Sainarayan Rathi Vs Assessment Unit (Karnataka High Court)
Ex Parte Reassessment Over Investments from Permanent Alimony Set Aside: Karnataka High Court Grants Fresh Opportunity After PAN Transfer
The Karnataka High Court has set aside an ex parte reassessment order passed against an assessee who claimed that she had not received the statutory notices and that the investments questioned by the Income-tax Department were made out of permanent alimony received following her divorce. The Court considered that a detailed explanation from the assessee would facilitate a complete adjudication and therefore restored the reassessment proceedings with a fresh opportunity to respond.
The petitioner, Sainarayan Rathi, was originally residing in Bengaluru. After her marriage, she shifted to Tamil Nadu. Following the conclusion of divorce proceedings, she relocated to Bengaluru. These changes in residence subsequently gave rise to an issue concerning the territorial jurisdiction over her PAN.
For Assessment Year 2021-22, reassessment proceedings were initiated against her by issuance of a notice under Section 148 dated 27 March 2025. During the proceedings, a notice under Section 142(1) was issued on 10 July 2025, followed by a show-cause notice dated 3 February 2026 proposing completion of assessment under Section 144.
According to the petitioner, she did not receive any of these notices and was consequently unable to participate in the proceedings or place her explanation before the Income-tax authorities. The assessment was thereafter completed ex parte on 18 February 2026 under Section 147 read with Sections 144 and 144B.
Want to Read the Complete Judgment?
You have read the free case summary. Unlock the full judgment, the detailed judicial reasoning and the downloadable PDF, along with every other premium judgment on TaxGuru.
Already subscribed? Log in
One subscription covers the entire premium judgment library, not just this case.
