E D INNOVATION SOCIETY vs. THE DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX

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WP/16121/2026HC KarnatakaKAHC01033801202629 July 2026Author: B M SHYAM PRASAD6 pages
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What did the High Court hold?

The High Court allowed the petition in part. The Court held that there was a procedural irregularity in the assessment proceedings. The Assessment Order dated March 30, 2026, and the consequential Penalty Notice dated March 30, 2026, were quashed. The Court reasoned that the Assessment Order did not refer to the petitioner's reply dated March 12, 2026, and the request for a personal hearing. It is trite law that failure to extend a personal hearing when sought for is a ground for interference. Furthermore, the petitioner's request for time, as contemplated under the SOP, was not considered. Consequently, the proceedings were restored, with liberty granted to the petitioner to file a response to the Show Cause Notice dated March 9, 2026, with supporting documents. The second respondent was directed to enable an opportunity on the portal for the petitioner to file a detailed response and extend a personal hearing. All questions were left open to be considered in the restored proceedings.

What were the facts?

The petitioner, E D Innovation Society, filed a writ petition challenging an ex parte Assessment Order dated March 30, 2026, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2024-25. The petitioner also challenged a consequential Penalty Notice dated March 30, 2026, issued under Section 274 read with Section 270A of the Act. The petitioner's grievance was that the Show Cause Notice issued on March 9, 2026, provided a response deadline of March 14, 2026, which was contrary to the Standard Operating Procedure (SOP) requiring seven days' notice. The petitioner responded on March 12, 2026, requesting time and a personal hearing, but the proceedings concluded without considering this response or granting a hearing.

What were the issues?

1. Whether the Assessment Order dated March 30, 2026, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is liable to be quashed on the grounds of procedural irregularity, specifically the inadequate time provided to respond to the Show Cause Notice and the denial of a personal hearing? Assessee's Contention: The petitioner argued that the Show Cause Notice dated March 9, 2026, provided a response deadline of March 14, 2026, which violated the SOP mandating seven days' notice. The petitioner further contended that their response on March 12, 2026, requesting time and a personal hearing, was ignored, leading to an ex parte order without a proper opportunity to present their case. Revenue's Contention: The judgment records that the learned Standing Counsels for the respondents were heard and the records perused. No specific arguments were recorded for the revenue regarding the merits of the petitioner's contentions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 274,Section 270A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 16121 OF 2026 (T-IT)

BETWEEN:

E D INNOVATION SOCIETY A SOCIETY / TRUST REGISTERED UNDER THE KARNATAKA SOCIETIES REGISTRATION ACT, 1960, NO.22, NAGAWARA, ARABIC COLLEGE S.O, BANGALORE NORTH, BANGALORE 560095.

REPRESENTED BY TREASURER OF THE PETITIONER, CM FAIZ MOHAMMED, AGED 42 YEARS, S/O C M IBRAHIM, NO.81, BENSON CROSS ROAD, BENSON TOWN, BANGALORE 560046.

…PETITIONER (BY SRI. RAVI SHANKAR S V., ADVOCATE)

AND:

1.

THE DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX INCOME TAX, EXEMPTIONS -CIRCLE 1, BANGALORE 570027.

Digitally signed by VANAMALA N Location: HIGH COURT KARNATAKA

2.

NATIONAL FACELESS ASSESSMENT CENTRE, REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI 110003.

…RESPONDENTS (BY SRI.ARAVIND V CHAVAN., ADVOCATE A/W SRI. NIRMAL MATHEW., ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 THE CONSTITUTION INDIA PRAYING TO I) QUASH THE ORDER PASSED U/S 143(3) R.W.S 144B DATED 30/03/2026 BEARING DIN ITBA/AST/S/143(3)/2025-26/1088101876(1) PASSED BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2024-25 HEREIN MARKED AS ANNEXURE - A; II) QUASH THE PENALTY NOTICE DATED 30/03/2026 ISSUED U/S 274 R.W.S 270A OF THE ACT BEARING DIN ITBA/PNL/S/270A/2025-26/1088101882(1) BY THE RESPONDENT NO.2 FOR THE ASSESSMENT YEAR 2024- 25 HEREIN MARKED AS ANNEXURE A1.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD

ORAL ORDER

The petitioner's grievance is with the ex parte Assessment Order for Assessment Year 2024-25 under Section 143[3] read with Section 144B of the Income Tax Act, 1961 [for short, the IT Act] [Annexure-A]. The petitioner has also called in question the consequential Penalty Notice dated 30.03.2026 under Section 274 read with Section 270A of the IT Act [Annexure-A1].

2.

Sri Ravi Shankar S.V., the learned counsel for the petitioner, without much ado on the petitioner's grievance with the merits of the impugned Assessment Order, submits that this Court must intervene to restore the proceedings with opportunity to the petitioner to respond to the Show Cause Notice

dated 09.03.2026, and in this regard, the learned counsel submits that the Show Cause Notice allowed the petitioner time till 14.03.2026 contrary to the Standard Operating Procedure [SOP] which contemplates seven days' time to respond. The learned counsel also submits that the petitioner has responded to this Show Cause Notice on 12.03.2026 requesting time and for a personal hearing but the proceedings are concluded without an opportunity to file a detailed response or a personal hearing.

3.

Sri Aravind Chavan along with Sri Nirmal Mathew, the learned Standing Counsels for the respondents, are heard and the records perused specifically the Assessment Order dated 30.03.2026. The Assessment Order does not refer to the petitioner's reply dated 12.03.2026 and the request therein. It is trite that when an opportunity of personal hearing is sought for, and it is not extended, the failure is a reason for interference to restore the proceedings. In

this case there must be interference not only for the afore but also because the petitioner's request for time as contemplated under the SOP has not been considered. As such, this Court is of the view that there must be interference with the impugned Assessment Order and the Penalty Notice on terms. In the light of the afore, the following:

ORDER

The petition is allowed in-part quashing the impugned Assessment Order [Annexure-A] and consequential Penalty Notice [Annexure-A1] restoring proceedings with liberty to the petitioner to file response to the Show Cause Notice 09.03.2026 with supporting documents calling upon second respondent to enable an opportunity on the

portal to file a detailed response and extend a personal hearing leaving open all questions to be considered in such restored proceedings.

Sd/- (B.M. SHYAM PRASAD] JUDGE

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