SRI BIDHAN MANDALA vs. INCOME TAX OFFICER

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WP/201157/2025HC KarnatakaKAHC03005412202520 June 2025Bench: M.I.ARUN5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the impugned assessment order passed under Section 147 read with Sections 144 and 144B of the Income Tax Act, dated 28.02.2023, and the impugned penalty order passed under Section 271AAC(1) of the Income Tax Act, dated 11.08.2023, for the assessment year 2018-19. The matter was remanded back to respondent No.2 to consider the case of the petitioner from the stage of Section 143(2) notice. The Court further directed that if required, respondent No.2 shall verify the bank account of the petitioner by summoning the same from the bank for clarification. The reasoning was based on the submission of the revenue's counsel agreeing to a remand.

What were the facts?

The petitioner, Sri. Bidhan Mandala, filed a writ petition challenging several orders related to the assessment year 2018-19. The primary challenge was against a notice under Section 148A(b) dated 14.03.2022, an order under Section 148A(d) dated 30.03.2022, a notice under Section 148 dated 30.03.2022, an order under Section 147 read with Sections 144 and 144B dated 28.02.2023, and a penalty order under Section 274 read with Section 274AAC(1) dated 11.08.2023. The revenue had added Rs.1,41,27,500/- to the petitioner's income as unexplained money. The petitioner contended that the revenue ignored an explanation provided by a letter dated 26.03.2022.

What were the issues?

1. Whether the assessment order for the assessment year 2018-19, which added Rs.1,41,27,500/- as unexplained money to the petitioner's income, was passed erroneously by ignoring the petitioner's explanation dated 26.03.2022. Assessee's Contention: The petitioner argued that the revenue committed an error by ignoring the explanation provided in their letter dated 26.03.2022, and therefore, the notice of demand under Section 156 and the assessment order under Section 271AAC(1) should be set aside. Revenue's Contention: The learned counsel for respondent No.1 (Income Tax Officer) fairly submitted that the matter may be remanded back to respondent No.2 from the stage of Section 143(2) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 144B,Section 274,Section 271AAC(1),Section 156,Section 143(2)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC-K:3279 WP No. 201157 of 2025

IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 20TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR. JUSTICE M.I.ARUN

WRIT PETITION NO.201157 OF 2025 (T-IT) BETWEEN:

SRI. BIDHAN MANDALA, AGED ABOUT 69 YEARS, S/O MADHU SUDHAN MANDALA, KONGANDI VILLAGE, SHAHAPUR TALUK, YADGIR DISTRICT-585304 …PETITIONER

(BY SRI. S. V. RAVI SHANKAR, ADVOCATE)

AND:

1.

INCOME TAX OFFICER, WARD-1 YADGIR-585202.

2.

NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003.

3.

THE PRINCIPAL COMMISSIONER OF INCOME TAX HUBLI,

Digitally signed by SHIVALEELA DATTATRAYA UDAGI Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC-K:3279 WP No. 201157 of 2025

THE OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX HUBLI C. R. BUILDING, NAVANAGAR, HUBLI-580025. …RESPONDENTS

(BY SRI. M. THIRUMALLESH, ADVOCATE FOR R1 & R2 (VC); V/O DTD 13.06.25 NOTICE TO R3 DISPENSED WITH)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO I) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE UNDER SECTION 148A(B) OF THE AC DATED 14.03.2022, BEARING DIN NO.ITBA/AST/F/148A/ (SCN)/2021-22-1040677410(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A. II) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER UNDER SECTION 148A(D) OF THE ACT DATED 30.03.2022 BEARING DIN NO.ITBA/AST/F/148A/2021-22/1042039844(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A1. III) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE UNDER SECTION 148 OF THE ACT DATED 30.03.2022 BEARING DIN NO.ITBA/AST/S/148-1/2022-23/1042422208(1) ISSUED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A2. IV) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER PASSED U/S 147 R.W.S 144, 144B OF THE ACT DATED 28.02.2023 BEARING ITBA/AST/S/147/2022-23/1050192318(1) ISSUED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A3.V) ISSUE A WRIT OF

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HC-KAR NC: 2025:KHC-K:3279 WP No. 201157 of 2025

CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORAI QUASHING THE PENALTY ORDER U/S 274 R.W.S 274AAC(1) OF THE ACT DATED 11.08.2023 BEARING DIN NO.ITBA/PNL/F/271AAC(1)/2023- 24/1055082264(1) BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2018-19 HEREIN MARKED AS ANNEXURE-A4.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.I.ARUN

ORAL ORDER (PER: HON'BLE MR. JUSTICE M.I.ARUN)

The petitioner has challenged the assessment order for the assessment year 2018-2019 in the instant writ petition on the ground that, the revenue while passing the impugned order has considered Rs.1,41,27,500/- to be the unexplained money and added it to the income of the petitioner.

2.

The contention of the petitioner is that, an error has been committed by the revenue while coming to the said conclusion by ignoring the explanation given by the petitioner by a letter dated 26.03.2022 vide Annexure-B to

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HC-KAR NC: 2025:KHC-K:3279 WP No. 201157 of 2025

the writ petition. On the said ground it is prayed that the notice of demand under Section 156 of the Income Tax Act and assessment order under Section 271AAC(1) of the Income Tax Act be set aside.

3.

The learned counsel for respondent No.1 fairly submits that the matter may be remanded back to respondent No.2 from the stage of 143 (2) of Income Tax Act. Hence the following: ORDER The impugned assessment order passed under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, dated 28.02.2023 issued by the respondent No.2 for the assessment year 2018-19 vide Annexure-A3 is hereby set aside; The impugned penalty order under Section 271AAC(1) of the Income Tax Act, 1961, dated 11.08.2023 issued by the respondent No.2 for the assessment year 2018-19 vide Annexure-A4 is hereby set aside.

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HC-KAR NC: 2025:KHC-K:3279 WP No. 201157 of 2025

The matter stands remanded back to respondent No.2 to consider the case of the petitioner from the stage of Section 143(2) notice under the Income Tax Act.

If required respondent No.2 shall verify the bank account of the petitioner by summoning the same from the bank for clarification.

Sd/- (M.I.ARUN) JUDGE

SDU LIST NO.: 1 SL NO.: 75 CT:SI

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