Reassessment Cannot Begin with a Doubt and End in a Fishing Enquiry: Karnataka HC

Udai Raj Chordia Vs ACIT (Karnataka High Court)

Reassessment Cannot Begin with a Doubt and End in a Fishing Enquiry: Karnataka High Court Quashes Section 148 Notice

The Karnataka High Court has reiterated that even under the amended reassessment regime, proceedings under Section 148 cannot be initiated for conducting a roving or fishing enquiry. The Jurisdictional Assessing Officer must act on definite information, examine the material available on record and meaningfully consider the assessee’s reply before deciding that it is a fit case for reassessment.

The petitioner, Udai Raj Chordia, claimed to have rendered marketing-support services to Tata AIG General Insurance Company Limited during Assessment Year 2019-20. According to the petitioner, the commission received from the insurance company had already been disclosed in the return of income. He asserted that a sum of ₹1,42,80,000 was offered as commission income from marketing-support services.

The Income-tax Department issued a show-cause notice dated 27 March 2025 under Section 148A(1). The petitioner submitted a reply explaining the transactions and specifically pointed out that the receipts from Tata AIG had already been declared. Therefore, according to him, there was no income escaping assessment.

Notwithstanding the reply, the Assessing Officer passed an order under Section 148A(3) and issued a consequential notice under Section 148 on 27 June 2025. The petitioner approached the High Court challenging both the order and the reassessment notice, principally on the ground that his explanation and the supporting return particulars had not been properly considered.