Bevinakuppe Ningegowda Vs ITO (Karnataka High Court)
Give Me 7 Days or Give It Up! – HC tells Taxman: 5-Day Notice = 0% Validity; Giving Less Than 7 Days to Reply u/s 148A(b) is Fatal – Entire Reassessment & Penalty Quashed -Karnataka High Court
In this case, Assessee approached the Karnataka High Court challenging the validity of the reassessment proceedings initiated for AY 2018-19. The challenge was not on the merits of the addition but on a fundamental procedural illegality: the notice issued u/s 148A(b) did not grant the mandatory minimum period of seven days to respond.
The notice u/s 148A(b) was issued on 20.03.2022 & the assessee was directed to respond by 25.03.2022, effectively allowing only five days. Section 148A(b) clearly states that the Assessing Officer must provide “not less than seven days” & up to thirty days to the assessee to show cause why a notice u/s 148 should not be issued. This time period is statutory, mandatory & not a mere formality. It is a crucial safeguard ensuring that the assessee gets a fair opportunity of being heard before reopening an assessment.
Despite this violation, the department proceeded to pass the order u/s 148A(d), issued notice u/s 148, completed reassessment u/s 147 r.w.s. 144B on 06.12.2023, & even levied penalty u/s 271AAC(1) on 20.06.2024. The assessee challenged all these actions as flowing from an illegal foundation.
