Pashupati Davella V. National Faceless Assessment Centre, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes) and Asst. Commissioner of Income Tax, Circle 5 (3) (1) and Asst. Commissioner of Income Tax, Circle 3 (3) (1) and Income Tax Officer, Ward 1 (2) (1)

WP/25955/2022

AI Insights

The case involves Pashupati Davella, the petitioner, challenging notices issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2016-17. The notices were issued following a response to an earlier notice under Section 148A(b), which sought clarification on a dividend receipt of Rs. 55,86,888. The Income Tax Department rejected the petitioner's explanation, leading to the issuance of the notices. The petitioner argued that the department did not adequately consider the provided explanations and that the re-opening of the assessment was beyond the permissible limit.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828202 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-01-2026
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: D V PATHY
• Keywords: Assessment Year 2016-17; Income Tax; Notice Quash; Dividend Receipt; Limitation in Re-opening
• Section: 148; 148A(b); 148A(d); 226; 227

Judgement Text

" - 1 - HC-KAR NC: 2026:KHC:192 WP No. 25955 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 25955 OF 2022 (T-IT) BETWEEN: PASHUPATI DAVELLA, AGED ABOUT 56 YEARS, S/O LATE DAVELLA RAMAKRISHNA, 412, ARISTOCARAT APARTMENTS 1, MAIN KASTURI NAGAR, EAST OF NGEF, BENGALURU-560043. …PETITIONER (BY SRI. D.V. PATHY, SENIOR ADVOCATE FOR SRI. A. S. VISHWAJITH, ADVOCATE) AND: 1. NATIONAL FACELESS ASSESSMENT CENTRE, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE (CENTRAL BOARD OF DIRECT TAXES), NORTH BLOCK, NEW DELHI-110 001, THROUGH ITS INCOME TAX OFFICER. 2. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 5 (3) (1), NO.59, HMT BHAVAN, 4TH FLOOR, BALLARI ROAD, GANGANAGAR, BENGALURU-560 032. Printed from counselvise.com Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:192 WP No. 25955 of 2022 3. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 3 (3) (1), NO.59, HMT BHAVAN, 4TH FLOOR, BALLARI ROAD, GANGANAGAR, BENGALURU-560 032. 4. INCOME TAX OFFICER, WARD 1 (2) (1), BANGALORE ROOM NO.101, 1ST FLOOR, BMTC COMMERCIAL COMPLEX, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE-560 095. …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICES DATED 30.06.2021 AND 29.06.2022 (AS CONTAINED IN ANNEXURE-F AND ANNEXURE-N RESPECTIVELY) ISSUED BY THE R2 AND R4 UNDER SECTION 148 OF THE ACT DIRECTING THE PETITIONER TO FURNISH THE RETURN WITHIN 30 DAYS FROM THE ISSUE OF NOTICE FOR THE ASSESSMENT YEAR 2016-17 AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B-GROUP, 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:192 WP No. 25955 of 2022 ORAL ORDER The present petition has been filed seeking to set aside the notices at Annexures-F and N issued under Section 148 of the Income Tax Act, 1961 (for short 'IT Act') and certain other reliefs are also sought for. 2. It is to be noticed that in terms of the facts as made out, Income Tax Return for the assessment year 2016-17 was filed and assessment order was also passed. It is made out that subsequently notice was issued by the Revenue under Section 148A(b) of the IT Act dated 17.05.2022. 3. In response to the same, admittedly, the assessee has made out his reply, copy of which is produced at Annexure-M dated 31.05.2022. Subsequently, it appears that the revenue has passed an order under Section 148A(d) of the IT Act on 29.06.2022, rejecting the reply as not being acceptable on the ground that the assessee did not substantiate with evidence the receipt of Printed from counselvise.com - 4 - HC-KAR NC: 2026:KHC:192 WP No. 25955 of 2022 Rs.55,86,888/- which the assessee claims to be the dividend received and the assessee did not substantiate with evidence from which company the said dividend was received. Accordingly, while observing that the assessee has not made out any proper explanation, the authority has proceeded for issuance of notice under Section 148 of the IT Act for the relevant period. 4. It is contended on behalf of the petitioner that the reply at Annexure-M specifically deals with the information and clarification of which was sought for, as contained in the notice issued under Section 148A(b) of the IT Act. 5. Perused the notice issued under Section 148A(b) at Annexure-L. The information contained specifically refers to amount of Rs.55,86,888/- received by the assessee. The reply at Annexure-M specifically deals with such aspect at paragraphs No.13 and 14. If this were to be so, prima-facie the observation made in the order Printed from counselvise.com - 5 - HC-KAR NC: 2026:KHC:192 WP No. 25955 of 2022 passed under Section 148A(d) as noticed above, regarding non-acceptance of explanation, appears to be one without application of mind. Even otherwise, it could be construed that the explanation made has not been adverted to, while arriving at a conclusion and passing the order under Section 148A(d) of the IT Act. The reply made in detail ought to have been adverted on its merits. 6. The petitioner has also adverted to the aspect of limitation in re-opening the proceedings which contention has been raised at paragraph No.17. At paragraph No.19 of the reply, petitioner has referred to absence of tangible material to justify the allegations made in the notice. 7. In light of the same, it would be appropriate to set aside the order under Section 148A(d) and revert the matter to the stage of reply having been made to the notice under Section 148A(b). The authority may consider the reply as per law and procedure applicable and Printed from counselvise.com - 6 - HC-KAR NC: 2026:KHC:192 WP No. 25955 of 2022 proceed. All contentions are kept open. Accordingly, petition is allowed and the order at Annexure-N is set aside and the consequential notice at Annexure-F is also set aside. 8. Petitioner to appear before respondent No.4 without further notice on 19.01.2026. Petitioner is at liberty to make out additional reply to the notice issued under Section 148A(b) of the IT Act. Proceedings are to be restored to the stage as indicated in paragraph No.7. Accordingly, petition is allowed in part. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR Printed from counselvise.com "