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M T Krishne Gowda v. Income Tax Officer

Karnataka HC7 Nov 2025WP/29095/2025

Case brief

AI extract

What is this about?

Section 271DA penalty order set aside for violation of natural justice; non-consideration of reply dated 16.04.2025 to Show Cause Notice dated 04.04.2025; certiorari under Articles 226 and 227; assessment under Section 143(3) Income Tax Act 1961 dated 14.03.2021; remand for fresh consideration; Karnataka High Court 2025; M.T. Krishne Gowda / Laxmi Stone Crushing Industries, Hassan.

What did the court decide?

Petition allowed; impugned penalty order dated 29.07.2025 (Annexure-F) set aside; matter remitted to the 3rd respondent for reconsideration afresh from the stage of considering the reply dated 16.04.2025; liberty reserved to the petitioner to submit its response/reply along with documents, which the 3rd respondent shall consider and proceed further in accordance with law. ¶50

M T Krishne Gowda Vs Income Tax Officer — Income Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the penalty order dated 29.07.2025 passed by the 3rd respondent under Section 271DA without considering the petitioner's reply dated 16.04.2025 to the Show Cause Notice dated 04.04.2025 violates principles of natural justice and deserves to be set aside.

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Court's answer

Since the 3rd respondent did not consider the petitioner's reply dated 16.04.2025 and proceeded to pass the impugned penalty order, the impugned notices and proceedings culminating in the penalty order are violative of principles of natural justice, and consequently the impugned order deserves to be set aside by adopting a justice-oriented approach.

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Ratio / Principle

The matter is remitted back to the 3rd respondent for reconsideration afresh in accordance with law from the stage of considering the petitioner's reply dated 16.04.2025 to the Show Cause Notice dated 04.04.2025 (Annexure-D).

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Detailed headnote1 paragraphs

High Court of Karnataka (S.R. Krishna Kumar, J.), Writ Petition No. 29095 of 2025 (T-IT), decided 07-11-2025: Certiorari allowed against penalty order dated 29.07.2025 under Section 271DA of the Income Tax Act, 1961 (DIN No. ITBA/PNL/F/271DA/202526/1079048373(1), Annexure-F) passed by the Assessing Officer pursuant to assessment completed under Section 143(3) by order dated 14.03.2021. Held: the Assessing Officer passed the penalty order without considering the assessee's reply dated 16.04.2025 to the Show Cause Notice dated 04.04.2025 (Annexure-D), violating principles of natural justice; the impugned order was set aside adopting a justice-oriented approach and the matter remitted to the Assessing Officer for reconsideration afresh from the stage of considering that reply, with liberty to the assessee to file further response/reply with documents.

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NC: 2025:KHC:45471 WP No. 29095 of 2025

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7^TH DAY OF NOVEMBER, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.29095 OF 2025 (T-IT)

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BETWEEN:

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M.T. KRISHNE GOWDA AGED ABOUT 61 YEARS S/O. MR. THIMME GOWDA, LAXMI STONE CRUSHING INDUSTRIES, MUDUGANUR, ARAKALGUD, HASSAN TALUK-573 102.

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…PETITIONER

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(BY SRI. MAHESH.R.UPPIN, ADVOCATE)

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AND:

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INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE,

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DELHI -110 002.

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JOINT/ADDL. CIT, RANGE - 1, OFFICE OF THE JOINT COMMISSIONER

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OF INCOME TAX. REAC,

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MYSURU – 570 008.

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

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ASSESSING OFFICER, ASSESSMENT UNIT

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INCOME TAX DEPARTMENT,

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DELHI – 110 002.

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INCOME TAX OFFICER, WARD-2, AAYAKAR BHAVAN,

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2^ND STAGE, BELUR ROAD,

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HASSAN -573 201.

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…RESPONDENTS

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(BY SRI. M. THIRUMALESH, ADVOCATE)

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THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO BY ISSUE A WRIT IN THE NATURE OF CERTIORARI QUASHING THE PENALTY ORDER PASSED 3^RD RESPONDENT DT- 29-07-2025 BEARING DIN NO. ITBA/PNL/F/271DA/202526/1079048373(1) MARKED AS ANNEXURE -F AND THE DEMAND NOTICE

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NC: 2025:KHC:45471 WP No. 29095 of 2025

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HC-KAR

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DT- 29-07-2015 VIDE ANNEXURE-G BEARING NO. DIN AND NOTICE NO. ITBA/PNL/S/156/2025-26/1079047324(1) AND ETC.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

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ORAL ORDER

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In this petition, the petitioner seeks the following reliefs:

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“i) Issue a writ in the nature of certiorari quashing the penalty order passed by 3^rd Respondent dt: 29.07.2025 bearing DIN No. ITBA/PNL/F/271DA/202526/1079048373(1) marked as “ANNEXURE-“F” and the Demand Notice dt: 29.07.2015 marked as Annexure-G bearing No.DIN & NOTICE No.ITBA/PNL/S/156/202526/1079047324(1) ; and

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ii) Grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice.”

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Heard learned counsel for the parties and perused the material on record.

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In addition to reiterating various contentions urged in the petition and referring to the material on record, the learned counsel for the petitioner invited my attention to the impugned order in order to point out that pursuant to the order dated

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3 - NC: 2025:KHC:45471 WP No. 29095 of 2025

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HC-KAR

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14.03.2021 passed by the 1^st respondent under Section 143(3) of the Income Tax Act, 1961 (for short, ‘the I.T.Act’), the 3^rd respondent issued a Show Cause Notice dated 04.04.2025 under Section 271DA of the I.T. Act. Subsequently, the petitioner filed its reply to the said notice on 16.04.2025. Further, the 3^rd respondent passed a Penalty order dated 29.07.2025 under Section 271DA of the I.T. Act. The learned counsel for the petitioner pointed out to the impugned order dated 29.07.2025 in order to show that the 3^rd respondent did not consider the reply dated 16.04.2025 filed by the petitioner and proceeded to pass the impugned order thereby violating principles of natural justice and as such, the petitioner is before this Court by way of present petition.

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Per contra, learned counsel for the respondentsrevenue submits that there is no merit in the petition and that the same is liable to be dismissed.

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A perusal of the impugned order will indicate that the petitioner filed its reply dated 16.04.2025 to the notice issued by the petitioner dated 04.04.2025. It is also borne out from the impugned order dated 29.07.2025 that the 3^rd respondent has not

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NC: 2025:KHC:45471 WP No. 29095 of 2025

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HC-KAR

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considered the reply dated 16.04.2025 filed by the petitioner and has proceeded to pass the impugned order. Under these circumstances, I am of the considered opinion that the impugned notices, proceedings culminating in the impugned penalty order is violative of principles of natural justice and consequently, the impugned order deserves to be set aside by adopting justice oriented approach and by directing the 3^rd respondent to consider the reply dated 16.04.2025 filed by the petitioner and thereafter proceed further in accordance with law.

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In the result, I pass the following:

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ORDER

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(i) The petition is hereby allowed .

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(ii) The impugned penalty order at Annexure- F dated 29.07.2025 passed by the 3^rd respondent is hereby set aside.

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(iii) The matter is remitted back to the 3^rd respondent for reconsideration afresh in accordance with law from the stage of considering the reply dated 16.04.2025 filed by the petitioner to the Show Cause Notice at Annexure – D dated 04.04.2025.

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NC: 2025:KHC:45471 WP No. 29095 of 2025

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HC-KAR

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(iv) Liberty is reserved in favour of the petitioner to submit

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its response / reply along with the documents to the 3^rd respondent, who shall consider the same and proceed further in accordance with law.

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Sd/(S.R.KRISHNA KUMAR) JUDGE

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