MR. SURESH KUMAR CHANNAPPA vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP/19104/2025HC KarnatakaKAHC01043103202502 July 2025Bench: SURAJ GOVINDARAJ8 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition. The Court found that there was no document placed on record evidencing the service of notice on the petitioners, who are legal heirs of the deceased assessee. Consequently, the assessment order and the notice of demand dated 15.04.2025 were quashed. The matter was remitted to the first respondent (Assistant Commissioner of Income-Tax) for fresh consideration. The petitioners were directed to appear before the first respondent on 22.07.2025 without further notice, along with their documents and objections. The first respondent was directed to consider these objections, permit the petitioners to examine and cross-examine witnesses, and pass necessary orders. All contentions regarding the Section 148 notice were kept open. The department was also permitted to bring on record any other legal heirs of Sri Channappa. The Court noted the lack of integration between the postal department and the Income Tax Department for tracking notice service.

What were the facts?

The petitioners, Mr. Suresh Kumar Channappa and Mr. Mahesh Kumar Channappa, are legal heirs of the late Sri Channappa. They filed a writ petition before the High Court of Karnataka challenging an assessment order dated 15.04.2025, a notice of demand dated 15.04.2025, and a notice dated 31.08.2024, all pertaining to Assessment Year 2016-17 and issued by the Assistant Commissioner of Income-Tax. The core grievance was that the petitioners, as legal heirs, were not brought on record in the assessment proceedings concerning their deceased father. The assessment order had been passed by the first respondent, Assistant Commissioner of Income-Tax, under Section 147 read with Section 143(3) of the Income-Tax Act, 1961. The notice under Section 148 was also issued by the first respondent.

What were the issues?

1. Whether the assessment order dated 15.04.2025, notice of demand dated 15.04.2025, and notice dated 31.08.2024, issued under Sections 147, 143(3), 156, and 148 of the Income-Tax Act, 1961, for Assessment Year 2016-17, are liable to be quashed on the ground that the petitioners, as legal heirs of the deceased assessee Sri Channappa, were not properly brought on record? Assessee's Contention: The petitioners argued that as legal heirs of the late Sri Channappa, they ought to have been brought on record in the assessment proceedings. They contended that only the deceased's wife and another sibling were brought on record, excluding the petitioners. Therefore, they sought an opportunity to present their case. Revenue's Contention: The revenue submitted that notices had been issued to the petitioners and that the original file was available for inspection. However, they were unable to produce any acknowledgment of service, only dispatch receipts from the postal department.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 156,Section 148

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 19104 OF 2025 (T-IT) BETWEEN:

1.

MR. SURESH KUMAR CHANNAPPA AGED 56 YEARS, SON OF LATE SHRI CHANNAPPA RESIDING AT NO. 391/141, 19TH MAIN ROAD, NEAR NARAYANA COLLEGE, 1ST BLOCK, RAJAJINAGAR, BANGALORE – 560 010. 2. MR. MAHESH KUMAR CHANNAPPA AGED ABOUT 45 YEARS, SON OF LATE SHRI CHANNAPPA, RESIDING AT 116, 6TH MAIN ROAD, 2ND STAGE, MALAGALA BUS STOP, 8TH BLOCK, NAGARBHAVI. BANGALORE – 560 072

…PETITIONERS (BY SRI. SANDEEP HUILGOL.,ADVOCATE)

AND:

1.

ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(4), BENGALURU, CENTRAL REVENUE BUILDING, NO. 1, QUEENS ROAD, BENGALURU – 560 001 2. INCOME-TAX OFFICER (INV.), UNIT 1(1), BENGALURU CENTRAL REVENUE BUILDING,

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

NO. 1, QUEENS ROAD, BENGALURU – 560 001

3.

PRINCIPAL COMMISSIONER OF INCOME TAX, BENGALURU , CENTRAL REVENUE BUILDING, NO. 1, QUEENS ROAD, BENGALURU – 560 001 4. DIRECTOR GENERAL OF INCOME-TAX (INV.) CENTRAL REVENUE BUILDING, NO. 1, QUEENS ROAD, BENGALURU – 560 001.

5.

PRINCIPAL COMMISSIONER OF INCOME TAX, BENGALURU 2, CENTRAL REVENUE BUILDING, NO. 1, QUEENS ROAD, BENGALURU – 560 001

6.

COMMISSIONER OF INCOME-TAX, CENTRAL RANGE 2, BENGALURU CENTRAL REVENUE BUILDING, NO. 1, QUEENS ROAD, BENGALURU – 560 001

7.

DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(4), BENGALURU C.R. BUILDING, NO. 1, QUEENS ROAD, BENGALURU – 560 001.

…RESPONDENTS (BY SRI.M.DILIP, ADVOCATES FOR R1 TO R7)

THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED ASSESSMENT ORDER DATED 15.04.2025 BEARING

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

DIN AND ORDER NO. ITBA/AST/M/147/2025- 26/1075635128(1) PASSED BY THE 1 RESPONDENT UNDER SECTION 147 READ WITH SECTION 143(3) OF THE INCOME- TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2016-17 (ANNEXURE A)(II) QUASHING THE IMPUGNED NOTICE OF DEMAND DATED 15.04.2025 BEARING DIN AND ORDER NO. ITBA/AST/M/147/2025-26/1075635133(1) ISSUED BY THE 1ST RESPONDENT UNDER SECTION 156 OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2016-17 (ANNEXURE A1)(III) QUASHING THE IMPUGNED NOTICE DATED 31.08.2024 BEARING DIN AND NOTICE NO. ITBA/COM/M/17/2024- 25/1068212979(1) ISSUED BY THE 1ST RESPONDENT UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2016-17 (ANNEXURE G) AND IN TO PAS AL PETITIONERS CONCERNED.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

1.

The petitioners are before this Court seeking the following relief: a) “Quashing the Impugned Assessment Order dated 15.04.2025 bearing din and order no. ITBA/AST/M/147/2025-26/1075635288(1) passed by the 1st Respondent Under Section 147 read with section 143(3) of the Income-Tax Act, 1961 for the Assessment Year 2016-17 (Annexure-A)

b) Quashing the impugned notice of demand dated 15.04.2025 bearing din and order NO.ITBA/AST/M/147/2025-26/1075635294(1) issued by the 1st respondent under section 156 of the income-tax act, 1961 for the assessment year 2016- 17 (annexure-a-1) and etc.

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

c) Quashing the Impugned notice dated 31.08.2024 bearing din and notice no. ITBA/COM/M/17/2024- 25/1068215811(1) issued by the 1st Respondent under Section 148 of the Income-Tax Act, 1961 for the Assessment Year 2016-17 (Annexure-G) and in so far as petitioners concerned.

d) Pass such order or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity.”

2.

A short grievance of the petitioners is that the petitioners, being the legal heirs of Sri. late Channappa, were not brought on record as legal heirs of the said Sri.Channappa by the second respondent in terms of the order at Annexure-A dated 15.04.2025. 3. The submission of Sri Sandeep Hoilgol, learned counsel for the petitioners, is that the assessment was regarding the late Sri Channappa, and as such, all his legal heirs are to be brought on record. Only his wife and another sibling have been brought on record. The petitioners, who are also the children of the late Sri.Channappa, had not been brought on record. And as such, he submits that an opportunity

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

has to be provided to the petitioners to place their say on record to enable respondent No.1 to pass appropriate orders. 4. Sri M.Dilip, learned counsel for the respondents submits that notice had been issued to the petitioners and in regard thereto, the original file is made available for inspection with the original registered post receipts. 5. On enquiry with him as to whether the said notice has been served on and any acknowledgment is available, he is unable to place the same on record since what is maintained by the Income Tax Department is only the receipts issued by the Postal Department for registered post which have been dispatched by the Income Tax Department. 6. It is rather surprising that the Postal Department and the Income Tax Department have not been integrated. When this Court has integrated with the Postal Department to provide real-time tracking of all

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

the notices issued by this Court to the concerned litigants, it would be for the Income Tax Department also to have proper postal integration, and thereby proper and adequate records are maintained as regards service of notices by the registered post acknowledgment due. Of course, this being in respect of notices served otherwise through by way of email. 7. In view of the fact that there is no document that has been placed on record evidencing service of notice on the petitioners and the petitioners being on record as legal heirs of the late Sri.Channappa, I am of the considered opinion that orders could not have been passed by respondent No.1 against the petitioners by showing them as parties to the said order without there being a notice issued and served. 8. In that view of the matter, I pass the following:

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

ORDER i) The writ petition is allowed. ii) The assessment order dated 15.04.2025 at Annexure-A and the impugned notice of demand dated 15.04.2025 at Annexure-A1, are quashed. iii) The matter is remitted to the first respondent for fresh consideration. iv) Since the order is passed in the presence of learned counsel for the petitioners and the respondents, the petitioners shall appear before respondent No.1 without requirement of any further notice at 2.30 p.m. on 22.07.2025. v) Any documents relied upon by the petitioners and any objections to be filed by the petitioners shall be filed on the very same date. vi) Respondent No.1 is directed to consider the said objections and permit the petitioners to examine and cross-examine the witnesses in the matter and after hearing the petitioners to pass necessary orders in accordance with law.

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HC-KAR NC: 2025:KHC:23777 WP No. 19104 of 2025

vii) All contentions in respect of the Section 148 notice are kept open. viii) If there are any other legal heirs of Sri.Channappa, the department is permitted to bring them on record. ix) Though the above petition is allowed, to report compliance with para 6 above, re- list on 30.07.2025.

SD/- (SURAJ GOVINDARAJ) JUDGE

KTY List No.: 1 Sl No.: 55

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