BASAVARAJ SIDDAPPA GADAGI,RON vs. THE INCOME TAX OFFICER-WARD-1, GADAG

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ITA 955/BANG/2026Status: DisposedITAT Bangalore20 July 2026AY 2015-164 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under section 148A(b) was invalid because it granted the assessee less than the mandatory seven days to respond. Consequently, the consequential assessment order was quashed.

What were the facts?

The Assessing Officer passed an assessment order under section 147, adding peak credit of ₹5,92,302 to the assessee's income. The assessee appealed, arguing that the notice under section 148A(b) was invalid as it provided less than seven days for response.

What were the issues?

Whether a notice issued under section 148A(b) providing less than seven days for response is invalid. Whether a consequential assessment order based on such a notice is sustainable.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A(b),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI

IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT ITA No. : 955/Bang/2026 Assessment Year : 2015-16

Basavaraj Siddappa Gadagi Individual The Income Tax Officer Near Teachers Bank, Gadag Jakkali Road, RON, Vs. Karnataka 582102 PAN: BAFPG3962B APPELLANT RESPONDENT

Assessee by : Sri. Kashinath Kamath, Advocate : Sri. Ganesh R Ghale, Advocate – Revenue by Standing Counsel for Revenue

Date of Hearing : 25-05-2026 Date of Pronouncement : 20-07-2026

ORDER PER PRASHANT MAHARISHI, VICE PRESIDENT 1. This appeal is filed by Basavaraj Siddappa Gadagi [the appellant] against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT(A)] for assessment year 2015-16 on 17 February 2026. The appeal before the learned CIT(A) was instituted on 6 April 2023 against the assessment order dated 23 March 2023 passed under section 147 of the Income-tax Act, 1961 [the Act] by the Income Tax Department e-Assessment Centre. The assessment determined the total income of the assessee at ₹6,78,160, as against the returned income of ₹85,860 filed in response to notice under section 148 of the Act, by adding peak creditof ₹5,92,302. The learned CIT(A) dismissed the appeal.

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ITA No. : 955/Bang/2026

2.

The assessee is in appeal before us. The assessee contends that the notice issued under section 148A(b) dated 22 March 2022required compliance on or before 28 March 2022. According to the assessee, in view of the binding decision of the Hon’ble Karnataka High Court in W.P. No. 12393/2024 and W.P. No. 1368/2025, the notice is invalid because it allowed less than seven days to respond, and the assessment order therefore deserves to be quashed on this ground alone. The second ground raised is that, for assessment year 2015-16, the notice dated 31 March 2022 under section 148 of the Act is barred by limitation. Relying on the coordinate Bench decision of the Mumbai Bench in ITA No. 6666/M/2025 for assessment year 2015-16, the assessee submits that there opening of assessment is not sustainable in law.

3.

On the facts of the case and after hearing the parties, we find that the notice under section 148A(b) of the Act for assessment year 2015-16 was issued by the learned Assessing Officer on 22 March 2022, granting the assessee time only up to 28 March 2022.This period is less than seven days.

4.

In Masood Gulam v. Income Tax Officer, W.P. No. 12393 of 2024, dated 21 August 2024, the Hon’ble Karnataka High Court held that the minimum period of seven days prescribed under section 148A(b) of the Act, as also held by the Hon’ble Bombay High Court, must be followed. Failure to grant that period violates the Act as well as the principles of natural justice, and the impugned order is therefore liable to be quashed.

5.

The learned Departmental Representative could not show any reason why a notice issued under the amended provisions granting the assessee less than seven daysto respond can be sustained.

6.

In Principal Chief Commissioner of Income-tax vs. Smt. Komarla Yogendra Keertana [2025] 178 taxmann.com 450 (Karnataka)/[2025] 307 Taxman 106 (Karnataka)[20-08-2025] Honourable Karnataka High court has held that :-

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ITA No. : 955/Bang/2026

“4. Petitioner approached the learned Single Judge questioning, Section 148A(b), notice dated 24.03.2022, mainly urging that the notice would not provide seven days' time to respond to the said notice. The learned Single Judge under the impugned order quashed the said notice, accepting the contention of the petitioner and reserving liberty to the respondent- revenue to initiate appropriate proceedings against the petitioner in accordance with law. 5. Learned counsel for the appellant-revenue, in addition to the grounds urged in the memorandum of appeal submits that the time provided under Section 148A(b) is not mandatory and it is directory. 6. We have given our thoughtful consideration to the contentions urged by the appellant-revenue. However, we are not in a position to accept the contention of the appellant revenue in view of the decision of the Co- ordinate Bench dated 05.08.2025 in W.A. No.612/2025. 7. Admittedly, in the instant case, Section 148A(b) notice is dated 24.03.2022, which is placed on record as Annexure-A, calling upon the petitioner to reply on or before 29.03.2022. Section 148A requires providing of minimum seven days' notice to the assessee to respond to the said notice. The Co-ordinate Bench in the decision (supra), considering identical contention at paragraph No.5, has held as follows: " 5. It is clear from the plain reading of Clause (b) of Section 148A of the Act, that a notice under Section 148A(b) of the Act is required to provide an opportunity to the assessee to respond to the information which may suggests that the assessee's income has escaped assessment. The minimum period of such notice is stipulated as "not less than seven days". In the present case, the impugned notice was issued on 20.03.2022 and the Assessee was called upon to furnish a reply on or before 25.03.2022. Indisputably, the impugned notice did not comply with the requirement of providing a minimum period of seven days to respond to the said notice." 8. There is no reason to disagree with the above decision. Therefore, respectfully following the above decision, the present appeal stands dismissed.”

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ITA No. : 955/Bang/2026

7.

In view of the above facts, the notice issued under section 148A(b) dated 22 March 2022, requiring compliance by 28 March 2022, granted the assessee less than seven days. Accordingly, the notice is not sustainable in law, and the consequential assessment order passed by the learned Assessing Officer is also required to be quashed. We, therefore, quash the same.

8.

In the result, the appeal filed by the assessee is allowed on this ground.

Order pronounced in the open court on 20th July, 2026.

Sd/- (PRASHANT MAHARISHI) VICE-PRESIDENT Bangalore, Dated, the 20th July, 2026. *VM* *TNTS* Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore

By order

Assistant Registrar, ITAT, Bangalore

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