Kovi Veeraraghavulunaidu Vs Assessment Unit (Karnataka High Court)
Karnataka High Court Quashes Reassessment for Non-Service of Section 148A(b) Notice and Breach of Faceless Assessment SOP
The Karnataka High Court set aside the reassessment order, computation sheet, demand notice and penalty proceedings after finding that the assessee had not been served with the notice under Section 148A(b), thereby depriving him of the statutory opportunity to respond before initiation of reassessment proceedings.
The Court also relied on its earlier decision in W.P. No. 6410/2026, wherein it had held that failure to grant the minimum response time prescribed under the Standard Operating Procedure (SOP) for the National Faceless Assessment Scheme dated 03.08.2022 vitiates the entire assessment proceedings. Since the Revenue did not controvert the assessee’s assertion regarding non-service of the Section 148A(b) notice, the Court held that interference was warranted.
Accordingly, the Court quashed the reassessment order, computation sheet, demand notice and penalty proceedings, while granting liberty to the assessee to file a reply to the first notice issued under Section 142(1). The Department was directed to provide the assessee an effective opportunity to submit its response, with all issues on merits left open for fresh consideration.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the Assessment Order dated 03.02.2026 and the subsequent computation and demand/penalty notices that are also even dated. The impugned annexures are produced as Annexures – Al to A5. The assessment order is without a response from the petitioner, and the petitioner’s case is it is not served with any of the notices, including notices under Section 148A(b) of the Income Tax Act, 1961 [for short the IT Act].
