- 1 - HC-KAR NC: 2026:KHC:23680 WP No. 12441 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12441 OF 2026 (T-IT) BETWEEN: PRATHAMIKA KRISHI PATHINA SAHAKARA SANGHA NIYAMITHA, M SHIVARA, BAGUR S.O (HASSAN), M.SHIVARA, HASSAN 573 111, (A SOCIETY REGISTERED UNDER KCS ACT, 1959) REP. BY ITS CEO, DINESH M. N. S/O NANJEGOWDA, AGE 48 YEARS, R/O. K. MALLENAHALLI, KUNDUR, CHANNARAYAPATNA, HASSAN-573 111. …PETITIONER (BY SRI. GIRISH V BHAT, ADVOCATE) AND: 1. COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI - 110 001. 2. ASSESSING OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI - 110 001. Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:23680 WP No. 12441 of 2026 3. INCOME TAX OFFICER, WARD 1 AND TPS, AAYAKAR BHAVAN, 2ND STAGE, BELUR ROAD, HASSAN - 573 201. 4. THE BRANCH MANAGER, HASSAN DISTRICT CENTRAL CO-OPERATIVE BANK LTD., UNNATHI, B. M. ROAD, HASSAN-573 201. …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE FOR R1 TO R3; SERVICE OF NOTICE TO R4 IS DISPENSED WITH) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED BANK A/C ATTACHMENT ORDER/NOTICE UNDER SEC. 226(3) OF THE ACT DATED 17.02.2026, PASSED/ISSUED BY THE 3RD RESPONDENT BEARING NO. ITBA/COM/F/17/2025- 26/1086149074(1) VIDE ANNEXURE-E TO THE WRIT PETITION AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV - 3 - HC-KAR NC: 2026:KHC:23680 WP No. 12441 of 2026 ORAL ORDER The petitioner has filed an application seeking for amendment of the petition. The amendment relates to the prayer column whereby the petitioner seeks to assail validity of the impugned assessment order as well as the demand notice. Certain additional amendments are sought including as regards the name of the petitioner. In light of the averments and submissions made, I.A.No.2/2026 filed under VI Rule 17 of CPC is allowed. Amended petition filed is taken on record. 2. The petitioner which is an Agricultural Credit Co-operative Society has called in question the validity of the assessment order at Annexure-C and submitted that the assessment order is in-effect an exparte order insofar as after filing of the return in response to the notice under Section 148, the petitioner was not in a position to appear and such lapse on part of the petitioner is due to non-communication from the auditor. - 4 - HC-KAR NC: 2026:KHC:23680 WP No. 12441 of 2026 3. It is further submitted that the authority in the assessment order has treated the deposits with the bank as unexplained income, though such deposits were deposits of the farmers and could not have been construed be an income. It is submitted that the petitioners are also entitled for exemption under Section 80P of the Income Tax Act, 1961 (for short, 'the Act') and such aspect would be demonstrated before the authority, if an opportunity is granted. 4. Learned counsel for the petitioner submits that non-participation in the proceedings may be condoned and matter be remitted to the stage of reply to the notice issued under Section 148A(b). 5. Sri. Thirumalesh, learned counsel for the revenue submits that the petitioner having filed return of income and response to Section 148 notice, has been negligent in not participating in the assessment proceedings. - 5 - HC-KAR NC: 2026:KHC:23680 WP No. 12441 of 2026 6. Perused the assessment order. The fact that the petitioner is a Credit Co-operative Society, is borne out from the name of the petitioner. The petitioner though filed a return and response to the notice under Section 148, subsequently has not participated in the proceedings. In the absence of such participation, the authority has proceeded with an addition insofar as cash deposits are concerned. 7. The petitioner has specifically asserted that the deposits cannot be treated as unexplained income as the deposits are deposits of the farmers who are members and accordingly, taking note of such submission as well as exemption claimed by the petitioner under Section 80P, it would be appropriate to remit the matter to the stage of reply to notice under Section 148A(b). 8. Accordingly, the orders at Annexures-C, D and E are set aside. Matter is remitted to the stage of reply to notice issued under Section 148A(b). The proceedings - 6 - HC-KAR NC: 2026:KHC:23680 WP No. 12441 of 2026 consequent to the notice under Section 148 are also set aside. Petitioner to appear before respondent No.2 without further notice on 25.05.2026. 9. In light of setting aside of the impugned orders as noticed above, the instructions made pursuant to recovery proceedings by the revenue to the Bank for attachment to be rescinded, forthwith. 10. Petitioner to make out reply to the notice issued under Section 148A(b) and matter to be proceeded thereafter. Petitioner to pay cost of Rs.10,000/- to the Karnataka Advocates Clerks Benevolent Trust, High Court Building, Bengaluru. 11. Accordingly, petition is disposed of. All contentions on merits are kept open. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR