Smt. Muniyappa Rathnamma Vs ITO (Karnataka High Court)
Reassessment Proceedings Quashed for Breach of s.151A Framework; Karnataka HC Applies Ramachandra Reddy Ratio
The Karnataka High Court, in Smt. Muniyappa Rathnamma vs. Income Tax Officer & Ors. (W.P. No. 36559 of 2025, order dated 03-Dec-2025), quashed the entire reassessment proceedings for AY 2015-16, including the notice u/s 148, order u/s 148A(d), assessment order u/s 147 r/w s.144, computation sheet, demand notice u/s 156, and penalty notices u/s 271F & 271(1)(c).
The Court held that the case was squarely covered by the coordinate bench judgment in Ramachandra Reddy Ravi Kumar vs. DCIT (dated 28-08-2025), wherein it was held that show-cause notices and reassessment actions initiated outside the statutory scheme of Section 151A are void and stand obliterated in law. Applying the same ratio, the High Court ruled that all consequential proceedings flowing from such invalid initiation were unsustainable.
Accordingly, the writ petition was allowed, all impugned notices and orders were set aside in toto, while liberty was reserved to the Revenue to seek revival of proceedings depending on the outcome of matters pending before the Supreme Court, with all rival contentions expressly kept open.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, petitioner seeks for the following reliefs:-
“i. Quash the Impugned Notice dated 30.03.2022 bearing DIN & Notice No.: ITBA/AST/S/148_1/2021- 22/1042065787(1), issued by the 1st Respondent under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2015-16 (Annexure ‘A’)
ii. Quash the Impugned Order dated 30.03.2022, bearing DIN and Notice Number ITBA/AST/F/148A/2021-22/1042041869(1) passed by the 1st Respondent under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2015- 16 (Annexure ‘A-1’);
iii. Quash the Impugned Assessment Order dated 23.03.2023 bearing DIN: ITBA/AST/S/147/2022- 23/1051190600(1) passed by the 1st Respondent under Section 147 read with section 144 of the Income Tax Act, 1961 for the Assessment Year 2015- 16 (Annexure ‘B’)
iv. Quash the Impugned Computation Sheet dated 23.03.2023 bearing DIN No.ITBA/AST/S/114/2022- 23/1051190889(1) issued by the 1st Respondent for the Assessment Year 2015-16 (Annexure ‘B-1’);
v. Quash the Impugned Notice of Demand dated 23.03.2023 bearing DIN No.ITBA/AST/S/156/2022- 23/1051190765(1) ) issued by the 1st Respondent under Section 156 of the Income Tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘B-2’);
vi. Quash the Impugned Notice of penalty dated 26.04.2023 bearing DIN No. ITBA/PNL/F/271F/2023- 24/1052346348(1) issued by the 1st Respondent under Section 271F of the Income Tax Act, 1961 for the Assessment Year 2015-16 (Annexure ‘C’);
vii Quash the Impugned Notice of penalty dated 02.05.2023 bearing DIN No. ITBA/PNL/F/271(1)(c)/2023-24/1052512290(1) issued by the 1st Respondent under Section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2015- 16 (Annexure ‘C-1’); viii. Pass such other orders or directions as this Hon’ble Court may deem fit in the interest of justice and equity.”
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
