THE DEPUTY COMMISSIONER OF INCOME TAX vs MR NITIN GUPTA
- Court
- Karnataka High Court
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ND
DATED THIS THE 2 DAY OF NOVEMBER, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA
WRIT APPEAL NO. 698 OF 2026 (T-IT)
BETWEEN:
1. THE DEPUTY COMMISSIONER OF INCOME TAX
TAX CIRCLE 3(1)(1) BMTC BUILDING
80 FEET ROAD, KORAMANGALA
BENGALURU - 560 095
…APPELLANT
(BY SRI E.I. SANMATHI, ADVOCATE)
AND:
1. MR NITIN GUPTA
S/O MR. SATENDRA GUPTA
AGED ABOUT 50 YEARS
VILLA 585, PHASE 3
ADARSH PALM RETREAT
OUTER RING ROAD
BELLANDUR
BENGALURU - 560 103
…RESPONDENT
Digitally
signed by
VEERENDRA
KUMAR K M
Location:
High Court of
Karnataka
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER DATED 14/10/2025 IN W.P. NO.19074/2022 (T-IT) PASSED BY
THE HON’BLE LEARNED SINGLE JUDGE AND ETC.
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
THIS APPEAL, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MRS. JUSTICE K.S. HEMALEKHA
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. For the reasons stated in the application, I.A.No.1/2026, the
same is allowed. The delay of 85 days in filing the present appeal
is condoned.
2. The Revenue has filed the present appeal impugning an
order dated 14.10.2025 passed by the learned Single Judge in Writ
Petition No.19074/2022 (T-IT).
3. The respondent ( Assessee ) had filed the said petition
impugning an order dated 29.07.2022 passed by the learned
Assessing Officer [ AO ] under Section 148A(d) of the Income Tax
Act, 1961 [ the Act ] for the Assessment Year [ AY ] 2015-16 as well
as the notice issued under Section 148 of the Act for the said AY.
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
4. The learned Single Judge found that the notices were
unsustainable in view of the concession made by the Revenue in
1
Union of India and others v. Rajeev Bansal .
5. The Assessee filed its returns of income on 28.11.2015. The
same was picked up for scrutiny and the Assessment proceedings
culminated in an order dated 29.12.2017.
6. The Assessee had declared a Long-Term Capital Gain
₹
[ LTCG ] of 16,60,20,182/- arising from transfer of shares and had
₹
claimed exemption of 2,24,21,692/- under Section 54F of the Act.
7. The Assessee claimed that it made payments for
₹
construction of a residential house amounting to 78,10,000/- and
₹
purchased land for 1,44,00,000/-. The Assessment Order
₹
indicates that the Assessee had disclosed that 78,10,000/- was
paid to his relatives. The Assessment Order sets out a tabular
statement setting out the persons to whom payments were made
and their relation with the Assessee.
1
[2024] 469 ITR 46 (SC)
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
8. The AO held that the Assessee had failed to provide the
necessary details regarding construction of the house and
therefore denied the exemption to the extent of Rs.80,69,490/-.
9. The notice under Section 148 of the Act is also premised on
the same ground: that the Assessee failed to provide proper
particulars regarding the acquisition of a residential property. The
AO now seeks to make an addition of the entire amount of
₹
2,24,21,692/- on the same ground on which the addition was
made in the assessment order.
10. The learned counsel appearing for the Revenue submits that
the concession made by the Revenue in the case of Rajeev
Bansal ( supra ) is not applicable to the present case, as the notice
under Section 148A of the Act was issued on 30.06.2021, which
was directed to be considered as a notice under Section 148(b) of
the Act, in terms of the decision of the Supreme Court in Union of
2
India v. Ashish Agarwal .
2
[2022] 444 ITR 1 (SC)
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
11. The Revenue contends that the limitation of six years expired
on 31.03.2022 and therefore, the Taxation and Other Laws
(Relaxation and Amendment of Certain Provisions) Act, 2020
[ TOLA ] would not be applicable. The learned counsel contends
that since the notice had been issued prior to 31.03.2022, it was
within the period of limitation.
12. It is relevant to refer to the concession made by the
Revenue, as recorded in the Supreme Court’s decision in Rajeev
Bansal (supra). The relevant extract is set out below:
“19. Mr. N.Venkataraman, learned Additional
Solicitor General of India, made the following
submissions on behalf of the Revenue:
a.
b.
c.
d.
e. The Finance Act, 2021 substituted the old
regime for re-assessment with a new regime. The
first proviso to section 149 does not expressly bar
the application of TOLA. Section 3 of TOLA
applies to the entire Income-tax Act, including
sections 149 and 151 of the new regime. Once the
first proviso to Section 149(1)(b) is read with
TOLA, then all the notices issued between April 1,
2021 and June 30, 2021 pertaining to the
assessment years 2013-2014, 2014-2015, 2015-
2016, 2016-2017, and 2017-2018 will be within the
period of limitation as explained in the tabulation
below:
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
Assessment Within 3 Expiry of
year years Limitation read
with TOLA for(2)
Within six Expiry of
years Limitation read
with TOLA for
(4)
(1) (2) (3) (4) (5)
2013-2014 31-3-2017 TOLA not 31-3-2020 30-6-2021
applicable
2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021
applicable
2015-2016 31-3-2019 TOLA not 31-3-2022 TOLA not
applicable applicable
2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not
applicable
2017-2018 31-3-2021 30-6-2022 31-3-2024 TOLA not
applicable
f. The revenue concedes that for the
assessment year 2015-16, all notices issued on or
after 1 April 2021 will have to be dropped as they
will not fall for completion during the period
prescribed under the Taxation and Other Laws
(Relaxation and Amendment of Certain
Provisions) Act, 2020 ;”
13. We may note that the concession made by the Revenue was
that all notices issued on or after 01.04.2021 in respect of AY 2015-
16 would have to be dropped. The Revenue's contention that the
limitation of six years is applicable in the facts of the present case
is also unpersuasive.
14. The Assessee’s claim for deduction under Section 54F was
the subject matter of the examination by the AO during the
assessment proceedings. The assessment was made on the basis
of non-disclosure of certain particulars. Thus, the same ground will
not be available for an extended period of limitation. It is also
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HC-KAR
NC: 2026:KHC:60707-DB
WA No. 698 of 2026
CNR: KAHC010145522026
clearly a case of change of opinion and the AO seeking a review of
the assessment order by reopening the assessment, which is
impermissible. For this reason as well, the impugned notice is liable
to be set aside.
15. In view of the facts noted above, we concur with the learned
Single Judge's conclusion that the impugned notice is
unsustainable. Consequently, the order under Section 148A(d) of
the Act, the notice under Section 148 and other notices issued
pursuant thereto for the AY 2015-16 stand quashed.
16. The appeal is, accordingly, dismissed.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(K.S. HEMALEKHA)
JUDGE
KMV
List No.: 2 Sl No.: 14