M/S TIGE INFRAWORKS LLP vs. ASSESSMENT UNIT

WP/18622/2026HC KarnatakaKAHC01040396202624 June 2026Bench: B M SHYAM PRASAD6 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the assessment order dated 26.03.2026 for AY 2024-25 was liable to be set aside. The Court found that the assessment was concluded without assigning reasons, despite the petitioner's specific stand that the receipts pertained to AY 2025-26 and not AY 2024-25, and therefore, could not have been assessed in the earlier year. The Court reiterated the principle that income cannot be taxed merely by a book-keeping entry unless it has actually resulted, as established in Commissioner of Income-tax Vs. Shoorji Vallabhdas & Co. and Godhra Electricity Co. Ltd. Vs. Commissioner of Income-tax. The Assessing Officer's rejection of the petitioner's contention without adequate reasoning was deemed insufficient. Consequently, the Court intervened to set aside the assessment order and restore the proceedings for reconsideration, granting the petitioner an additional opportunity to present their case. The petition was allowed.

What were the facts?

The petitioner, M/s Tiger Infraworks LLP, is a sub-contractor who executed works for Ballari Urban Development Authority (BUDA). The petitioner is aggrieved by an Assessment Order dated 26.03.2026 for Assessment Year (AY) 2024-25. The petitioner received a Final Show Cause Notice on 17.03.2026 with a three-day opportunity to respond. The petitioner requested a video conference hearing, which was extended to 23.03.2026. In their response, the petitioner stated that although bills were submitted during AY 2024-25, the principal inspected the work in the subsequent AY, and therefore, the amount was offered as income in the year of receipt (AY 2025-26). The Assessing Officer opined that this contention was not acceptable without further reasons.

What were the issues?

1. Whether the assessment order for AY 2024-25 is liable to be quashed for failing to assign reasons for rejecting the petitioner's contention that the income accrued in AY 2025-26, contrary to the principles laid down in Commissioner of Income-tax Vs. Shoorji Vallabhdas & Co. and Godhra Electricity Co. Ltd. Vs. Commissioner of Income-tax, thereby violating Article 265 of the Constitution of India. Assessee's Contentions: - The petitioner argued that income cannot be taxed unless it has actually resulted, citing the Supreme Court judgments in Commissioner of Income-tax Vs. Shoorji Vallabhdas & Co. and Godhra Electricity Co. Ltd. Vs. Commissioner of Income-tax. They contended that the amount received should be taxed in AY 2025-26, the year of receipt, not AY 2024-25. - They also argued that the assessment was concluded without assigning reasons for rejecting their specific stand, which is without the authority of law as per Article 265 of the Constitution. Revenue's Contentions: - The revenue, through the Assessing Officer, opined that the petitioner's contention regarding the year of accrual of income was not acceptable, without providing further justification.

Which sections of the Income-tax Act were involved?

Article 265

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2026:KHC:31456 WP No. 18622 of 2026

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JUNE, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 18622 OF 2026 (T-IT) BETWEEN:

M/S TIGER INFRAWORKS LLP NO. 540 4TH FLOOR 8TH MAIN, NEAR TRAFFIC POLICE STATION, VIJAYANAGAR, BENGALURU-560040 REP. BY ITS MANAGING PARTNER SRI. N.P. SATISH REDDY REGISTERED UNDER PARTNERSHIP ACT

…PETITIONER (BY SRI. M. V. SESHACHALA, SENIOR ADVOCATE FOR MR. NAGHARISH G.S, ADVOCATE) AND:

ASSESSMENT UNIT FACELESS ASSESSMENT CENTRE NORTH BLOCK, NEW DELHI-110001 REP. BY ASSESSING OFFICER

NATIONAL FACELESS ASSESSMENT CENTRE, NO.412-413, IST FLOOR, OPP. METRO PILLAR NO. 793 DWARKA MOR,

Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:31456 WP No. 18622 of 2026

NEW DELHI-110059. REP. BY ASSESSING OFFICER

PRL. COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, SEDAM ROAD, KALBURGI-585105

…RESPONDENTS (BY SRI. ARAVIND V. CHAVAN, ADVOCATE ALONG WITH MR. NIRMAL MATHEW, ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT THE AMOUNT RECEIVED IN THE ASSESSMENT YEAR 2025-26 CANNOT BE BROUGHT TO TAX IN THE CARLIER ASSESSMENT YEAR 2024-25 AS HELD BY THE HON'BLE SUPREME COURT IN GODHRA ELECTRICALS (SUPRA) AND OTHER JUDGMENTS AS IT WOULD BE WITHOUT AUTHORITY OF LAW AS PER ARTICLE 265 OF THE CONSTITUTION OF INDIA; ISSUE A WRIT OF CERTIORARI TO QUASH THE ASSESSMENT ORDER DATED 26.03.2026 BEARING NO.ITBA/AST/S/143(3)/2025-26/1087961348(1) ANNEXURE-G PASSED BY FIRST RESPONDENT FOR ASSESSMENT YEAR 2024-25.

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HC-KAR NC: 2026:KHC:31456 WP No. 18622 of 2026

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 has executed certain works for the Ballari Urban Development Authority [BUDA] as a Sub-contractor, and the petitioner is aggrieved by the Assessment Order dated 26.03.2026 [Annexure - G]. The Assessment Order is for the assessment year 2024-25. Mr. M. V. Seshachala, the learned Senior counsel for the petitioner, and Mr. Aravind V. Chavan, the learned Standing counsel who accepts notice for the respondents, are heard for the disposal of the petition with the learned Senior counsel emphasizing the following.

[a] The petitioner is issued with Final Show Cause Notice on 17.03.2026 with three days opportunity to file response. The

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HC-KAR NC: 2026:KHC:31456 WP No. 18622 of 2026

petitioner requested for video conference hearing which is also extended on 23.03.2026. [b] The petitioner has filed a response as part of the video conference hearing specifically stating that though the bills were submitted during the assessment year 2024-25, the principal has inspected the work in the next assessment year and therefore the amount is offered as income in the year in which it is received. [c] It is settled that a mere book-keeping entry cannot become income unless income has actually resulted. This proposition is exposited by the Apex Court in Commissioner of Income-tax Vs. Shoorji Vallabhdas & Co.1 which is reiterated in Godhra Electricity Co. Ltd.

1 [1962] 46 ITR 144 (SC)

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HC-KAR NC: 2026:KHC:31456 WP No. 18622 of 2026

Vs. Commissioner of Income-tax2 holding that the Authorities must consider the real accrual of income of the assessee examining the probability or improbability of realizing the same in a realistic manner. [d] The Assessing Officer, who has referred to the petitioner’s case in its rebuttal, has only opined that this contention is not acceptable without any further reason.

The question that is considered for interference at this stage is: could the assessment be completed without assigning reasons in the light of the petitioner’s specific case, and if this Court must interfere, the terms thereof? The assessment is concluded without a reason despite a specific stand viz., that the receipts are in the assessment year 2025-26 and not in the assessment year 2024-25 and therefore could not have been assessed in the year

2 [1997] 91 Taxman 351 (SC)

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HC-KAR NC: 2026:KHC:31456 WP No. 18622 of 2026

other than the year in which it is received. This Court is of the view that the question must be answered in the affirmative intervening to set aside the Assessment Order dated 26.03.2026 and restore the proceedings for reconsideration extending another opportunity to the petitioner.

Therefore, the petition is allowed accordingly.

Sd/- (B M SHYAM PRASAD) JUDGE

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