Full Judgment Text
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NC: 2026:KHC:5591-DB
ITA No. 5 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ST
DATED THIS THE 31 DAY OF JANUARY, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
INCOME TAX APPEAL NO. 5 OF 2025
BETWEEN:
1. THE COMMISSIONER
OF INCOME TAX EXEMPTION,
TH
6 FLOOR, UNITY BUILDING ANNEX,
P. KALINGA RAO ROAD
KARNATAKA-560027.
2. THE ASSISTANT COMMISSIONER
OF INCOME TAX
TH
ROOM NO.606, 6 FLOOR,
UNITY BUILDING ANNEX,
P KALINGA RAO ROAD,
KARNATAKA- 560027.
…APPELLANTS
(BY SRI. ARAVIND V CHAVAN, SR. STANDING COUNSEL)
AND:
M/S. RAJIV GANDHI UNIVERSITY
OF HEALTH SCIENCES
TH
RGUHS, 4 T BLOCK,
JAYANAGAR, BANGALORE-560041
REP. BY ITS VICE-CHANCELLOR.
…RESPONDENT
(BY SRI. ANNAMALAI, ADV.)
THIS INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 28.06.2024 PASSED IN
ITA NO. 703/BANG/2023, FOR THE ASSESSMENT YEAR 2014-2015
PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS
PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU
Digitally signed by
NANJUNDACHARI
Location: HIGH
COURT OF
KARNATAKA
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NC: 2026:KHC:5591-DB
ITA No. 5 of 2025
HC-KAR
DATED 28.06.2024 PASSED IN ITA NO. 703/BANG/2023, FOR
ASSESSMENT YEAR 2014-2015 ANNEXURE-A AND CONFIRMING THE
ORDER OF THE APPELLANT COMMISSIONER CONFIRM THE ORDER
PASSED BY THE ASSISTANT THE COMMISSIONER OF INCOME TAX,
(EXEMPTIONS) BENGALURU.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
AND
HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)
This appeal is filed by the Revenue under Section 260-A of the
Income-tax Act, 1961 (for short, “the Act”), calling in question
the order dated 28.06.2024 passed by the Income Tax
Appellate Tribunal ‘A’ Bench (for short, “the Tribunal”) in ITA
No.703/Bang/2023 pertaining to the Assessment Year 2014-15.
2. The respondent–assessee filed its return of income for the
Assessment Year 2014-15, and was referred to special audit
under section 142(2A) of the act. The assessment was
completed under Section 143(3) of the Act on 25.07.2017.
Aggrieved by the said assessment order, the respondent–
assessee preferred an appeal before the National Faceless
Appeal Centre (NFAC). The Commissioner of Income-tax
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ITA No. 5 of 2025
HC-KAR
(Appeals) [CIT(A)], by order dated 21.07.2023, partly allowed
the appeal.
2.1 Still aggrieved, the assessee carried the matter in further
appeal before the Tribunal. By the impugned order, the
Tribunal remitted the matter to the CIT(A) for fresh
consideration. One of the issues remitted for reconsideration
pertains to the validity of the notice issued under Section
143(2) of the Act.
3. Sri Aravind V. Chavan, learned Senior Standing Counsel
appearing for the appellant–Revenue, submits that the
assessee filed its return of income on 28.03.2015 and a revised
return on 10.11.2016. It is submitted that the last date for
filing a revised return was 31.03.2016. According to learned
counsel, the revised return having been filed beyond the period
prescribed under Section 139(5) of the Act, the same is invalid
in law.
3.1 It is further submitted that the notice issued under
Section 143(2) of the Act was based on the original return filed
on 28.03.2015. Learned counsel submits that the Tribunal, in
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ITA No. 5 of 2025
HC-KAR
paragraph 6.2 of the impugned order, has observed that the
notice under Section 143(2) of the Act was issued on the basis
of the belated revised return, which, according to him, is
factually incorrect.
3.2 Learned counsel submits that, in view of the aforesaid
erroneous observation, the remand of the matter to the CIT(A)
has been rendered futile. However, learned counsel fairly
submits that subject to clarification of the above observation,
the Revenue has no grievance with regard to the order of
remand passed by the Tribunal.
4. Sri Annamalai, learned counsel appearing for the
respondent–assessee, submits that the validity of the notice
issued under Section 143(2) of the Act—whether it was issued
on the basis of the original return or the revised return—is itself
in dispute. It is submitted that since the said contention was
not examined or adjudicated by the CIT(A), the Tribunal has
rightly remanded the matter for fresh consideration of the said
issue by the CIT(A).
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4.1 Learned counsel further submits that the Tribunal has not
recorded any finding as to whether the notice under Section
143(2) of the Act was issued on the original return or on the
revised return. In that view of the matter, it is submitted that
the contention urged on behalf of the Revenue is unsustainable.
5. Having considered the submissions of the learned counsel
appearing for the parties, we notice that the impugned order is
an order of remand passed by the Tribunal directing
consideration of certain issues by the CIT(A). One of the issues
so remitted pertains to the validity of the notice issued under
Section 143(2) of the Act. In paragraph 6.2 of the impugned
order, the Tribunal has held as follows:
“It is noticed that the fact that the revised return is
subjected to processing during assessment as per
the above letter dated 09.05.2024. Also, we note
that the said revised return is said to be belatedly
filed by the assessee. All these situations has not
been addressed by the Ld.CIT(A) while considering
the additional ground raised at the time of hearing in
the impugned order. WE note that the Ld.CIT(A) has
dismissed the issue by holding that an unsigned
notice issued u/s. 143(2) dated 21.09.2015 by email
will not vitiate the proceedings. In our opinion, this
issue and the arguments raised by both sides before
us needs to be properly verified by the Ld.CIT(A).
Having regards to the fact that the revised return
i.e., belatedly filed by the assessee was processed
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HC-KAR
during the assessment proceedings for which no
notice u/s. 143(2) has been issued. In our
considered opinion, we direct eh Ld.CIT(A) to decide
the legal issue raised by assessee based on the
above admitted facts in accordance with alw. We
therefore restrain from deciding the issue on merits
at this stage and the same is kept open.
Accordingly, the appeal stands remitted to the
Ld.CIT(A) for fresh consideration on ground nos. 2.1-
2.2 raised by assessee before this Tribunal.
In the result, the appeal field by the assessee
stands allowed for statistical purposes.”
6. Having regard to the fact that the revised return, which
was belatedly filed by the assessee, was processed during the
assessment proceedings without issuance of any notice under
Section 143(2) of the Act, the aforesaid observation
undoubtedly conveys that the notice under Section 143(2) of
the Act was issued on the basis of the belatedly filed revised
return. If the said observation is allowed to remain in the order,
the apprehension expressed by the Revenue that the order of
remand would not serve its intended purpose cannot be
rejected outright.
7. In that view of the matter, the aforesaid portion of the
impugned order contained in paragraph 6.2 is hereby deleted.
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HC-KAR
All contentions of both parties with regard to the validity or
otherwise of the issuance of notice under Section 143(2) of the
Act are kept open to be adjudicated by the CIT(A).
Except for the aforesaid observations, the present appeal
is not entertained and accordingly stands disposed of.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(K. V. ARAVIND)
JUDGE
BSV
CT:bms
List No.: 1 Sl No.: 20
NC: 2026:KHC:5591-DB
ITA No. 5 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ST
DATED THIS THE 31 DAY OF JANUARY, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
INCOME TAX APPEAL NO. 5 OF 2025
BETWEEN:
1. THE COMMISSIONER
OF INCOME TAX EXEMPTION,
TH
6 FLOOR, UNITY BUILDING ANNEX,
P. KALINGA RAO ROAD
KARNATAKA-560027.
2. THE ASSISTANT COMMISSIONER
OF INCOME TAX
TH
ROOM NO.606, 6 FLOOR,
UNITY BUILDING ANNEX,
P KALINGA RAO ROAD,
KARNATAKA- 560027.
…APPELLANTS
(BY SRI. ARAVIND V CHAVAN, SR. STANDING COUNSEL)
AND:
M/S. RAJIV GANDHI UNIVERSITY
OF HEALTH SCIENCES
TH
RGUHS, 4 T BLOCK,
JAYANAGAR, BANGALORE-560041
REP. BY ITS VICE-CHANCELLOR.
…RESPONDENT
(BY SRI. ANNAMALAI, ADV.)
THIS INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 28.06.2024 PASSED IN
ITA NO. 703/BANG/2023, FOR THE ASSESSMENT YEAR 2014-2015
PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS
PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU
Digitally signed by
NANJUNDACHARI
Location: HIGH
COURT OF
KARNATAKA
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NC: 2026:KHC:5591-DB
ITA No. 5 of 2025
HC-KAR
DATED 28.06.2024 PASSED IN ITA NO. 703/BANG/2023, FOR
ASSESSMENT YEAR 2014-2015 ANNEXURE-A AND CONFIRMING THE
ORDER OF THE APPELLANT COMMISSIONER CONFIRM THE ORDER
PASSED BY THE ASSISTANT THE COMMISSIONER OF INCOME TAX,
(EXEMPTIONS) BENGALURU.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
AND
HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)
This appeal is filed by the Revenue under Section 260-A of the
Income-tax Act, 1961 (for short, “the Act”), calling in question
the order dated 28.06.2024 passed by the Income Tax
Appellate Tribunal ‘A’ Bench (for short, “the Tribunal”) in ITA
No.703/Bang/2023 pertaining to the Assessment Year 2014-15.
2. The respondent–assessee filed its return of income for the
Assessment Year 2014-15, and was referred to special audit
under section 142(2A) of the act. The assessment was
completed under Section 143(3) of the Act on 25.07.2017.
Aggrieved by the said assessment order, the respondent–
assessee preferred an appeal before the National Faceless
Appeal Centre (NFAC). The Commissioner of Income-tax
- 3 -
NC: 2026:KHC:5591-DB
ITA No. 5 of 2025
HC-KAR
(Appeals) [CIT(A)], by order dated 21.07.2023, partly allowed
the appeal.
2.1 Still aggrieved, the assessee carried the matter in further
appeal before the Tribunal. By the impugned order, the
Tribunal remitted the matter to the CIT(A) for fresh
consideration. One of the issues remitted for reconsideration
pertains to the validity of the notice issued under Section
143(2) of the Act.
3. Sri Aravind V. Chavan, learned Senior Standing Counsel
appearing for the appellant–Revenue, submits that the
assessee filed its return of income on 28.03.2015 and a revised
return on 10.11.2016. It is submitted that the last date for
filing a revised return was 31.03.2016. According to learned
counsel, the revised return having been filed beyond the period
prescribed under Section 139(5) of the Act, the same is invalid
in law.
3.1 It is further submitted that the notice issued under
Section 143(2) of the Act was based on the original return filed
on 28.03.2015. Learned counsel submits that the Tribunal, in
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ITA No. 5 of 2025
HC-KAR
paragraph 6.2 of the impugned order, has observed that the
notice under Section 143(2) of the Act was issued on the basis
of the belated revised return, which, according to him, is
factually incorrect.
3.2 Learned counsel submits that, in view of the aforesaid
erroneous observation, the remand of the matter to the CIT(A)
has been rendered futile. However, learned counsel fairly
submits that subject to clarification of the above observation,
the Revenue has no grievance with regard to the order of
remand passed by the Tribunal.
4. Sri Annamalai, learned counsel appearing for the
respondent–assessee, submits that the validity of the notice
issued under Section 143(2) of the Act—whether it was issued
on the basis of the original return or the revised return—is itself
in dispute. It is submitted that since the said contention was
not examined or adjudicated by the CIT(A), the Tribunal has
rightly remanded the matter for fresh consideration of the said
issue by the CIT(A).
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ITA No. 5 of 2025
HC-KAR
4.1 Learned counsel further submits that the Tribunal has not
recorded any finding as to whether the notice under Section
143(2) of the Act was issued on the original return or on the
revised return. In that view of the matter, it is submitted that
the contention urged on behalf of the Revenue is unsustainable.
5. Having considered the submissions of the learned counsel
appearing for the parties, we notice that the impugned order is
an order of remand passed by the Tribunal directing
consideration of certain issues by the CIT(A). One of the issues
so remitted pertains to the validity of the notice issued under
Section 143(2) of the Act. In paragraph 6.2 of the impugned
order, the Tribunal has held as follows:
“It is noticed that the fact that the revised return is
subjected to processing during assessment as per
the above letter dated 09.05.2024. Also, we note
that the said revised return is said to be belatedly
filed by the assessee. All these situations has not
been addressed by the Ld.CIT(A) while considering
the additional ground raised at the time of hearing in
the impugned order. WE note that the Ld.CIT(A) has
dismissed the issue by holding that an unsigned
notice issued u/s. 143(2) dated 21.09.2015 by email
will not vitiate the proceedings. In our opinion, this
issue and the arguments raised by both sides before
us needs to be properly verified by the Ld.CIT(A).
Having regards to the fact that the revised return
i.e., belatedly filed by the assessee was processed
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ITA No. 5 of 2025
HC-KAR
during the assessment proceedings for which no
notice u/s. 143(2) has been issued. In our
considered opinion, we direct eh Ld.CIT(A) to decide
the legal issue raised by assessee based on the
above admitted facts in accordance with alw. We
therefore restrain from deciding the issue on merits
at this stage and the same is kept open.
Accordingly, the appeal stands remitted to the
Ld.CIT(A) for fresh consideration on ground nos. 2.1-
2.2 raised by assessee before this Tribunal.
In the result, the appeal field by the assessee
stands allowed for statistical purposes.”
6. Having regard to the fact that the revised return, which
was belatedly filed by the assessee, was processed during the
assessment proceedings without issuance of any notice under
Section 143(2) of the Act, the aforesaid observation
undoubtedly conveys that the notice under Section 143(2) of
the Act was issued on the basis of the belatedly filed revised
return. If the said observation is allowed to remain in the order,
the apprehension expressed by the Revenue that the order of
remand would not serve its intended purpose cannot be
rejected outright.
7. In that view of the matter, the aforesaid portion of the
impugned order contained in paragraph 6.2 is hereby deleted.
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ITA No. 5 of 2025
HC-KAR
All contentions of both parties with regard to the validity or
otherwise of the issuance of notice under Section 143(2) of the
Act are kept open to be adjudicated by the CIT(A).
Except for the aforesaid observations, the present appeal
is not entertained and accordingly stands disposed of.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(K. V. ARAVIND)
JUDGE
BSV
CT:bms
List No.: 1 Sl No.: 20