S T Prasad Vs CIT (Appeals) (Karnataka High Court)
Cash Deposits, Cancer & a Closed Appeal Reopened: Karnataka HC Restores Proceedings U/s 250 Without Disturbing Assessment u/s 143(3) r.w.s. 147
Summary: In S.T. Prasad v. Commissioner of Income Tax (Appeals) & Another, the Karnataka High Court examined a challenge to an assessment order dated 29.12.2017 & an appellate order dated 30.03.2026 concerning AY 2011-12. The petitioner, aged 68, was the former proprietor of Penguin Security Services Enterprises. The assessment resulted in a demand of ₹25,03,000 towards tax & interest.
The AO completed assessment u/s 143(3) r.w.s. 147 on the basis that cash receipts deposited in a bank account had not been offered to tax. The Commissioner of Income Tax (Appeals) disposed of the ensuing appeal ex parte u/s 250, recording failure to respond to repeated notices.
The appellate record showed six notices dated 15.01.2021, 06.04.2023, 10.03.2025, 24.04.2025, 02.05.2025 & 20.06.2025, but no compliance. The appellate order was pronounced on 30.03.2026. The petitioner invoked Articles 226 & 227 of the Constitution, seeking quashing of both orders.
The essential issue was whether the High Court should interfere with the ex parte appellate order, despite the petitioner’s failure to participate in several hearings, when he claimed that serious illness had prevented compliance & that the disputed bank account did not belong to him. A related issue was whether the Court should quash the reassessment or merely restore the appeal for investigation of the bank account’s ownership.
