Smt. Babu Reddy Shashikala V. The Income Tax Officer Ward-2(2)(2) and National Faceless Assessment Centre

WP/4268/2026

AI Insights

In this case, Smt. Babu Reddy Shashikala, the petitioner, challenged the validity of an assessment order dated 26.12.2025, which was passed by the National Faceless Assessment Centre. The dispute centered on the exemption under Section 54B of the Income Tax Act, 1961, which allows for exemption on the transfer of agricultural land if it has been used for agricultural purposes for two years prior to the transfer. The petitioner argued that the land was used for cultivating paddy, as evidenced by the RTCs of the relevant years, which the assessing authority allegedly failed to consider. The court found merit in the petitioner's argument and remanded the case for a detailed examination of the agricultural use of the land.

• Counselvise Citation: [] 140 COUNSELVISE.COM (IT) 836780 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-02-2026
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E SANMATHI
• Assessee Lawyers: RAVISHANKAR
• Keywords: Agricultural Use; Assessment Order; Exemption; Income Tax; Writ petition
• Section: 143(3); 54B; 144B

Judgement Text

" - 1 - HC-KAR NC: 2026:KHC:8058 WP No. 4268 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 4268 OF 2026 (T-IT) BETWEEN: SMT BABU REDDY SHASHIKALA AGED 51 YEARS, W/O B P BABU REDDY, NO.84, PRESTIGE SUMMER FIELDS, GEAR SCHOOL ROAD, BHOGANAHALLI, BELLANDUR, BANGALORE- 560103 PAN: FIYPS0809C …PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD-2(2)(2), BMTC BUILDING, KORAMANGALA BANGALORE-560095 2. NATIONAL FACELESS ASSESSMENT CENTRE, ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003. …RESPONDENTS Printed from counselvise.com Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2026:KHC:8058 WP No. 4268 of 2026 (BY SRI. E.SANMATHI, ADVOCATE) THIS WRIT PETITITON IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED U/S 143(3) R.W.S 144B OF THE ACT, DATED 26/12/2025 VIDE DIN ITBA/AST/S/143(3)/2025- 26/1084130031(1) PASSED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2024-25 HEREIN MARKED AS ANNEXURE-A., 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 ORAL ORDER Sri E.I. Sanmathi, learned counsel is directed to accept notice for the respondent. 2. The petitioner has called in question the validity of the assessment order dated 26.12.2025. It is the case of the petitioner that, he is entitled to the benefit of exemption under Section 54B of the Income Tax Act, 1961 (hereinafter referred to as \"the Act\") subject to land being used for agricultural Printed from counselvise.com - 3 - HC-KAR NC: 2026:KHC:8058 WP No. 4268 of 2026 purpose two years preceding the date on which the transfer took place. 3. Learned counsel for the petitioner submitted that the Authority has not recorded a proper finding and has not noticed the RTCs of the relevant year which would indicate that the land was being used for cultivation of paddy. It is submitted that for 54B, cultivation could be either that of the individual or of his parents, or a Hindu undivided family(HUF) and place reliance on the partition deed. 4. Taking note of the contentions raised, it would be appropriate, that the matter be remitted for re-consideration by the Assessing Officer and the authority may have a re-look into exemption claimed and may resort to an enquiry if required, in order to ascertain the land having been put for agricultural use 2 years preceding the date of transaction. 5. Petitioner is at liberty to produce other documents as well to enable the Assessing Officer to record a finding regarding the exemption under 54B of the Act. Printed from counselvise.com - 4 - HC-KAR NC: 2026:KHC:8058 WP No. 4268 of 2026 6. A fresh opportunity of hearing may be provided as well apart from considering whether any enquiry is required to be held as regards to use of property for agricultural purposes. 7. Accordingly, the petition is disposed of. All contentions are kept open inclusive of legal interpretation of 54B of the Act is also kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE HR List No.: 2 Sl No.: 30 Printed from counselvise.com "