Prathamika Krishi Pathina Sahakara v. Commissioner of Income Tax (Appeals)

e -e1e-eeeee e e NC:(2026:KHC:23676 WP(No.(12481(of(2026 IN(THE(HIGH(COURT(OF(KARNATAKA(AT(BENGALURU( THDATED(THIS(THE(28 (DAY(OF(APRIL,(2026( BEFORE( THE(HON'BLE(MR.(JUSTICE(S(SUNIL(DUTT(YADAV( WRIT(PETITION(NO.(12481(OF(2026((T-IT) BETWEEN:( PRATHAMIKA,KRISHI,PATHINA,SAHAKARA,, SANGHA,NIYAMITHA,, CHANNARAYAPATNA,ROAD,,, KAREKERE,,KAREKERE,, TUMAKURU-,573,225,,, (A,SOCIETY,REGISTERED,UNDER,KCS,ACT,,1959), REP.,BY,ITS,CEO,,, MR.,MAHESHA,K.,B.,, S/O.,BOREGOUDA,K.N.,,, AGE,52,YEARS,,, R/O.,NEAR,TANVI,TRISHA,KALYANA,MANTAPA,, CHIKKA,HONNENAHALLI,,, HASSAN-573,202., Digitally signedtiby …PETITIONER, VIJAYA0P Location: (BY,SRI.,GIRISH,V,BHAT.,,ADVOCATE), HIGH COURT0OF AND:KARNATAKA

1., COMMISSIONER,OF,INCOME,TAX,(APPEALS),, NATIONAL,FACELESS,APPEAL,CENTRE,,, DELHI,-,110,001.,

2., ASSESSING,OFFICER,, NATIONAL,FACELESS,ASSESSMENT,CENTRE,,, DELHI,-,110,001., e -e2e-eeeee e e NC:(2026:KHC:23676 WP(No.(12481(of(2026

3., INCOME,TAX,OFFICER,, WARD,1,AND,TPS,,, NDAAYAKAR,BHAVAN,,2 ,STAGE,,, BELUR,ROAD,,, HASSAN,-,573,201.,

4., THE,BRANCH,MANAGER,, HASSAN,DISTRICT,CENTRAL,CO-OPERATIVE,, BANK,LTD.,, UNNATHI,,B.,M.,ROAD,,, HASSAN-573,201., …RESPONDENTS, (BY,SRI.,M.,THIRUMALESH,,ADVOCATE), , THIS, WP, IS, FILED, UNDER, ARTICLES, 226, AND, 227, OF, THE, CONSTITUTION, OF, INDIA, PRAYING, TO, QUASHING, THE, IMPUGNED, BANK, A/C, ATTACHMENT, ORDER/NOTICE, UNDER, SEC.,226(3),OF,THE,ACT,DATED,31.03.2026,,PASSED,BY,THE, RD3 , RESPONDENT, BEARING, NO.ITBA/COM/F/17/2025-, 26/1088167501(1),VIDE,ANNEXURE-F,TO,THE,WRIT,PETITION, AND,ETC.,,, , THIS, PETITION,, COMING, ON, FOR, PRELIMINARY, HEARING,,THIS,DAY,,ORDER,WAS,MADE,THEREIN,AS,UNDER:, CORAM:, HON'BLE,MR.,JUSTICE,S,SUNIL,DUTT,YADAV

ORAL ORDER The petitioner has filed an application seeking for amendment of the petition. The amendment relates to the prayer column whereby the petitioner seeks to assail validity of the impugned assessment order as well as the demand notice. Certain additional amendments are sought including as regards the name of the petitioner.

In light of the averments and submissions made, I.A.No.2/2026 filed under VI Rule 17 of CPC is allowed. Amended petition filed is taken on record.

¶2The petitioner has assailed the validity of the assessment order at Annexure-C. It is noticed that the authorities have picked up the petitioner's return while construing it to be 'High Risk Non-Filer' in terms of the risk management strategy formulated by the Central Board of Direct Taxes.

¶3It is further noticed that the authority has taken note of cash deposits as well as withdrawal which are substantial in nature. From the assessment order, it is noticed that petitioner has not made out any reply to the notice issued under Section 148 of the Income Tax Act, 1961 (for short, 'the Act') and proceedings pursuant thereto, though many of the notices and communication have been delivered to the petitioner. It is submitted that the lapse was required to be condoned as the auditor has not communicated such of the proceedings to the petitioner.

¶4The authority has proposed variations. Having taken note of the substantial cash deposits as well as withdrawal, adjudication is completed on the basis of material available. The authority has recorded conclusion including that the petitioner has failed to substantiate the documentary evidence as regards nature and sources of cash deposits. The authority has also disallowed deduction under Section 80P and completed the adjudication.

¶5Learned counsel for the petitioner submits that if the matter is remitted to the stage of reply to show-cause notice, the petitioner would make out a reply and produce relevant material to demonstrate that the deposits which are treated as unexplained money are in-fact the deposits of the members who are farmers. It is further submitted that material would be placed to demonstrate that the petitioner is entitled for exemption under Section 80P of the Act.

¶6Taking note of such submission and though we find that there is a lapse on part of the petitioner in not participating in the proceedings, however, matter may be remitted by putting the petitioner on terms.

¶7Insofar as pendency of appeal is concerned, the petitioner submits that the said appeal would be withdrawn as the appeal was filed belatedly and in all probability, the authority without having power to condone delay, would dismiss the appeal. In light of the

undertaking made to withdraw the appeal, the Court after noticing the delay would enter into the correctness and validity of the assessment order itself.

¶8Accordingly, in light of the submissions made and having noticed the assessment order and findings recorded, the present case is a fit case to set aside the assessment order and remit the matter to the stage of reply to 148A(b) notice.

¶9Accordingly, the orders at Annexures-C, D and F are set aside, as also all other proceedings pursuant to the Section 148 notice. Matter is remitted to the stage of reply to notice issued under Section 148A(b). Petitioner to appear before respondent No.3 without further notice on

25.05.2026.

¶10In light of setting aside of the impugned orders as noticed above, the instructions made pursuant to

recovery proceedings by the revenue to the Bank for attachment to be rescinded, forthwith.

¶11Petitioner to make out reply to the notice issued under Section 148A(b) and matter to be proceeded thereafter. Petitioner is put on terms to pay cost of Rs.10,000/- to the Karnataka Advocates Clerks Benevolent Trust, High Court Building, Bengaluru.

¶12Accordingly, petition is disposed of. All contentions on merits are kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR