HARISH BABU NEKKUNDI SRINIVASA REDDY vs. INCOME TAX OFFICER

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WP/1127/2024HC KarnatakaKAHC01000873202415 December 2025Bench: S.R.KRISHNA KUMAR8 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. It was an undisputed fact that the petitioner had not submitted a reply to the Section 153C notice. However, considering the petitioner's assertion that his omission was due to bonafide reasons, unavoidable circumstances, sufficient cause, and the COVID-19 pandemic, and that he would submit a reply if granted another opportunity, the Court found it just and appropriate to set aside the impugned order dated June 18, 2021, passed under Section 153C read with Section 144 of the Income Tax Act, along with subsequent notices and orders. The matter was remitted back to the respondent for reconsideration from the stage of the petitioner submitting a reply to the Section 153C notice, to be proceeded with in accordance with law. The ratio is that where an assessee demonstrates bonafide reasons and sufficient cause, including pandemic-related disruptions, for non-compliance with statutory notices, the tax authorities should grant an opportunity for compliance before passing adverse orders.

What were the facts?

The petitioner, Harish Babu Nekkundi Srinivasa Reddy, filed a writ petition before the High Court of Karnataka challenging several orders and notices issued by the Income Tax Officer and Assistant Commissioner of Income Tax for the Assessment Year 2016-17. These included an order under Section 153C read with Section 144, penalty orders under Section 271F and Section 271(1)(c), and consequential demand notices under Section 156. The petitioner's original returns for AY 2016-17 were found to be not e-verified, rendering them invalid. A notice under Section 153C was issued on June 6, 2019, followed by show cause notices under Section 142(1). The petitioner contended that he could not respond to these notices due to bonafide reasons, unavoidable circumstances, sufficient cause, and the COVID-19 pandemic.

What were the issues?

1. Whether the impugned order passed under Section 153C read with Section 144 of the Income Tax Act, 1961, dated June 18, 2021, and subsequent penalty and demand notices for Assessment Year 2016-17 are liable to be quashed and set aside on the grounds of the petitioner's inability to respond due to bonafide reasons, unavoidable circumstances, sufficient cause, and the COVID-19 pandemic. Assessee's Contention: The petitioner argued that his failure to submit a reply to the Section 153C notice and subsequent notices was due to bonafide reasons, unavoidable circumstances, sufficient cause, and the impact of the COVID-19 pandemic. Therefore, the impugned order should be set aside, and the matter should be remitted back for reconsideration from the stage of submitting a reply to the Section 153C notice. Revenue's Contention: The revenue contended that there is no merit in the petition and that it is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 153C,Section 144,Section 142(1),Section 271F,Section 271(1)(c),Section 156

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:53366 WP No. 1127 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 1127 OF 2024 (T-IT) BETWEEN:

HARISH BABU NEKKUNDI SRINIVASA REDDY AGED ABOUT 59 YEARS S/O LATE SRINIVAS REDDY RAMAIAH NEKKUNDI RA/.T N R SRINIVASA REDDY COLONY DODDANEKUNDI POT BANGALORE 560 037.

…PETITIONER (BY SRI. BALRAM R RAO.,ADVOCATE)

AND:

1.

INCOME TAX OFFICER WARD NO.4(2)(3) BMTC BUILDING

80 FEET ROAD, KORAMANGALA

BANGALORE 560 095.

2.

ASSISTATNT COMMISSIONER OF ICOME TAX CENTRAL CIRCLE 2(4) CETRAL REVENUE BUILDING

QUEENS ROAD,

BENGALORE - 560 001. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE)

THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA CALLING FOR THE RECORDS AND OF THE PETITIONERS CASE AND AFTER EXAMINING THE LEGALITY AND VALIDITY THEREOF BE PLEASED TO QUASH THE SET ASIDE THE IMPUGNED ORDER PASSED UNDER SECTION 153C R.W.S. 144 OF THE ACT DATED 18/06/2021 IN DIN AND NOTICE AND DIN ORDER NO. ITBA/AST/S/153C/2021-22/1033545107(1) (ANNEXURE-G) AS WELL AS NOTICE OF DEMAND ISSUED UNDER SECTION 156 OF THE ACT IN DIN

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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AND NOTICE NO. ITBA/AST/S/156/2021-22/1033545156(1) (ANNEXURE-G1), ORDER PASSED U/S 271F OF THE ACT DATED 12/02/2022 IN DIN AND ORDER NO. ITBA/PNL/F/271F/2021-22/1039682611(1) (ANNEXURE-N) AS WELL AS NOTICE OF DEMAND ISSUED UNDER SECTION 156 OF THE ACCT IN DIN AND NOTICE NO. ITBA/AST/S/156/2021-22/1039677703(1) (ANNEXURE-N1) AND ORDER PASSED U/S 271(1)(c) OF THE ACT IN DIN AND ORDER NO. ITBA/PNL/F/271(1)(c)/2021-22/1040163532(1) (ANNEXURE-P) AS WELL AS NOTICE OF DEMAND ISSUED UNDER SECTION 156 OF THE ACT DATED 28/02/2022 AND IN DIN AND NOTICE NO. ITBA/AST/S/156/2021-22/1040163429(1) (ANNEXURE-P1) PASSED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2016-17 AND ETC.

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

CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER In this petition, petitioner seeks the following reliefs:

“ i) Issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate wit, order or direction under Article 226 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality and validity thereof be pleased to quash and set aside the impugned order passed under section 153Cr.w.s 144 of the Act dated 18.06.2021 in DIN & Notice No: DIN & Order No: ITBA/AST/S/153C/2021-22/1033545107(1) [ANNEXURE -G] as well as notice of demand issued under section 156 of the Act in DIN & Notice No. ITBA/AST/S/156/2021-22/1033545156(1) [ANNEXURE - G1], order passed u/s. 271F of the Act dated 12.02.2022 in DIN & Order No: ITBA/PNL/F/271F/2021-22/1039682611(1) [ANNEXURE - N] as well as notice of demand issued under

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HC-KAR NC: 2025:KHC:53366 WP No. 1127 of 2024

section 156 of the Act in DIN & Notice No. ITBA/PNL/F/156/2021-22/1039677703 (1) [ANNEXURE-N1] and order passed u/s. 271(1)(c) of the Act in DIN Order Nos ITBA/PNL/F/271(1)(c)/2021-22/1040163532(1) [ANNEXURE-P] as well as notice of demand issued under section 156 of the Act dated 28.02.2022 in DIN & Notice No. ITBA/PNL/S /156/2021- 22/1040163429(1) [ANNEXURE- P1] passed by the Respondent for the Assessment Year 2016-17, and

ii. Issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality and validity thereof be pleased to quash and set aside the impugned order passed under section 153C r.w.s 144 of the Act dated 18.06.2021 in DIN & Notice No: DIN & Order No ITBA/AST/S/153C/2021-22/1033545107(1) [ANNEXURE G] as well as notice of demand issued under section 156 the Act in DIN & Notice No. ITBA/AST/S/156/2021 22/1033545156(1) [ANNEXURE-G1] for the Assessment Year 2016-17 passed by the Respondent,

iii. A Writ of Mandamus or a Writ in the nature of Mandamus, or any other appropriate Writ, Order or Direction under Article 226 of the Constitution of India ordering and directing the Respondents by themselves, their subordinate, servants and agents to withdraw and cancel the impugned order passed under section 153C r.w.s 144 of the Act dated 18.06.2021 Notice No: DIN & DIN

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HC-KAR NC: 2025:KHC:53366 WP No. 1127 of 2024

& in Order No: ITBA/AST/S/153C/2021-22/1033545107(1) [ANNEXURE - G] as well as notice of demand issued under section 156 of the Act in DIN & Notice No. ITBA/AST/S/156/2021-22/1033545156(1) [ANNEXURE G1], order passed u/s. 271F of the Act dated 12.02.2022 in DIN & Order No: ITBA/PNL/F/271F/2021-22/1039682611(1) [ANNEXURE N] as well as notice of demand issued under section 156 of the Act in DIN & Notice No. ITBA/PNL/F/156/2021-22/1039677703 (1) [ANNEXURE-N1] and order passed Order No: u/s. 271(1)(c) of the Act in DIN & ITBA/PNL/F/271(1)(c)/2021-22/1040163532(1) [ANNEXURE - P] as well as notice of demand issued under section 156 of the Act dated 28.02.2022 in DIN & Notice No. ITBA/PNL/S/156/2021-22/1040163429(1) [ANNEXURE-P1] passed by the Respondent for the Assessment Year 2016- 17, and

iv. A Writ of Prohibition or a Writ in the nature of Prohibition or any other appropriate writ, order or direction under Article 226 of the Constitution of India prohibiting and restraining the Respondents by themselves, their subordinate, servants and agents from taking any action in furtherance of consequent to impugned order passed under section 153C r.w.s 144 of the Act dated 18.06.2021 in DIN & Notice No: DIN & Order No: ITBA/AST/S/153C/2021- 22/1033545107(1) [ΑΝΝEXURE G] as well as notice of demand issued under section 156 of the Act in DIN & Notice No. ITBA/AST/S/156/2021-22/1033545156(1) [ANNEXURE -G1], order passed u/s. 271F of the Act dated 12.02.2022 in DIN & Order No: ITBA/PNL/F/271F/2021-22/1039682611(1)

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[ANNEXUREN] as well as notice of demand issued under section 156 of the Act in DIN & Notice No. ITBA/PNL/F/156/2021-22/1039677703 [ANNEXURE-N1] and order passed u/s. 271(1)(c) of the Act in DIN & Order No: ITBA/PNL/F/271(1)(c)/2021-22/1040163532(1) [ANNEXURE P] as well as notice of demand issued under section 156 of the Act dated 28.02.2022 in DIN & Notice No. ITBA/PNL/S/156/2021-22/1040163429(1) [ANNEXURE-P1] passed by the Respondent for the Assessment Year 2016- 17 and

v. Grant the interim relief in terms of prayer (iii) above, and

vi. Issue such other order, writ or direction as this Hon'ble Court deems fit; and

vii. Direct the Respondents to pay the costs of this Writ Petition.” 2. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record.

3.

A perusal of the material on record will indicate that returns filed by the petitioner for the Assessment year 2016-17 were found not e-verified and the said returns came to be identified as invalid resulting in issuance of notice under Section 153(C) of the Income Tax Act dated 06.06.2019 followed by the Show Cause

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HC-KAR NC: 2025:KHC:53366 WP No. 1127 of 2024

Notice under Section 142(1) dated 14.12.2019 issued by the respondent to the petitioner. It is contended that due to bonafide reasons, unavoidable circumstances and sufficient cause and due to Covid-19 pandemic, the petitioner could not submit reply to the aforesaid notice as well as the subsequent notices dated 17.11.2020 and 13.04.2021 issued under Section 142(1) of the Income Tax Act and as such, the impugned order dated 18.06.2021 passed by the respondent under Section 153C deserves to be set aside and remit the matter back to the stage of petitioner submitting reply to the notice under Section 153C and proceed further in accordance with law.

4.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.

5.

A perusal of the impugned order will indicate that it is an undisputed fact that petitioner has not submitted reply / response along with documents to Section 153C notice. Under these circumstances, in view of the specific assertion on the part of the petitioner that his inability and omission to submit a reply along

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HC-KAR NC: 2025:KHC:53366 WP No. 1127 of 2024

with documents to Section 153C notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and Covid-19 pandemic and if one more opportunity is granted, petitioner would submit reply along with documents, I deem it just and appropriate to set aside the impugned order at Annexure – G dated 18.06.2021 passed under 153C read with Section 144 of the Income Tax Act and subsequent notice / orders, etc., and remit the matter back to respondent for reconsideration afresh from the stage of submitting of reply by the petitioner to Section 153C notice and to proceed further in accordance with law.

6.

In the result, I pass the following: ORDER

(i) The petition is hereby allowed.

(ii) The impugned orders / notices at Annexure – G, G1, N, N1, P and P1 dated 18.06.2021, 18.06.2021, 12.02.2022, 11.02.2022, 28.02.2022 and 28.02.2022, respectively passed by the respondent are hereby set aside.

(iii) Matter is remitted back to the stage of petitioner submitting reply to the Show Cause Notice dated 06.06.2019

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under Section 153C of the Income Tax Act and proceed further in accordance with law.

Sd/- (S.R.KRISHNA KUMAR) JUDGE

SV List No.: 2 Sl No.: 0

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