M/S HOTEL PALIKA vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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WP/11935/2025HC KarnatakaKAHC01026192202509 July 2025Bench: SURAJ GOVINDARAJ4 pages
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What did the High Court hold?

The High Court allowed the writ petition. It issued a writ of certiorari and quashed the order dated 23.10.2024 passed by Respondent No. 1 under Section 119(2)(b) of the Income Tax Act, 1961. The Court reasoned that since the mistake was on the part of the Department in wrongly validating the petitioner's revised return, there would be no requirement for condoning the delay. The Court directed Respondent No. 2 (Income Tax Officer) to process the returns by considering them to be in time, in view of the validation made by Respondent No. 3. The principle established is that if a departmental error leads to an unsustainable order, the Court can quash such an order and direct appropriate processing of returns.

What were the facts?

The petitioner, M/s Hotel Palika, a partnership firm, filed a writ petition before the High Court of Karnataka. The petition challenged an order dated 23.10.2024 passed by the Principal Commissioner of Income Tax (Respondent No. 1) under Section 119(2)(b) of the Income Tax Act, 1961. This order pertained to the assessment year 2022-23. The petitioner sought to quash this order and sought a direction to condone the delay in filing a revised return of income, allowing them to declare income in accordance with law. The respondents included the Principal Commissioner of Income Tax, the Income Tax Officer, Ward-1 and TPS, Hassan, and the Centralized Processing Centre.

What were the issues?

1. Whether the order dated 23.10.2024 passed by the Principal Commissioner of Income Tax under Section 119(2)(b) of the Income Tax Act, 1961, for Assessment Year 2022-23, is liable to be quashed? (Question of law and fact, concerning the validity of the order passed under Section 119(2)(b)). Assessee's Contention: The petitioner sought to quash the order and sought a direction to condone the delay in filing a revised return of income, to permit filing a revised return to declare income in accordance with law. Revenue's Contention: The learned counsel for Respondent No. 3 (Centralized Processing Centre) submitted that the revised return of income submitted by the petitioner has now been validated by Respondent No. 3. Once the revised return is validated, the order under Section 119(2)(b) would not be sustainable.

Which sections of the Income-tax Act were involved?

Section 119(2)(b)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:25061 WP No. 11935 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 11935 OF 2025 (T-IT)

BETWEEN:

M/S HOTEL PALIKA, PARTNERSHIP FIRM RC ROAD, HASSAN 573201 PAN: AAFFH3159N

REPRESENTED BY, H J GANESH, AGED 51 YEARS, S/O LATE H B JAYAKUMAR, SANTRUPTHI, SALAGAME ROAD, HASSAN-573201. …PETITIONER (BY SRI. RAVI SHANKAR S V., ADV.)

AND:

1.

THE PRINCIPAL COMMISSIONER OF INCOME TAX, BANGALORE-3 BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE-560095. 2. INCOME TAX OFFICER, WARD-1 AND TPS, HASSAN-573201.

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:25061 WP No. 11935 of 2025

3.

THE CENTRALIZED PROCESSING CENTRE POST BAG NO.2, ELECTRONIC CITY POST OFFICE, BANGALORE - 560500 …RESPONDENTS (BY SRI. M THIRUMALESH,ADVOCATE FOR R1 AND R2, SRI. ARAVIND V CHAVAN, ADVOCATE FOR R3)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER UNDER SECTION 119(2)(b) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DTD. 23.10.2024 PASSED BY THE R-1 IN DIN NO. ITBA/COM/F/17/2024-25/1069872475(1) FOR THE ASSESSMENT YEAR 2022-23 (ANNX-A) AND ETC.

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

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

1.

Petitioner is before this Court seeking for following reliefs:

i. Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the order under Section 119(2)(b) of the Income Tax Act, 1961 (for short 'the Act') dated 23.10.2024 passed by respondent No.1 in DIN No.ITBA/COM/F/17/2024-25/1069872475(1)

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HC-KAR NC: 2025:KHC:25061 WP No. 11935 of 2025

for the assessment year 2022-23 (Annexure- A);

ii. Issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus directing the respondents to condone the delay in filing the revised return of income for the assessment year 2022-23 and to permit the petitioner to file a revised return of income in order to declare income in accordance with law and

iii. And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.

2.

Sri. Aravind V Chavan, learned counsel for respondent No.3 on instructions submits that the revised return of income submitted by the petitioner is now been validated by Respondent No.3 and once the revised return of income submitted by the petitioner is validated, the order under Section 119(2)(b) of the Income Tax Act, 1961 (for short 'the Act') would not be sustainable.

3.

As such, I proceed to pass the following: ORDER i. Writ Petition is allowed. ii. Certiorari is issued and the order dated 23.10.2024 passed under Section 119(2)(b) of the Act by respondent No.1 at Annexure-'A' is hereby quashed.

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HC-KAR NC: 2025:KHC:25061 WP No. 11935 of 2025

iii. Since the mistake is on the part of the Department in wrongly validating the revised return of the petitioner, there will be no requirement for condoning the delay and it is for respondent No.2 to process the returns in view of validation made by respondent No.3, by considering it to be in time.

SD/- (SURAJ GOVINDARAJ) JUDGE

SSD List No.: 1 Sl No.: 37

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