ITO Vs Venkatala Iyyappa Rajanna (Karnataka High Court)
Karnataka HC Dismisses Revenue’s Appeal – Reopening Notices for AY 2015-16 Issued After 01.04.2021 Are Invalid
Revenue filed Writ Appeal No. 612 of 2025 before the Karnataka High Court, challenging the order of the learned Single Judge dated 04.06.2024 in WP No. 12618/2024 (T-IT),
Assessee had impugned a notice dated 20.03.2022 issued u/s 148A(b) for AY 2015-16, arguing that (i) it did not provide the mandatory minimum 7 days for response, & (ii) reassessment for AY 2015-16 was itself unsustainable since all notices after 01.04.2021 were barred
Single Judge accepted these contentions & set aside the notice u/s 148A(b), the consequential order u/s 148A(d) dated 31.03.2022, & all reassessment proceedings.
Court’s Findings (Division Bench)
Violation of Section 148A(b):
- The notice dated 20.03.2022 required reply by 25.03.2022,
- thus granting only 5 days instead of the statutory minimum 7 days.
- Hence, the notice was contrary to law
Invalidity of Notices for AY 2015-16 After 01.04.2021:
- The Supreme Court in Union of India v. Rajeev Bansal (2024 INSC 754) recorded the Revenue’s concession that all reassessment notices for AY 2015-16 issued on/after 01.04.2021 must be dropped.
- This was reiterated in Deepak Steel & Power Ltd v. CBDT (CA 5177/2025, SC) & ITO v. R.K. Build Creations (P) Ltd (SLP dismissed by SC, 03.10.2024).
- Accordingly, the reassessment proceedings in this case, initiated by notices dated 20.03.2022 & 31.03.2022, were unsustainable
Revenue’s Concession:
- Counsel for Revenue fairly admitted that the above SC rulings covered this case.
Outcome
- The Division Bench upheld the Single Judge’s order.
- Revenue’s writ appeal dismissed.
- Pending applications also disposed of
Key Takeaways
- Notices u/s 148A(b) must provide at least 7 clear days for response; otherwise, they are invalid.
- For AY 2015-16, all reassessment notices issued on or after 01.04.2021 are legally unsustainable in light of SC rulings in Rajeev Bansal & Deepak Steel.
- Karnataka HC has aligned with SC precedent, reinforcing nationwide uniformity on this issue.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
