Disposed¶47

M/S Sai Srushti Infrastructure v. Assessment Unit

Karnataka HC4 Feb 2026WP/2980/2026

Case brief

AI extract

What is this about?

Income tax; faceless assessment; best judgment assessment under Section 147 r.w.s. 144 r.w.s. 144B Income Tax Act 1961; ex parte assessment order; show cause notice sent to departed employee's email; natural justice; orders set aside and remitted for fresh reply; Annexures A1/C1/B1/D1; AY 2018-19 and AY 2019-20; cost Rs. 20,000 to High Court Legal Services Committee; writ under Articles 226 and 227; Karnataka High Court; Justice S Sunil Dutt Yadav; partnership firm assessee.

What did the court decide?

Assessment orders at Annexures-A1 (AY 2019-20) and C1 (AY 2018-19) and Annexures A2-A9 and C2-C6 set aside; matters remitted to the stage of reply to the show cause notices at Annexures-B1 and D1 with all contentions on merits kept open, subject to the petitioner paying cost of Rs. 20,000 to the High Court Legal Services Committee ¶47

M/S Sai Srushti Infrastructure Vs Assessment Unit — Income Tax | Karnataka HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the ex parte best judgment assessment orders for AY 2019-20 (Annexure-A1) and AY 2018-19 (Annexure-C1), passed without reference to any reply to the show cause notice (allegedly sent to a departed employee's email), should be set aside so as to afford the petitioner an opportunity to reply on merits

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Court's answer

The impugned assessment orders were passed on the principle of best judgment assessment and contain no reference to any reply to the show cause notice

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Ratio / Principle

In view of the consequences and financial prejudice to the petitioner, the lapse in not replying could be condoned and the petitioner afforded an opportunity to take its stand on merits by replying to the show cause notice, with the petitioner put on terms

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Key takeaways

The assessment orders at Annexures-A1 and C1 for AY 2019-20 and AY 2018-19 respectively, and Annexures A2 to A9 and C2 to C6, are set asideratio¶42
The matters are remitted to the stage of reply to the show cause notices at Annexures-B1 and D1 for the respective years, with all contentions on merits kept openratio¶45

Detailed headnote1 paragraphs

Karnataka High Court (S Sunil Dutt Yadav J) disposed of a writ petition under Articles 226 and 227 filed by a partnership firm challenging ex parte assessment orders passed under Section 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 for AY 2019-20 (Annexure-A1) and AY 2018-19 (Annexure-C1). The petitioner contended the show cause notices went to the email ID of an employee who had left its services, leaving it unable to reply. On perusal the Court found the orders were best judgment assessments containing no reference to any reply to the show cause notice; condoning the lapse and noting the financial prejudice, it set aside the assessment orders and connected annexures (A2-A9, C2-C6) and remitted the matters to the stage of reply to the show cause notices (Annexures-B1 and D1), keeping all contentions on merits open, subject to payment of Rs. 20,000 cost to the High Court Legal Services Committee.

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NC: 2026:KHC:6395 WP No. 2980 of 2026

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF FEBRUARY, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

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WRIT PETITION NO. 2980 OF 2026 (T-IT)

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BETWEEN:

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M/S SAI SRUSHTI INFRASTRUCTURE A PARTNERSHIP FIRM (UNDER REGISTERED PARTNERSHIP ACT, 1932) REPRESENTED BY ITS PARTNER SHRI. NAYANI SREENADHA REDDY AGED ABOUT 49 YEARS, SON OF JANARDHANA REDDY NAYANI HAVING OFFICE AT 3287, 3^RD FLOOR, 12^TH MAIN, HAL 2^ND STAGE, INDIRANAGAR BENGALURU-560 038

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Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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(BY SRI. MADHUSUDHAN U A., ADVOCATE)

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AND:

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… PETITIONER

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ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, MINISTRY OF FINANCE, ROOM NO 401, 2^ND FLOOR, E-RAMP, JAWARLAL NEHRU STADIUM, DELHI-110 003

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2 - NC: 2026:KHC:6395 WP No. 2980 of 2026

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HC-KAR

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THE INCOME TAX OFFICER WARD-1(1)(1), BMTC BUILDING, 8OFT ROAD, 6^TH BLOCK KHB VILLAGE, KORAMANGALA BENGALURU - 560 095

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THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1) BMTC BUILDING, 80FT ROAD, 6^TH BLOCK KHB VILLAGE, KORAMANGALA BENGALURU - 560 095

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THE PRINCIPAL COMMISSIONER OF INCOME TAX -1 CENTRAL REVENUE BUILDING QUEENS ROAD, BENGALURU - 560 001

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… RESPONDENTS

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(BY SRI. M. DILIP., ADVOCATE)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO A) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER DATED 27.02.2024 PASSED UNDER SECTION 147 R.W.S 144 R.W.S 144B OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2019-20 BY THE RESPONDENT NO.1 BEARING DIN NO. ITBA/AST/S/147/2023-24/1061584527(1) HEREIN MARKED AS ANNEXURE-A1 AND ETC.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

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NC: 2026:KHC:6395 WP No. 2980 of 2026

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HC-KAR

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ORAL ORDER

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Petitioner has called in question the validity of the assessment order at Annexure-A1 with respect to the assessment year 2019-20 and the order at Annexure-C1 for the assessment year 2018-19.

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Petitioner submits that the said orders are exparte orders and the petitioner was not in a position to make out reply to the show cause notice. It is submitted that the notices were sent to the email ID of the employee

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who had since left the services of the company. Accordingly, it is submitted that the petitioner did not have information regarding the same.

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Learned counsel for the respondent - Revenue

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submits that email ID to which notices were sent was the email ID furnished by the petitioner and accordingly, it cannot be contented that the orders were without notice. It is further submitted that the relationship between the

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NC: 2026:KHC:6395 WP No. 2980 of 2026

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HC-KAR

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petitioner and the employee cannot be taken note of as it is an internal matter of the petitioner's company.

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Heard both sides.

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Perused the orders at Annexures-A1 and C1. It

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is noticed that the orders passed are on the principle of best judgment assessment. There is no reference to any reply to the show cause notice. Taking note of the consequences that would visit the petitioner, it would be appropriate to afford an opportunity to the petitioner to take his stand on merits by making out reply to the show cause notice. The lapse of the petitioner could be condoned. Taking note of the financial prejudice that may be caused if the orders are allowed to stand, the petitioner is put on terms.

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Accordingly, the orders at Annexures-A1 and C1

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i.e. assessment orders for the respective assessment years of 2019-20 and 2018-19 are set aside. Annexures - A2 to A9 and C2 to C6 are also set aside. The matter is

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5 - NC: 2026:KHC:6395 WP No. 2980 of 2026

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HC-KAR

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remitted to the stage of reply to the show cause notices at Annexures-B1 and D1 for the respective years. All contentions on merits are kept open. Petitioner to pay cost of Rs.20,000/to the High Court Legal Services

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Committee.

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7. Accordingly, petition is disposed of .

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SD/(S SUNIL DUTT YADAV) JUDGE

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M/S Sai Srushti Infrastructure v. Assessment Unit

Case brief

What is this about?

What did the court decide?

M/S Sai Srushti Infrastructure v. Assessment Unit

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

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