Prathamika Krishi Pathina Sahakara Sangha Niyamitha, v. Commissioner of Income Tax

e -e1e-eeeee e e NC:(2026:KHC:23678 WP(No.(12474(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.(12474(OF(2026((T-IT) BETWEEN:( PRATHAMIKA,KRISHI,PATHINA,SAHAKARA,, SANGHA,NIYAMITHA,,, DIDAGA,,TQ.,CHANNARAYAPATNA,,, DIST.,HASSAN,-,573,116,, (A,SOCIETY,REGISTERED,UNDER,KCS,ACT,,1959), REP.,BY,ITS,CEO,, NINGAMMA,K.,M., W/O,VENKATARAMEGOUDA,,, AGE,,49,,YEARS,, R/O,CHANNARAYAPATTANA,,, DISTRICT,HASSAN,,-,573116., …PETITIONER, Digitally signedtiby PRAKASH0N (BY,SRI.,GIRISH,V,BHAT.,,ADVOCATE),Location: HIGH0COURT OF KARNATAKA AND:

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:23678 WP(No.(12474(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,FOR,R1,TO,R3), , 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, DATED, RD30.03.2026,,PASSED,BY,THE,3 ,RESPONDENT, BEARING,NO., ITBA/COM/F/17/2025-26/1088120997(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 challenged the validity of the assessment order. It is noticed that the petitioner has filed a return in response to the notice issued under Section 148 of the Income Tax Act, 1961 (for short, 'the Act') and thereafter has not participated in the proceedings. The authority after taking note of the material in its hands and having noticed that the assessee has failed to file details and documents as sought for nor had responded to the

notices, has proceeded on the basis of material available and completed adjudication. The authority has proposed variations after noticing that there were credit entries including cash deposits. Having noticed that there was no response by the petitioner, the authority has treated the credit entries amounting to Rs.6,95,19,906/- as unexplained money in terms of Section 69A of the Act.

¶3It is noticed that the petitioner is a Credit Co-operative Society. Counsel for the petitioner asserts that petitioner is entitled for exemption under Section 80P and would demonstrate such exemption before the authority.

¶4Having noticed the findings recorded in the adjudication order and the assertion of the petitioner that they would demonstrate and explain the deposits as being deposits of the farmers and also produce evidence to demonstrate that the petitioner is entitled for exemption under Section 80P(2), it would be appropriate to set aside

the assessment order and remit the matter to the stage of reply to Section 148A(b) notice by putting the petitioner on terms.

¶5Learned counsel for the petitioner submits that though appeal is filed against the assessment order, the said appeal is filed beyond limitation and as the appeal would be dismissed on delay, the Court may enter into the correctness of the order of assessment and further proceedings pursuant to the Section 148 notice.

¶6Taking note of such submission, the Court could enter into the merits of the assessment order itself, noticing the submission that appeal is filed belatedly. The petitioner also undertakes to withdraw the appeal. The said submission is taken on record.

¶7Though learned counsel for the revenue would submit that the petitioner not having participated in the proceedings has rightly suffered an the order and requires no interference, however, taking note of the nature of the

activity of the petitioner and also that the petitioner would demonstrate exemption as claimed, it would be appropriate to set aside the proceedings and remit the matter back.

¶8Accordingly, 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.

¶9In 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.

¶10Petitioner to make out reply to the notice issued under Section 148A(b) and matter to be proceeded thereafter. Petitioner to pay cost of Rs.10,000/- to the

Karnataka Advocates Clerks Benevolent Trust, High Court Building, Bengaluru.

¶11Accordingly, petition is disposed of. All contentions on merits are kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR