SRI. JANIGARAKOPA KUTTAPPA KRISHNAPPA vs. INCOME TAX OFFICER

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WP/23330/2025HC KarnatakaKAHC01050575202518 August 2025Bench: M.NAGAPRASANNA5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka held that the Show Cause Notice issued to the petitioner, requiring a reply within three days, was a violation of the principles of natural justice. The Court noted that the revenue did not dispute this fact. Consequently, the Court found merit in the petition on this sole ground. The Court also noted the submission by the revenue that an appeal had been preferred against the order and that the revenue would withdraw the said appeal. In light of these submissions, the Court deemed it appropriate to dispose of the petition by remitting the matter back to the Assessing Officer. The petitioner was directed to submit a reply to the Show Cause Notice within one week of receiving the order. The Assessing Officer was then to consider the reply in accordance with law and proceed accordingly. The issue regarding the correctness of cash deposits made to the bank, which was the basis for the Show Cause Notice, was to be verified by the Assessing Officer after receiving the petitioner's reply.

What were the facts?

The petitioner, Sri. Janigarakoppa Kuttappa Krishnappa, proprietor of Ramya Electricals and Irrigation, filed a writ petition before the High Court of Karnataka. The petition challenged an order dated 08-03-2025 passed by the National Faceless Assessing Officer (Respondent No. 2) and a consequent demand notice dated 08-03-2025. These were issued after a Show Cause Notice under Section 148 of the Income Tax Act, 1961, was served on the petitioner on 18.02.2025, requiring a reply by 21.02.2025. The petitioner contended that the notice period was insufficient, violating principles of natural justice. The revenue did not dispute this factual position.

What were the issues?

1. Whether the Show Cause Notice issued under Section 148 of the Income Tax Act, 1961, providing only three days for a reply, violates the principles of natural justice? Assessee's Contention: The petitioner argued that a minimum of seven days' notice should have been provided in the Show Cause Notice, and the given three-day period was insufficient, thus violating the principles of natural justice and rendering the subsequent order invalid. Revenue's Contention: The learned counsel for the respondents did not dispute the petitioner's narration of facts regarding the short notice period. The revenue further submitted that an appeal had been preferred against the order and undertook to withdraw it.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:32001 WP No. 23330 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 23330 OF 2025 (T-IT) BETWEEN:

SRI. JANIGARAKOPPA KUTTAPPA KRISHNAPPA, S/O LATE KUTTAPPA, AGED ABOUT 55 YEARS, PROPRIETOR: RAMYA ELECTRICALS AND IRRIGATION, RACECOURSE ROAD, HASSAN. R/O “SHRUSTI NILAYA”, II CROSS, II STAGE, JAYANAGAR, HASSAN – 573 202. …PETITIONER (BY SRI. MAHESH R.UPPIN, ADVOCATE) AND:

1.

INCOME TAX OFFICER, WARD 1 AND TPS, AAYAKAR BHAVAN, 2ND STAGE, BELUR ROAD, HASSAN – 573 201, BENGALURU – 560 001.

2.

ASSESSING OFFICER, NATIONAL FACELESS ASSESSING OFFICER, NEW DELHI – 110 001. …RESPONDENTS (BY SRI. TIRUMALESH M., ADVOCATE)

Digitally signed by NAGAVENI Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:32001 WP No. 23330 of 2025

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO I) QUASH THE ORDER DT: 08-03-2025 BEARING DIN NO. ITBA/AST/S/147/2024-25/1074232401(1) PASSED BY RESPONDENT NO.2 MARKED AS ANNEXURE -J AND THE DEMAND NOTICE DT- 08/03/2025 BEARING DIN AND NOTICE NO. ITBA/AST/S/156/2024-25/1074232430(1) ISSUED BY RESPONDENT NO.2 MARKED AS ANNEXURE -K BY ISSUING A WRIT IN THE NATURE OF CERTIORARI AND II). PASS SUCH OTHER ORDER AS DEEMS FIT TO GRANT UNDER THE CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE.

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

CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA

ORAL ORDER

Petitioner is before this Court seeking the following prayers: “i). Quash the Order dt: 08-03-2025 bearing DIN No. ITBA/AST/S/147/2024-25/1074232401(1) passed by Respondent No.2 marked as ANNEXURE "J" and the Demand Notice dt: 08/03/2025 bearing DIN & Notice No. ITBA/AST/S/156/2024-25/1074232430(1) issued by Respondent No.2 marked as ANNEXURE 'K' by issuing a writ in the nature of Certiorari; and ii). Pass such other order as deems fit to grant under the circumstances of the case in the interest of Justice.”

2.

Heard Sri.Mahesh R Uppin, learned counsel appearing for the petitioner, Sri.Tirumalesh M., learned counsel

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HC-KAR NC: 2025:KHC:32001 WP No. 23330 of 2025

appearing for the respondents and have perused the material on record.

3.

A Show Cause Notice comes to be issued against the petitioner on 18.02.2025 under Section 148 of the Income Tax Act, to submit a reply on or before 21.02.2025 which is barely three days after the issuance of the Show Cause Notice. Since the reply was not submitted, the order comes to be passed on 08.03.2025. It is this that is called in question.

4.

Learned counsel appearing for the petitioner submits that in the minimum, seven days notice ought to have been rendered in the Show Cause Notice and not three days and therefore, the order is passed in violation of the principles of natural justice. Learned counsel appearing for the respondents would not dispute the position as narrated herein above. In that light, the petition deserves to succeed on the sole ground of violation of principles of natural justice.

5.

Learned counsel for the petitioner submits that the Show Cause Notice is occasioned on the score that there is

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HC-KAR NC: 2025:KHC:32001 WP No. 23330 of 2025

incorrect 26AS Statement rendered by the bank. Therefore, on the reply being submitted, the Assessing Officer shall verify with the bank with regard to the correctness of the cash deposits made to the bank and then pass orders, in accordance with law.

6.

Learned counsel appearing for the respondents now submits that he has preferred appeal against the said order and would undertake to withdraw the said appeal.

7.

In the light of the said submission, I deem it appropriate to dispose the petition and remit the matter back to the hands of the Assessing Officer to consider the issue from the stage of seeking reply to the Show Cause Notice dated 18.02.2025. The petitioner shall now submit reply to the Show Cause Notice within one week from the date of receipt of copy of this order. In the event, reply is submitted within one week from the date of this order, the reply be considered in accordance with law and proceedings regulated thereafter.

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HC-KAR NC: 2025:KHC:32001 WP No. 23330 of 2025

8.

For the aforesaid reasons, the petition stands disposed.

Sd/- (M.NAGAPRASANNA) JUDGE

CBC List No.: 1 Sl No.: 369 CT:SS

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