Mantri Espana Residential Apartment Owners Association V. Assistant Director of Income Tax, Centralized Processing Center, Electronic City, Hosur Road, Bangalore and Income Tax Officer, Ward-4(2)(3), BMTC Building, 80 Feet Road, 6th Block, Koramangala, Bengaluru and Principal Commissioner of Income Tax, Bangalore-2, BMTC Building, 80 Feet Road, 6th Block, Koramangala, Bengaluru

WP/621/2026

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The case involves the Mantri Espana Residential Apartment Owners Association, which challenged an intimation under Section 143(1) of the Income Tax Act, 1961, issued by the Assistant Director of Income Tax. The association argued that the maintenance charges collected from its members were exempt from tax under the principles of mutuality and should have been declared as exempt income in their tax returns. The respondents contended that the association failed to make appropriate entries in their tax returns, leading to the current situation. The court found that the assertion of exempt income was prima facie not controverted by the respondents and decided to remit the matter back to the First Appellate Authority due to the delay in filing the appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 832706 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-01-2026
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Karnataka Apartment Ownership Act, 1972
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: ARAVIND CHAVAN; E I SANMATHI
• Assessee Lawyers: SUDHEENDRA R
• Keywords: Appellate remedy; Exempt income; Income Tax; Intimation; Maintenance charges; Mutuality
• Section: 143(1)

Judgement Text

" - 1 - HC-KAR NC: 2026:KHC:2942 WP No. 621 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 621 OF 2026 (T-IT) BETWEEN: MANTRI ESPANA RESIDENTIAL APARTMENT OWNERS ASSOCIATION, GROUND FLOOR, K BLOCK, KARIYAMMANA AGRAHARA, OUTER RING ROAD, DEVARABEESANAHALLI, BENGALURU - 560 103, PAN AADAM8744M, AN APARTMENT OWNERS ASSOCIATION REGISTERED UNDER THE KARNATAKA APARTMENT OWNERSHIP ACT, 1972, VIDE DEED OF DECLARATION DATED 24.3.2010, REPRESENTED BY ITS TREASURER MR. ANKUR AGRAWAL. …PETITIONER (BY SRI. SUDHEENDRA B. R., ADVOCATE) AND: 1. ASSISTANT DIRECTOR OF INCOME TAX, CENTRALIZED PROCESSING CENTER, ELECTRONIC CITY, HOSUR ROAD, BANGALORE - 560 500. 2. INCOME TAX OFFICER, WARD-4(2)(3), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, Printed from counselvise.com Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:2942 WP No. 621 of 2026 NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. 3. PRINCIPAL COMMISSIONER OF INCOME TAX, BANGALORE - 2, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560 095. …RESPONDENTS (BY SRI. ARAVIND V. CHAVAN, ADV. FOR R1; SRI. E.I. SANMATHI, ADV. FOR R2 AND R3) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE INTIMATION PASSED UNDER SECTION 143 (1) OF THE INCOME TAX ACT, 1961 DATED 09.02.2020 BEARING DIN/CPC/1891/A5/1901895561 ISSUED BY THE R1 FOR THE AY 2018-19 (ANNEXURE-E) 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 Printed from counselvise.com - 3 - HC-KAR NC: 2026:KHC:2942 WP No. 621 of 2026 ORAL ORDER Learned counsel Sri. Aravind V. Chavan accepts notice for respondent No.1. Learned counsel Sri. E.I. Sanmathi accepts notice for respondents No.2 and 3. 2. The petitioner has called in question the validity of the intimation under Section 143(1) of the Income Tax Act, 1961 (for short 'IT Act') issued by respondent No.1. It is the case of the petitioner that the petitioner being an Apartment Owners Association receiving maintenance charges and other charges from members who are the apartment owners. It is further submitted that the amount collected towards maintenance is not chargeable under principles of mutuality. It is submitted that the amount received being exempt, by oversight no declaration was made under the appropriate column showing the amount as exempt income. It is submitted that subsequently the matter has been taken up by the revenue and it is culminated in the intimation under Section 143(1) of the IT Act. Printed from counselvise.com - 4 - HC-KAR NC: 2026:KHC:2942 WP No. 621 of 2026 3. It is submitted that due to certain bona-fide reasons, the petitioner came to know of the demands that were subsequently raised pursuant to the intimation belatedly. It is further submitted that taking note of the amount is exempt income, this Court may set aside the impugned intimations and consequential demands. 4. Learned counsel appearing for the respondents would submit that it is the lapse on part of the petitioner who has not made appropriate entries in the relevant columns in the returns filed, which has resulted in the present situation and it is further submitted as the orders having been passed in the year 2020, the petitioner may be relegated to avail of the Appellate remedy. 5. Insofar as the assertion that the amount collected towards maintenance is exempt income, prima- facie respondents are not unable to controvert such assertion. However, taking note of the delay, it would be appropriate to remit the matter back to First Appellate Printed from counselvise.com - 5 - HC-KAR NC: 2026:KHC:2942 WP No. 621 of 2026 Authority. In light of the explanation made from paragraph No.20 onwards as regards the aspect of delay, it would be appropriate to pass appropriate orders as below: i) The petitioner is relegated to the First Appellate Authority as against the orders at Annexures-E and F. ii) Insofar as the aspect of delay, taking note of the reasons assigned, it would be appropriate to order that if appeal is within 30 days from the date of receipt of certified copy of the order, the appeal would be taken up without raising any objection as regards delay. Such order is passed taking note that the statutory authorities have certain constraints in condoning delay while accepting the bonafideness of the explanation of delay as made herein. 6. In the event, the authorities are to take any coercive steps and the petitioner seeks for stay of the orders, the authority while considering the application for stay and deposit to be made is to take note of the assertion of the petitioner that the income is exempt in an Printed from counselvise.com - 6 - HC-KAR NC: 2026:KHC:2942 WP No. 621 of 2026 appropriate manner. All contentions on merits are kept open. 7. Accordingly, petition is disposed of, reserving liberty as observed above. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR Printed from counselvise.com "