Assessment Order. 5. Accordingly, the Assessment Order at Annexure-'A1' dated 20.03.2026, Annexures-'A2' to 'A4',

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HC-KAR NC: 2026:KHC:20192 WP No. 11125 of 2026 all dated 20.03.2026 are set aside. The matter is remitted to the stage of reply to the show cause notice. The petitioner to appear before the respondent No.2 on 13.05.2026 without waiting for any further notice. 6. It is open to the petitioner to seek for clarifications as well as it is open for the Department, if they find it necessary to issue necessary Corrigendum to the Show Cause Notice. All other contentions on merits are kept open. Accordingly, the petition is disposed of. Sd/- (S SUNIL DUTT YADAV) JUDGE VGR

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