YASHASWINI GRUHA NIRMANA SAHAKARA SANGHA NIYAMITHA vs. THE INCOME TAX OFFICER

PDF · subscribers
WP/24909/2025HC KarnatakaKAHC01053781202516 October 2025Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. It noted that the petitioner claimed non-receipt of notices and inability to respond due to bonafide reasons. The Court observed that the impugned order itself acknowledged that the petitioner had not submitted a reply or substantiated details. In light of the petitioner's assertion of bonafide reasons and a plea for one more opportunity, the Court found it just and appropriate to set aside the impugned order dated March 22, 2022, passed under Sections 201(1) and 201(1A), and the penalty order dated February 3, 2023, passed under Section 271C. The matter was remitted back to Respondent No. 2 for reconsideration from the stage of submitting the petitioner's reply to the notices. The petitioner was granted liberty to submit additional pleadings and documents, which the respondent was to consider before proceeding in accordance with law. The Court expressly did not decide on the merits of the substantive issues related to TDS liability.

What were the facts?

The petitioner, Yashaswini Gruha Nirmana Sahakara Sangha Niyamitha, filed a writ petition before the High Court of Karnataka challenging an order passed by the Income Tax Officer, TDS, Ward-2(4), Mysore (Respondent No. 2) under Sections 201(1) and 201(1A) of the Income Tax Act, 1961, for the assessment year 2015-16, dated March 22, 2022. The petitioner also challenged a penalty order dated February 3, 2023, passed by the Additional Commissioner of Income Tax (TDS) Range-1 (Respondent No. 3) under Section 271C of the Act for the same assessment year. The petitioner contended that it did not receive the notices dated July 7, 2021, and subsequent letters, and therefore could not submit a reply. The respondents argued that the petition lacked merit and should be dismissed.

What were the issues?

1. Whether the order passed under Sections 201(1) and 201(1A) of the Income Tax Act, 1961, dated March 22, 2022, by Respondent No. 2, and the penalty order passed under Section 271C of the Act dated February 3, 2023, by Respondent No. 3, are liable to be quashed? Assessee's Contentions: The petitioner argued that it did not receive the notices dated July 7, 2021, and subsequent letters issued under Sections 201(1) and 201(1A) of the Act. Consequently, it was unable to submit its reply and supporting documents due to bonafide reasons, unavoidable circumstances, and sufficient cause. The petitioner sought an opportunity to submit its response by setting aside the impugned orders. Revenue's Contentions: The learned counsel for the respondents submitted that there is no merit in the petition and that the same is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 201(1),Section 201(1A),Section 271C

AI-generated summary — verify with the full judgment below

- 1 -

HC-KAR NC: 2025:KHC:41790 WP No. 24909 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 24909 OF 2025 (T-IT) BETWEEN:

YASHASWINI GRUHA NIRMANA SAHAKARA SANGHA NIYAMITHA REGISTERED U/S 8 OF THE CO-OPERATIVE SOCIETIES ACT, 1959, NO.43, H D DEVEGOWDA CIRCLE, BANNUR ROAD, 1ST CROSS, NEAR RING ROAD, MYSORE – 570 012 TAN: BLRY00904B REPRESENTED BY ITS CEO, SRIKANTH M., AGED 60 YEARS, S/O MADAPPA NANJAIAH, NO.2675, 4TH CROSS, KALIDASA ROAD, V V MOHALLA, MYSORE – 570 010 …PETITIONER (BY SRI. RAVI SHANKAR S. V., ADVOCATE)

AND:

1.

THE INCOME TAX OFFICER TDS, WARD - 2(4),

MYSORE – 570 010.

2.

THE INCOME TAX OFFICER, TDS, WARD - 1, MYSORE – 570 008.

3.

THE ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) RANGE-1,

THE OFFICE OF ADDITIONAL

COMMISSIONER OF INCOME TAX (TDS) RANGE 1,

4TH FLOOR, HMT BHAVAN,

NO.59, BELLARY ROAD,

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

- 2 -

HC-KAR NC: 2025:KHC:41790 WP No. 24909 of 2025

BANGALORE – 560 032. …RESPONDENTS (BY SRI. ARAVIND V. CHAVAN, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER PASSED U/S 201(1) AND 201(1A) DATED 22/03/2022 BEARING DIN ITBA/COM/F/17/2021- 22/1041239893(1) PASSED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE-A 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 for the following reliefs:- “i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order passed U/s 201(1) & 201(1A) dated 22/03/2022 bearing DIN: ITBA/COM/F/17/2021-22/1041239893(1) passed by the Respondent No.2 for the assessment year 2015- 16 herein marked as Annexure - A. ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty order dated 03/02/2023 passed u/s 271C of the Act Vide DIN KAR/181/03022023/00306 by the Respondent No.3 for the assessment year 2015-16 herein marked as Annexure - A1.

- 3 -

HC-KAR NC: 2025:KHC:41790 WP No. 24909 of 2025

iii) Issue a writ of Mandamus or direction in the nature of a writ of mandamus, directing the respondent No.1 to summon the recipients in Annexure L, and secure the manner of treatment of the advances in the books of the recipients, in so for as petitioner consent. iv) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.”

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that notice dated 07.07.2021 and subsequent letters dated 14.09.2021, 29.10.2021, 27.12.2021 and 24.01.2022 issued by the respondent No.2 under Sections 201(1) and 201(1A) of the Income Tax Act, 1961 (for short, ‘IT Act’), was not received by petitioner and he was not aware of the notice and consequently, petitioner could not submit its reply / response along with documents to the said notice. It is submitted that the inability and omission on the part of the petitioner to submit reply / response along with documents to the notice under Sections 201(1) and 201(1A) of the Act was due to

- 4 -

HC-KAR NC: 2025:KHC:41790 WP No. 24909 of 2025

bonafide reasons, unavoidable circumstances and sufficient cause and as such, if one more opportunity is provided to the petitioner to do so by setting aside the impugned orders and notices, the petitioner would do so and respondents may be directed to 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 notice under Section 201(1) and 201(1A) as can be seen from the paragraph No.5 of the impugned order dated 22.03.2022, which reads as under: “5. Further, in response to this office letters cited above, the Deputy Registrar has neither submitted reply nor substantiated the details of TDS effected in the case of Yashaswini Gruha Nirmana Sahakara Sanga Niyamintha for the year under consideration (period 01.04.2014 to 31.03.2015). The chief executive officer has submitted the details of payment of TDS for the Financial year 2014-15 amounting to Rs.8,10,500/-. The details were verified with

- 5 -

HC-KAR NC: 2025:KHC:41790 WP No. 24909 of 2025

respect to available records and the data available in the system for the year under consideration.”

6.

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 with documents to notice under Sections 201(1) and 201(1A) was due to bonafide reasons, unavoidable circumstances and sufficient cause 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 – A dated 22.03.2022 passed under Sections 201(1) and 201(1A) of the Income Tax Act, the penalty order at Annexure-A1 dated 03.02.2023 passed under Section 271C of the Income Tax Act and subsequent notice / orders, etc., and remit the matter back to respondent No.2 for reconsideration afresh from the stage of submitting of reply by the petitioner to notice under Sections 201(1) and 201(1A) of the Income Tax Act and to proceed further in accordance with law. 6. In the result, pass the following:

- 6 -

HC-KAR NC: 2025:KHC:41790 WP No. 24909 of 2025

ORDER (i) The petition is hereby allowed. (ii) The impugned order at Annexure – A dated 22.03.2022 passed by respondent No.2 and the impugned penalty order at Annexure- A1 dated 03.02.2023 are hereby set aside. (iii) The matter is remitted back to respondent No.2 for reconsideration afresh in accordance with law from the stage of submitting of reply to the Notices under Sections 201(1) and 201(1A) of the IT Act at Annexures – D to D4 dated 07.07.2021, 14.09.2021, 29.10.2021, 27.12.2021 and 24.01.2022. (iv) Liberty is reserved in favour of the petitioner to submit additional pleadings, documents, etc., to the respondent, who shall consider the same and proceed further in accordance with law.

Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS List No.: 2 Sl No.: 30

More judgments on Section 201(1)

All 3,835 judgments and leading authorities on Section 201(1) →

Recent GST High Court judgments

Search GST case law →