M/S. SHREE SOWPARNIKA DEVELOPERS vs ADDITIONAL COMMISSIONER OF INCOME TAX
- Court
- Karnataka High Court
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HC-KAR
NC: 2026:KHC:56186
WP No. 29605 of 2026
CNR: KAHC010647902026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 7 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 29605 OF 2026 (T-IT)
BETWEEN:
M/S. SHREE SOWPARNIKA DEVELOPERS
A PARTNERSHIP FIRM REGISTERED UNDER
THE INDIAN PARTNERSHIP ACT, 1932,
HAVING ITS OFFICE AT SHREE KAMAKSHI,
BANKESHWAR ROAD, BYNDOOR,
KUNDAPURA TALUK, UDUPI-576214
REPRESENTED BY ITS PARTNER,
SRI K VENKATESH KINI.
…PETITIONER
(BY SRI. S.S. NAGANAND., SENIOR ADVOCATE FOR
Digitally
signed by
VANAMALA
N
Location:
HIGH
COURT OF
KARNATAKA
SRI. NAGESH MORO., ADVOCATE)
AND:
1. ADDITIONAL COMMISSIONER OF
INCOME TAX
RANGE-1, MANGALORE
C.R. BUILDING, N.G. ROAD,
ATTAWARA, MANGALURU-575001.
2. INCOME TAX OFFICER,
WARD 1 AND TPS, UDUPI AAYAKAR BHAVAN,
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UDUPI, MALPE ROAD,
AADI UDUPI, AMBALAPADI (PO),
UDUPI-576103.
…RESPONDENTS
(BY SRI.M. THIRUMALESH., ADVOCATE FOR
SRI. NIRMAL MATHEW., ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO-QUASH
THE ORDER DATED 16.06.2026 BEARING NO.
ITBA/AST/F/148A/2026-27/1089761356(1) PASSED BY
R2 (ANNX-C); QUASH THE PRIOR APPROVAL ORDER
DATED 12.06.2026 BEARING NO.
ITBA/AST/S/128/2026-27/1089668310(1) PASSED BY
THE R1 (ANNX-C1); QUASH THE NOTICE DATED
16.06.2026 BEARING NO. ITBA/AST/S/148-1/2026-
27/1089761881(1) PASSED BY R2 (ANNX-D).
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE
THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner has called in question the
Order/prior approval under Section 148A(3) and
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HC-KAR
NC: 2026:KHC:56186
WP No. 29605 of 2026
CNR: KAHC010647902026
Section 151 of the Income Tax Act, 1961 [for short,
‘the IT Act’ ] and the Notice under Section 148 of the
IT Act for the assessment year 2022-23. The details of
these impugned Order/prior approval and notice are
as follows.
Particulars Section of the
Date Annexure
Income Tax Act,
1961
Order 148A(3) 16.06.2026
C
Prior
148A(3) and 151 12.06.2026
C1
Approval
Notice 148 16.06.2026 D
2. Mr. S. S. Naganand, the learned Senior
counsel for the petitioner, submits that the petitioner
is issued with Show Cause Notice under Section
148A(1) of the IT Act on 27.03.2026 and this Court
must intervene because of the following:
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WP No. 29605 of 2026
CNR: KAHC010647902026
2.1 The petitioner is informed that a business
turnover of Rs.25,89,591/- is not disclosed in the
Returns and that the petitioner, in response, has filed
a detailed reply stating that the sum of
Rs.25,89,591/- is not a business turnover but
includes cash deposits, capital transactions,
unsecured loans and advances received towards sale
of land. The petitioner has also produced bank
account statements stating that if any clarification is
needed the same would be furnished.
2.2 The second respondent, without
considering the same, has passed an Order under
Section 148A of the IT Act and has caused the
impugned notice opining that the petitioner has not
provided the Creditor's Bank statement and that the
matter requires a thorough investigation .
2.3 The second respondent, as required under
Section 148A(3) of the IT Act, is obliged to take into
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account the petitioner's response and pass an order
about the case being fit for reassessment under
Section 147 of the IT Act and for notice under Section
148 of the IT Act and unless the second respondent
considers the response and opines that it is a fit case ,
the notice under Section 148 of the IT Act and further
proceedings would be a roving exercise which cannot
be in law.
2.4 The first respondent’s approval must be
after the second respondent records an opinion on
the case being fit for reassessment under Section 147
of the IT Act with notice under Section 148 thereof.
The notice to the petitioner under Section 148A(1) is
dated 27.03.2026 but the first respondent’s approval
is dated 27.03.2026 [ on the same day and prior to the
petitioner’s response ]. This demonstrates that there is
pre-determination and an enquiry under Section
148A of the IT Act is treated a formality.
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3. Mr. M. Thirumalesh, a learned Senior
Standing Counsel who accepts notice for the
respondents, and who is assisted by Mr. Nirmal
Mathew, a learned Standing counsel, is heard for the
disposal of the petition in the light of these
circumstances. On the petitioner’s case that the first
respondent’s approval is pre-dated, the learned
Senior standing counsel/Standing counsel inviting
this Court’s attention to Annexure-C1 submit that it
is digitally signed on 12.06.2026 and they also
contend that the second respondent has not
permitted a roving exercise in recording fitness.
3.1 The proceedings are begun with notice
under Section 148A(1) of the IT Act based on certain
information on business turnover , and the petitioner
has responded specifically stating, and enclosing
certain documents [ as could be seen from the reply
dated 23.04.2026 Annexure – B ] that the amount is
not a business turnover but includes cash deposits,
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capital transactions, unsecured loans and advances
received towards sale of land.
4. The second respondent has recorded
reasons as follows:
“Assessee’s reply has been considered but
not found to be acceptable. The assessee
has mentioned that 14,00,000/- has been
received as unsecured loan from Dinakar
Kini and paid in the same year. After going
through the bank statement, it is observed
that assessee itself has deposited cash
amounting to Rs. 14,00,000/- and no bank
entry found to be paid back to Dinakar Kini.
Therefore, assesssee’s statement for this
amount not found to be in order. With
regard to difference in bank credits and
turnover of Rs. 25,89,591/-, no proper
reconciliation statement has been provided.
Therefore in want of proper documentary
evidences and valid explanation, the
transaction of Rs. 25,89,591/- and Rs.
14,00,000/- remain unexplained.”
The underlining is by this Court
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5. This Court is of the opinion that the
second respondent to conclude that there must be
proceedings with issuance of notice under Section
148 of the IT Act, should have first examined the
documents produced by the petitioner to ascertain
whether the amounts declared indeed be classified as
business turnover as alleged and then record an
opinion, offering cogent reasons, on the
circumstances that justify the case being fit for
issuance of notice under Section 148 of the IT Act.
This failure is a reason for this Court to interfere with
the impugned order/approval and notice and restore
the proceedings to the second respondent for
reconsideration.
6. Further, this Court must also observe that
the second respondent, while granting approval
under Section 148A(3) and Section 151 of the IT Act,
should have looked into all these and then granted
approval, and, significantly, should have ensured
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that there is no reason for the assertions that there is
pre-determination because of a technical glitch or
otherwise. This Court, where similar circumstances
are canvassed on behalf of the petitioner’s associate
companies, has refused to set at naught the entire
proceedings on this ground. This Court also observes
that with the Order under Section 148A of the IT Act
being quashed, the first respondent’s approval [ as per
Annexure-C1 ] will stand dissolved. Hence, the
following.
ORDER
A. The petition is allowed in-part.
B. The following order/notice are quashed.
Date Annexure
Particulars Section of the
Income Tax
Act, 1961
Order 148A(3) 16.06.2026
C
Notice 148 16.06.2026 D
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WP No. 29605 of 2026
CNR: KAHC010647902026
C. The petitioner, without further notice,
shall appear before the Income Tax
Officer, Ward-1 and TPS, Udupi [ the
second respondent ] on 30.10.2026 and
will be at liberty to file any further
clarification that the second respondent
may seek, but the second respondent
must consider the explanation offered
in the light of this Court's observation
as afore.
Sd/-
(B M SHYAM PRASAD)
JUDGE
NV