SMT MANJULA NARAYANA REDDY vs THE COMMISSIONER OF INCOME-TAX (APPEALS)
- Court
- Karnataka High Court
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HC-KAR
NC: 2026:KHC:57786
WP No. 31539 of 2026
C/W
WP NO. 32121/2026
CNR: KAHC010691352026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 14 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 31539 OF 2026 [T-IT]
C/W.
WRIT PETITION NO. 32121 OF 2026 (T-IT)
W.P.NO.31539/2026:
BETWEEN:
SMT MANJULA NARAYANA REDDY
W/O JAYARAM REDDY
AGED ABOUT 51 YEARS,
RESIDING AT NO 63,
1ST MAIN KGS LAYOUT,
VIJAYNAGAR,
BENGALURU 560040.
…PETITIONER
Digitally
signed by
VANAMALA
N
Location:
HIGH
COURT OF
KARNATAKA
(BY SRI. ARUNACHALAM SHIVAKUMAR.,ADVOCATE)
AND:
THE COMMISSIONER OF
INCOME-TAX (APPEALS)
BMTC BUILDING, 6TH/7TH FLOOR,
KORAMANGALA,
BANGALORE 560095
…RESPONDENT
(BY SRI.THIRUMALESH., ADVOCATE A/W
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WP No. 31539 of 2026
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SRI. NIRMAL MATHEW., ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO
QUASHING THE IMPUGNED ORDER DATED 07.08.2025
BEARING DIN AND ORDER NO.
ITBA/NFAC/S/250/2025-26/1079379355(1), PASSED
UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961,
IN RESPECT OF ASSESSMENT YEAR 2016-17 AND
CONSEQUENTLY REMAND THE MATTER TO THE
RESPONDENT NO.1 AUTHORITY FOR FRESH
CONSIDERATION ON MERITS, BY AFFORDING THE
PETITIONER ONE FINAL AND EFFECTIVE OPPORTUNITY
OF HEARING AND TO PLACE ON RECORD ALL
RELEVANT DOCUMENTS, EXPLANATIONS AND
SUBMISSIONS, AND THEREAFTER TO PASS A FRESH,
REASONED AND SPEAKING ORDER IN ACCORDANCE
WITH LAW ANNEXURE-A.
IN W.P.NO.32121/2026 :
BETWEEN:
SMT MANJULA NARAYANA REDDY
W/O. JAYARAM REDDY
AGED ABOUT 51 YEARS,
RESIDING AT NO. 63,
1ST MAIN KGS LAYOUT, VIJAYNAGAR,
BENGALURU-560040.
…PETITIONER
(BY SRI. ARUNACHALAM SHIVAKUMAR.,ADVOCATE)
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NC: 2026:KHC:57786
WP No. 31539 of 2026
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WP NO. 32121/2026
CNR: KAHC010691352026
AND:
THE COMMISSIONER OF INCOME TAX (APPEALS)
BMTC BUILDING 6/7 FLOOR
KORAMANGALA
BANGALORE -
…RESPONDENT
(BY SRI.M. THIRUMALESH., ADVOCATE A/W
SRI. NIRMAL MATHEW., ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO
QUASHING THE IMPUGNED ORDER DATED
07/08/2025, BEARING DIN AND ORDER NO.
ITBA/NFAC/S/250/2025-26/1079379355(1) PASSED
UNDER SECTION 25 OF THE INCOME TAX ACT, 1961 IN
RESPECT OF ASSESSMENT YEAR 2016-17 AND
CONSEQUENTLY REMAND THE MATTER TO THE
RESPONDENT NO.1 AUTHORITY FOR FRESH
CONSIDERATION ON MERITS, BY AFFORDING THE
PETITIONER ONE FINAL AND EFFECTIVE OPPORTUNITY
OF HEARING AND TO PLACE ON RECORD ALL
RELEVANT DOCUMENTS, EXPLANATIONS AND
SUBMISSIONS, AND THEREAFTER TO PASS A FRESH,
REASONED AND SPEAKING ORDER IN ACCORDANCE
WITH LAW ANNEXURE A.
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NC: 2026:KHC:57786
WP No. 31539 of 2026
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WP NO. 32121/2026
CNR: KAHC010691352026
THESE PETITIONS, COMING ON FOR
PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE
THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner has suffered an Assessment
Order under Section 147 read with 144 and 144B of
the Income Tax Act, 1961 [for short, ‘ the Act’ ] on
12.03.2024. This Assessment Order is for the
assessment year 2016-17. The petitioner is issued
with notice under Section 148 of the IT Act on
19.03.2023 and the petitioner has not responded to
this notice. Thereafter, the petitioner is issued with
notice under Section 142(1) of the Act on 10.10.2023.
The petitioner has responded to this notice. However,
the petitioner has not responded to the further
notices under Section 142(1) of the Act or the
intimation under Section 144B of the Act.
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2. The proceedings are commenced against
the petitioner on the ground that she has not filed
Returns despite purchase of an immovable property
under the Sale Deed dated 24.03.2016 and that an
income chargeable to tax has escaped assessment. It
is alleged that consideration paid by the petitioner
and her son for the purchase of an immovable
property is income that has escaped assessment.
The petitioner, when served with the notice under
142(1) of the IT Act on 10.10.2023, has filed a
response stating that:
[a] she is a homemaker and she has joined
her son in the purchase of the property
only because her son wanted her to be
part of the ownership for emotional
reasons;
[b] she did not even have a bank account
in her name until the year 2021 and
her son has availed a loan of
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WP NO. 32121/2026
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Rs.50,00,000/- based on his salary for
the purchase of the property which is
transferred directly to the seller;
[c] the balance amount of Rs.10,00,000/-
is a family saving over a period of time.
3. It is seen from the records that the
petitioner has thereafter not filed any documents to
substantiate the saving of Rs.10,00,000/- and the
payment thereof to the vendor as part of the agreed
consideration. The Assessment Order dated
12.03.2024 is not on the ground that the entire sale
consideration, which is about Rs.60,00,000/-, as
escaped income and it is only insofar as
Rs.10,00,000/- for which the petitioner has not
produced documents to substantiate a case that it
was paid out of the family savings.
4. The petitioner has filed an appeal under
Section 250 of the Act pleading ill-health as the
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reason to justify the delay of 189 days in filing the
appeal. The appellate authority has observed thus to
reject the petitioner's appeal on the ground of delay.
“Notwithstanding the existence of the
aforesaid delay, the appellant has indicated
“NO” against column 14 of Form-35, which
specifically requires disclosure of any delay
in the filing of the appeal. Such a response
constitutes a misrepresentation of the
factual position and demonstrates a
complete absence of due diligence. By
failing to acknowledge the delay, the
appellant has also deprived this authority of
any opportunity to examine whether
sufficient cause existed for condonation
u/s.249(3) of the Act.”
After this order in the appeal on 07.08.2025
there is a penalty order dated 29.09.2026. The
petitioner in W.P.No.31539/2026 has called in
question the order dated 07.08.2025 in the appeal
and in W.P.No.32121/2026 has called in question the
penalty order dated 29.09.2026.
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WP No. 31539 of 2026
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WP NO. 32121/2026
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5. Sri Arunachalam Shivakumar, the learned
counsel for the petitioner, and Sri. Nirmal Mathew,
who appears on behalf of Sri M. Tirumalesh, a
learned senior standing counsel for the respondents,
and who is permitted to take notice for the
respondents, are heard on whether this Court must
intervene with the appellate Authority's order dated
07.08.2025 and the penalty order dated 29.09.2025
and restore the appeal for reconsideration or
interfere with the very assessment order dated
12.03.2024 under Section 147 read with 144/144B
of the Act in the following indisputable
circumstances.
The proceedings are begun on the ground
that a sum of Rs.60,00,000/-, beyond the
threshold that is contemplated under
Section 149 of the Act, which is chargeable
to taxes has escaped assessment with the
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WP NO. 32121/2026
CNR: KAHC010691352026
petitioner filing responds to the notice under
Section 142(1) of the Act.
The assessment is completed only for a sum
of Rs.10,00,000/- accepting the petitioner's
case that the Rs.50,00,000/- is paid from
the loan availed by the petitioner's son, a co-
purchaser, based on his salary.
6. The best judgment assessment under
Section 144 read with 144B and Section 147 of the
Act is not for the entire Rs.60,00,000/- which is
initially alleged to be the income chargeable to tax
but has escaped assessment and it is only for
Rs.10,00,000/-. This would be far below the
threshold which would permit reassessment under
Section 147 of the Act after the lapse of 3 years from
the end of the relevant assessment. These
circumstances persuade this Court to opine that
complete adjudication without protraction would be
when this Court intervenes not to restore the
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WP NO. 32121/2026
CNR: KAHC010691352026
proceedings but with a very assessment order dated
12.03.2024.
7. This Court, in arriving at this conclusion,
has also considered the details placed before the
appellate Authority on the payment of
Rs.10,00,000/- as part of the total consideration
paid to the seller. The petitioner, while asserting that
Rs.10,00,000/- was an amount that is family saving
for a period of time, has furnished joint bank
account statement held by her spouse and her son
furnishing the details of the cheques under which
the amount of Rs.10,00,000/- is paid. The petitioner
has stated that if Rs.60,000/- is remitted towards
TDS on 23.03.2016, a day before the execution of
the sale deed dated 24.03.2016, and she has also
furnished the details of the cheques under which a
sum of Rs.2,50,000/- is paid to the seller on
23.01.2016 and a sum of Rs.6,90,000/- is paid to
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the seller on 24.03.2016. In the light of this Court's
conclusion as afore, the following:
ORDER
The petitions are allowed quashing the following
and the assessment proceedings
Provisions
of Income
Tax Act,
1961
Annexures
Writ Petition
Number
Notices/
Orders
Date
31539/2026 Order 12.03.2024 147 rw. B
144/144B
32121/2026 Order 27.08.2024 271(1)(c) B
Sd/-
(B M SHYAM PRASAD)
JUDGE
SA
Ct:sr