- 1 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 2901 OF 2025 (T-IT) BETWEEN: SRI SIDDALINGESWARA SWAMY SHRINE, TRUST(R) YEDIYUR KUNIGAL TALUK, REPRESENTED BY ITS EXECUTIVE OFFICER, TUMKUR DISTRICT-572142. …PETITIONER (BY SMT. POORNIMA H S., ADV.) AND: 1. THE INCOME TAX OFFICER WARD 1, TUMAKURU IT OFFICE, AYAKAR BHAVAN, KUNIGAL ROAD, RAMAKRISHNA NAGAR TUMKUR, KARNATAKA-572101. 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX BENGALURU 2, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA BENGALURU 560095. Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 3. THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEALS CENTER (NFAC) ROOM NO. 245-A NORTH BLOCK NEW DELHI - 110001. …RESPONDENTS (BY SRI. E. I. SANMATHI, ADV. FOR R1 TO R3.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD. 02.01.2025 BEARING NO. ITBA/COM/F/17/2024-25/1071813551(1) FOR THE ASSESSMENT YEAR 2015-16 PASSED BY THE PCIT BENGALURU-2 THE R-2 HEREIN IS AT ANNX-M AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ ORAL ORDER 1. Petitioner is before this Court seeking for following reliefs: a. Quash the order dated 02.01.2025 bearing No.ITBA/COM/F/17/2024-25/1071813551(1) for the assessment year 2015-16, passed by the PCIT, Bengaluru-2, respondent No.2 herein is at Annexure-M. - 3 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 b. Quash the order dated 02.01.2025 bearing No.ITBA/COM/17/2024-25/1071814255(1) for the assessment year 216-17, passed by the PCIT, Bengaluru-2, respondent No.2 herein is at Annexure-N. c. Quash the order dated 02.01.2025 bearing No.ITBA/F/17/2024-25/1071814909(1) for the assessment year 2018-19, passed by the PCIT, Benagaluru-2, respondent No.2 herein is at Annexure-P. d. Quash the order dated 02.01.2025 bearing No.ITBA/COM/F/17/2024-25/1071815346(1) for the assessment year 2019-20, passed by the PCIT, Bengaluru-2, respondent No.2 herein at Annexure- Q. e. Quash the attachment notice dated 03.12.2024 issued by respondent No.1 bearing No.ITBA/RCV/S/226/(3)-1/2024-25/1070834156(1) is at Annexure-K. f. Refund the entire amount so forfeited from the attached bank account of the petitioner towards amount of pre-deposit, with up to date interest based on the impugned orders. - 4 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 g. Direct the respondents to accept the belated returns filed by the petitioner for all the assessment years not filed up to date, h. Call for records, examine the records in relation to appeal bearing No.743764590061224, 744112760061224, 744055660061224 and 747418460101224 pending before respondent No.3 and direct the respondent No.3 for speedy disposal of above mentioned appeals without awaiting the payment of pre-deposit raised vide Annexure-M, N, P & Q pending before the respondent No.3. i. Grant such other and further relief as this Hon'ble Court deems fit in the interest of justice and equity. 2. By way of impugned order passed at Annexure - M, N, P and Q, the Appellate Authority has come to the conclusion that Income Tax returns for the assessment years 2015-16, 2016-17, 2018-19 and 2019-20 have not been filed by the petitioner and assessment orders has been passed under Section 144 read with Section 147 read with Section 144B of the Income Tax Act, 1961 (for short - 5 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 'the Act'). The assessment being completed, a demand of Rs.32,88,56,282/- (Rupees Thirty two crores eighty eight lakhs fifty six thousand and two hundred and eighty two only) was raised which is challenged by the petitioner by filing the aforesaid appeals. In the said appeals, on account of earlier attachment order passed, a sum of Rs.50,00,000/- (Rupees Fifty lakhs only) was collected from the bank account of the petitioner as pre-deposit by determining the deposit amount at Rs.6,05,73,080/- (Rupees Six Crores and Five lakhs seventy three thousand and eighty only) at the rate of 20% of the outstanding demand raised and further directed the balance amount to be paid in equal monthly installments starting from the month of January, 2025. It is noticed that neither the number of equal installments nor period during which the equal installments have to be paid has been mentioned in the said order. 3. Learned counsel for the petitioner relies upon decision of the Co-ordinate Bench of this Court dated - 6 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 23.02.2017 in WP Nos.1339-1342/2017 in the case of Flipkart India Private Limited vs. The Assistant Commissioner of Income Tax and Others, more particularly on paragraph Nos.16 and 17 thereof which are reproduced as under: "16. It is true that Instruction No.4 (B)(b) of the Circular dated 29.2.2016, gives two instances where less than 15% can be asked to be deposited. However, it is equally true that the factors, which were directed to be kept in mind both by the Assessing Officer, and by the higher superior authority, contained in Instruction No.2-B(iii) of Circular No.1914, still continue to exist. For, as noted above, the said part of Circular No.1914 has been left untouched by the Circular dated 29.2.2016. Therefore, while dealing with an application filed by an assessee, both the Assessing Officer, and the Prl. CIT, are required to see if the assessee’s case would fall under Instruction No.2-B(iii) of Circular No.1914, or not? Both the Assessing Officer, and the Prl. CIT, are required to examine whether the assessment is “unreasonably highpitched”, or whether the demand for depositing 15% of the disputed demand amount “would lead to a genuine hardship being caused to the assessee” or not? 17. A bare perusal of the two orders, both dated 23.11.2016, Annexure-`A’ and `B’, clearly reveal that the Assessing Officer has - 7 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 relied upon Instruction No.4(B)(b) of the Circular dated 29.2.2016, and has concluded that since the petitioner’s case does not fall within the two illustrations given therein, therefore, it is not entitled to seek the relief that less than 15% should be demanded to be deposited by it. Moreover, the Assessing Officer has jumped to the conclusion that the petitioner’s finances do not indicate any hardship in this case. However, the Assessing Officer has not given a single reason for drawing the said conclusion. Since the petitioner has been constantly claiming that it has suffered loss from the very inception of its business, from 2011 to 2016, the least that the Assessing Officer was required to do was to elaborately discuss as to whether “genuine hardship” would be caused to the petitioner in case the petitioner were directed to pay 15% of the disputed demand amount or not? Yet the Assessing Officer has failed to do so. Therefore, this part of the order, naturally, suffers from being a non- speaking order. Hence, the said orders are legally unsustainable". 4. By relying on Flipkart's case, he submits that, while dealing with an application filed by an assessee, both the Assessing Officer, and the Prl. CIT, are required to see if the assessee's case would fall under Instruction No.2-B(iii) of Circular No.1914, or not and thereafter to examine whether the assessment is "unreasonably highpitched" and - 8 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 if a demand for pre-deposit is made depending on the quantum of pre-deposit whether it would lead to genuine hardship being caused to the assessee or not? 5. The Co-ordinate Bench of this Court has categorically held that when the waiver request of pre -deposit is made by an assessee, it is required that a reasoned order has to be passed considering the hardship and why the demand of pre-deposit is proper? 6. In the present case, a perusal of Annexure-M,N,O and P does not indicate any application of mind in compliance with the observation made by Co-ordinate Bench of this Court in Flipkart's case. In that view of the matter, I am of the considered opinion that the matter is required to be remitted to respondent No.2 for fresh consideration on the application of waiver filed by the petitioner in terms of the observation made by the Co- ordinate Bench in FlipKart's case (supra) and pass necessary orders thereon. The petitioner would be entitled to place on record any documents or to rely on evidence as to the genuine hardship caused to the petitioner as also prayer of the petitioner that the petitioner being a Hindu Charitable Trust is exempt from payment of tax. - 9 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 7. In that view of the matter, I proceed to pass the following: ORDER i. Writ Petition is allowed. ii. Annexure - 'M', 'N', 'O', 'P' and 'Q' are quashed. Consequently the attachment of notice dated 03.12.2024 at Annexure-'K' is kept in suspension subject to the result of the order to be passed by respondent No.2 on the remand being made upon. iii. The matter is remitted to respondent No.2 for fresh consideration on the application filed by the petitioner for waiver of pre-deposit as per the observation made herein and as per the observation made in the Flipkart's case. iv. The suspension of the attachment notice shall be subject to the fresh order passed by respondent No.2. v. Consequently, the application is allowed in the event respondent No.2 coming for a conclusion that there is no pre-deposit required to be made and or altering the nature of the quantum of pre-deposit. If any excess amount is available with the said - 10 - HC-KAR NC: 2025:KHC:25100 WP No. 2901 of 2025 respondent, the same shall be refunded to the petitioner. vi. Respondent No.2 is requested to pass necessary orders as expeditiously as possible preferably within a period of eight weeks. vii. Since the order is passed in the presence of learned counsel for the petitioner, the petitioner shall appear before the Appellate Tribunal on 22.07.2025 at 2.30 P.M. without further notice. viii. Pending IAs' do not survive for consideration. SD/- (SURAJ GOVINDARAJ) JUDGE SSD List No.: 1 Sl No.: 46