Dr P Dayananda Pai v. Deputy Commissioner of Income Tax

Karnataka HC29 Oct 2025ITA/613/2022

Case brief

AI extract

What is this about?

Karnataka HC ITA 613/2022 (decided 29-10-2025), Dr P Dayananda Pai v DCIT Central Circle-2(2) & PCIT Central Circle, AY 2005-06, S.260-A Income Tax Act 1961: reassessment reopened after four-year lapse without producible sanction of Jurisdictional Commissioner held unsustainable; Tribunal order ITA.No.150/Bang/2020 (26.07.2022), DCIT order (30.03.2013) and CIT(A) order ITA.No.94/CIT(A)-11/BANG/2013-14 (09.12.2019) set aside; Revenue denied liberty to seek review despite opportunity on 18.03.2025.

What did the court decide?

Appeal allowed on the question framed; the impugned Tribunal order dated 26.07.2022 in ITA No.150/Bang/2020 and the orders dated 30.03.2013 and 09.12.2019 of the original and appellate Authorities are set aside. ¶¶47

Dr P Dayananda Pai Vs Deputy Commissioner of Income Tax — Income Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

¶¶47

Issue for consideration

Whether the reassessment for Assessment Year 2005-06, undertaken after a lapse of four years, was supported by prior sanction of the Jurisdictional Commissioner of Income Tax - the question on which the outcome of the appeal turns. +1 more

¶¶35

Court's answer

If the reassessment is after a lapse of four years and there is no prior sanction for such reassessment, the reassessment cannot be sustained; consequently the appellant must succeed not only against the Tribunal's order but also against the order-in-original and the order-in-appeal.

¶¶41

Ratio / Principle

Liberty to the Revenue to seek review is refused: the Revenue's failure to place a copy of the prior sanction on record during the previous and present proceedings, despite a specific opportunity granted on 18.03.2025 and the appeal being listed on multiple occasions thereafter, does not justify granting such liberty.

¶¶42

Detailed headnote1 paragraphs

Income Tax Appeal under S.260-A of the Income Tax Act, 1961 (ITA No. 613 of 2022, High Court of Karnataka, decided 29.10.2025; Bench: B M Shyam Prasad and T.M.Nadaf JJ.; judgment per B M Shyam Prasad J.) - Reassessment for Assessment Year 2005-06 undertaken inarguably after a lapse of four years - On direction contained in order dated 18.03.2025, Revenue asked to secure records and state whether the Jurisdictional Commissioner of Income Tax had accorded sanction for reopening - Revenue unable to produce any sanction despite specific opportunity on 18.03.2025 and listing on multiple occasions - Held: where a reassessment follows a lapse of four years and there is no prior sanction of the Jurisdictional Commissioner, the reassessment cannot be sustained; appellant succeeds against the Tribunal's order (ITA No.150/Bang/2020 dated 26.07.2022) as also the order-in-original (DCIT dated 30.03.2013) and the order-in-appeal (Appellate Commissioner dated 09.12.2019) - Appeal allowed; all three orders set aside - Liberty to the Revenue to seek review refused in view of its persistent failure to place the sanction on record.

¶1

¶2

NC: 2025:KHC:43035-DB ITA No. 613 of 2022

¶3

HC-KAR

¶4

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29^TH DAY OF OCTOBER, 2025

¶5

PRESENT

¶6

THE HON'BLE MR. JUSTICE B M SHYAM PRASAD

¶7

AND

¶8

THE HON'BLE MR. JUSTICE T.M.NADAF INCOME TAX APPEAL NO. 613 OF 2022

¶9

BETWEEN:

¶10

DR P DAYANANDA PAI S/O LATE P NARASIMHA PAI AGED 77 YEARS, R/AT NO.10/1 LAKSHMINARAYANA COMPLEX PALACE ROAD BANGALORE-560052.

¶11

Digitally Signed by REKHA R Location : High Court of Karnataka

¶12

…APPELLANT

¶13

(BY SRI. M.V. SESHACHALA., SENIOR ADVOCATE FOR SRI. NAGHARISH G S.,ADVOCATE)

¶14

AND:

¶15

DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -2(2) C R BUILDING, QUEENS ROAD BENGALURU-560001.

¶16

¶17

NC: 2025:KHC:43035-DB ITA No. 613 of 2022

¶18

HC-KAR

¶19

PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL CIRCLE C R BUILDING QUEENS ROAD BENGALURU-560001.

¶20

…RESPONDENTS

¶21

(BY SRI.E.I. SANMATHI., ADVOCATE FOR R1 & R2)

¶22

THIS INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 26/07/2022 IN ITA.NO.150/BANG/2020 FOR ASSESSMENT YEAR 2005-06 PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; 2. ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, BANGALORE IN ITA.NO.150/BANG/2020 DATED 26.07.2022 ANNEXURE-C FOR ASSESSMENT YEAR 2005-06, CONSEQUENTLY SET ASIDE THE ORDER OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), BENGALURU DATED 30.03.2013 ANNEXURE-A AND THE ORDER OF APPELLATE COMMISSIONER DATED 09.12.2019 IN ITA.NO.94/CIT(A)-11/BANG/2013-14 ANNEXURE-B.

¶23

¶24

NC: 2025:KHC:43035-DB ITA No. 613 of 2022

¶25

HC-KAR

¶26

THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

¶27

CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF

¶28

ORAL JUDGMENT

¶29

(PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)

¶30

This appeal is against the order dated 26.07.2022 in ITA No.150/Bang/2020 for the assessment year 2005-2006. The appellant has also called in question the orders dated 30.03.2013 and 09.12.2019 by the original and appellate Authorities. The appellant has proposed multiple substantial questions of law.

¶31

Sri M V Seshachala, the learned Senior Counsel for the appellant, while inviting this Court's attention to the order dated 18.03.2025 in the present appeal, submits that the Revenue is called upon to secure the records and submit on whether

¶32

¶33

NC: 2025:KHC:43035-DB ITA No. 613 of 2022

¶34

HC-KAR

¶35

the Jurisdictional Commissioner of Income Tax has accorded sanction for the reopening of the assessment. This Court must observe that this Court has also recorded in this order dated 18.03.2025 that the impugned reassessment is undertaken inarguably after a lapse of four years. The learned Senior Counsel canvasses that the outcome in this appeal must turn on whether indeed there was any sanction by the Jurisdictional Commissioner of Income Tax.

¶36

Sri E I Sanmathi is heard in the light of the afore submissions formally admitting such question for due consideration. The learned counsel submits that he has secured the records, but he cannot lay his hand on the sanction accorded by the Jurisdictional Commissioner of Income Tax, and he also submits that this Court may reserve liberty to the Revenue to reopen to seek review if they can lay their hands on such sanction.

¶37

¶38

NC: 2025:KHC:43035-DB ITA No. 613 of 2022

¶39

HC-KAR

¶40

This Court must opine that if the

¶41

reassessment is after a lapse of four years and if there is no prior sanction for such reassessment, the indisputable position must be that the reassessment cannot be sustained. As such, the appellant must succeed not only as against the Tribunal's order but all other orders viz ., the order-in-original and the order-in-appeal.

¶42

The next question, whether there must be liberty to seek review, is examined in the context of the Revenue's failure to place on record a copy of the prior sanction during the previous proceedings and the present proceedings with a specific opportunity being granted in this regard on 18.03.2025 and the appeal being listed on multiple occasions thereafter. These circumstances do not render the granting of liberty as now sought for. Hence, the following:

¶43

¶44

NC: 2025:KHC:43035-DB ITA No. 613 of 2022

¶45

HC-KAR

¶46

ORDER

¶47

The appeal is allowed on the question framed setting aside the impugned order dated 26.07.2022 in ITA No.150/Bang/2020 and the orders dated 30.03.2013 and 09.12.2019 by the original and appellate Authorities.

¶48

Sd/(B M SHYAM PRASAD) JUDGE

¶49

Sd/(T.M.NADAF) JUDGE

¶50

AN/-

Dr P Dayananda Pai v. Deputy Commissioner of Income Tax

Case brief

What is this about?

What did the court decide?

Dr P Dayananda Pai v. Deputy Commissioner of Income Tax

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Dr a Janardhan Vs Union of India

Designated Committee Sabka Vikas Legacy Dispute Vs M/S L M Wind Power Blades India Pvt. Ltd.

The Assessment Unit Vs Sri Bangalore Cheluva Narayan

Pr. Commissioner of Income TAX-3 Vs Infosys Ltd.

Durgappa Lakkanna Vs Assistant Commissioner

Principal Commissioner Vs M/S Goldman Sachs Service Pvt. Ltd.