KUMARA LINGAPPA vs. PRINCIPLE DIRECTOR OF INCOME TAX

PDF · subscribers
WP/9439/2025HC KarnatakaKAHC01020418202504 April 2025Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition without expressing any opinion on the merits or demerits of the rival contentions. The Court directed the Appellate Tribunal to dispose of Appeal No. 1200/BNG/2020, filed by the petitioner, within a period of six weeks from the date of receipt of a copy of the order. Furthermore, the Court directed that the impugned show cause notice dated 12.02.2025 (Annexure-B) shall remain in abeyance until the disposal of the appeal by the Appellate Tribunal. All contentions of the parties were kept open.

What were the facts?

The petitioner, Kumara Lingappa, filed a writ petition before the High Court of Karnataka challenging an order dated 26.08.2020 passed under Section 26(3) of the Benami Transactions (Prohibition) Act, 1988 (Benami Act) by the Adjudicating Authority (Respondent No. 3). The petitioner had already filed an appeal (Appeal No. 1200/BNG/2020) against this order, which was pending before the Appellate Tribunal. Despite the pendency of the appeal, the respondents issued a show cause notice dated 12.02.2025 under Section 3 of the Benami Act. The petitioner contended that this notice was issued beyond jurisdiction and arbitrarily while the appeal was pending. The respondents argued there was no legal bar to issuing a separate notice but suggested the appeal be disposed of within a stipulated time.

What were the issues?

1. Whether the show cause notice dated 12.02.2025, issued under Section 3 of the Benami Act, is beyond jurisdiction, arbitrary, and without authority of law, given the pendency of Appeal No. 1200/BNG/2020 before the Appellate Tribunal against an order passed under Section 26(3) of the Benami Act. Assessee's Contentions: - The Adjudicating Authority's order dated 26.08.2020, passed under Section 26(3) of the Benami Act, is under challenge in Appeal No. 1200/BNG/2020 before the Appellate Tribunal. - Despite the pendency of the appeal, the respondents have issued a show cause notice dated 12.02.2025 under Section 3 of the Benami Act. - The issuance of the show cause notice is beyond jurisdiction, arbitrary, and without authority of law. Revenue's Contentions: - There is no legal bar or embargo for the respondents to issue a separate notice under Section 3 of the Benami Act, despite the pendency of the appeal. - The present petition may be disposed of by directing the Appellate Tribunal to dispose of the appeal within a stipulated time frame.

Which sections of the Income-tax Act were involved?

Section 26(3),Section 3

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2025:KHC:14677 WP No. 9439 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 9439 OF 2025 (T-RES) BETWEEN:

KUMARA LINGAPPA S/O LINGAPPA AGED ABOUT 40 YEARS NO. 408, 15TH CROSS, NIMISHABA LAYOUT KUVEMPU NAGAR MYSORE - 570 023. …PETITIONER (BY SRI.VIKRAM A HUILGOL, SENIOR ADVOCATE FOR SRI. A MAHESH CHOWDHARY, ADVOCATE)

AND:

1.

PRINCIPAL DIRECTOR OF INCOME TAX INVESTIGATION CENTRAL REVENUE BUILDING, ANNEXE NO.1 QUEENS ROAD, BENGALURU-560 001.

2.

DEPUTY COMMISSIONER OF INCOME TAX BENAMI PROHIBITION UNIT CENTRAL REVENUE BUILDING, ANNEXE NO.1 QUEENS ROAD, BENGALURU-560 001.

3.

ADJUDICATING AUTHORITY UNDER BENAMI ACT

Digitally signed by KORLAHALLI BHARATHIDEVIKRISHNACHARYA Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2025:KHC:14677 WP No. 9439 of 2025

PARLIAMENT STREET NEW DELHI - 110 001. …RESPONDENTS (BY SRI.M DILIP, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 26.08.2020 BEARING REF NO. 1408/2019 UNDER SECTION 26(3) OF THE BENAMI ACT, 1988 VIDE ANNEXURE-A ISSUED BY THE RESPONDENT NO.3 IS BEYOND JURISDICTION, ARBITRARY AND WITHOUT AUTHORITY OF LAW HENCE NULL AND VOID AND QUASH THE SHOW CAUSE NOTICE DATED 12.02.2025 BEARING NO. ITBA/COM/F/17/2024-25/1073210407(1) UNDER 3 OF THE BENAMI ACT, 1988 VIDE ANNEXURE-B ISSUED BY THE RESPONDENT NO.1 IS BEYOND JURISDICTION, ARBITRARY AND WITHOUT AUTHORITY OF LAW HENCE NULL AND VOID.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, 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 direction in the nature of a writ of certiorari quashing the order dated 26.08.2020 bearing Ref No.1408/2019 under Section 26(3) of the Benami Act, 1988 vide Annexure A issued by the Respondent No.3 is beyond jurisdiction, arbitrary and without authority of law hence null and void; and

(ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the show cause notice dated 12.02.2025 bearing no. ITBA/COM/F/17/2024- 25/1073210407(1) under 3 of the Benami Act, 1988 vide Annexure B issued by the Respondent No.1 is beyond jurisdiction, arbitrary and without authority of law hence null and void.

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

- 3 -

NC: 2025:KHC:14677 WP No. 9439 of 2025

2.

Heard learned Senior Counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating various contentions urged in the petition and referring to the material on record, learned Senior Counsel for the petitioner submits that aggrieved by the order dated 26.08.2020, passed under Section 26(3) of the Benami Transactions (Prohibition) Act, 1988, vide Annexure-A, the petitioner has preferred an Appeal No.1200/BNG/2020, which is pending before the Appellate Tribunal. It is submitted that despite pendency of the said proceedings before the Appellate Tribunal, which is seized of the subject matter of the proceedings, the respondents have proceeded to issue the impugned show cause notice dated 12.02.2025 invoking Section 3 of the Benami Transactions (Prohibition) Act, vide Annexure-B and as such, the petitioner is before this Court by way of present petition. 4. Per contra, learned counsel for the respondents submits that, while there is no legal bar/embargo for the respondents to issue separate notice under Section 3 of the Benami Transactions

- 4 -

NC: 2025:KHC:14677 WP No. 9439 of 2025

(Prohibition) Act, despite pendency of the appeal. It is however submitted that the present petition may be disposed of, by directing the Appellate Tribunal to dispose of the appeal within a stipulated time frame. 5. In view of the aforesaid facts and circumstances of the case and undisputed fact that the appeal filed by the petitioner against the order dated 26.08.2020 is pending before the Appellate Tribunal, without expressing any opinion on the merits/demerits of the rival contentions, I deem it just and appropriate to dispose of the petition by directing the Appellate Tribunal to dispose of the appeal filed by the petitioner within a period of six weeks from the date of receipt of copy of this order. 6. In the result, pass the following: ORDER (i) The Petition is hereby disposed of.

(ii) The Appellate Tribunal is directed to dispose of Appeal No.1200/BNG/2020, filed by the petitioner within a period of six weeks from the date of receipt of copy of this order.

- 5 -

NC: 2025:KHC:14677 WP No. 9439 of 2025

(iii) It is further directed that, till disposal of the appeal by the Appellate Tribunal as stated supra, the impugned show cause notice dated 12.02.2025, vide Annexure-B shall remain in abeyance.

All contentions of the parties are kept open and no opinion is expressed on the same.

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

BK List No.: 1 Sl No.: 34

More judgments on Section 3

All 288 judgments and leading authorities on Section 3 →

Recent GST High Court judgments

Search GST case law →