DEPUTY/ASSISTANT COMMISSIONER vs. NOVOPAY SOLUTIONS PRIVATE LIMITED

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WA/1380/2026HC KarnatakaKAHC01032086202604 June 2026Bench: S.G.PANDIT,K.MANMADHA RAO5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that a notice under Section 148A(b) of the Income-tax Act, 1961, would be unsustainable if the period provided for compliance is less than seven days. This principle was established in a previous Division Bench judgment in W.A No.612 of 2025 (Income Tax Officer and ors. v. Venkatala Iyyappa Rajanna). The learned Single Judge had correctly followed this precedent. Consequently, if the notice under Section 148A(b) is set aside, all consequential orders and notices, including those under Section 148A(d), Section 148, Section 147, Section 144, and penalty notices under Sections 271AAC(1) and 272A(1)(d), also become unsustainable. The present appeal, involving identical facts and circumstances, was therefore dismissed in terms of the order in WA No.1141/2026.

What were the facts?

The appellants, Deputy/Assistant Commissioners of Income Tax and the National Faceless Assessment Centre, are challenging an order dated 08/09/2025 passed by a learned Single Judge in WP No. 12215/2025. The respondent is Novopay Solutions Private Limited. The appeal arises from a writ petition where the assessee likely challenged notices issued under the Income Tax Act. The core of the dispute revolves around the procedural validity of notices issued by the revenue. The present appeal is filed under Section 4 of the Karnataka High Court Act. The parties submit that the issue in this appeal is identical to that in WA No. 1141/2026, which was disposed of on 17.04.2026.

What were the issues?

1. Whether a notice issued under Section 148A(b) of the Income-tax Act, 1961, is unsustainable in law if the minimum period of seven days for compliance is not granted, and if this procedural lapse affects the jurisdiction to issue the notice. Assessee's Contention (as inferred from the revenue's argument and the Single Judge's decision): The notice under Section 148A(b) is unsustainable because the minimum period of seven days for compliance was not granted, rendering the subsequent proceedings invalid. Revenue's Contention: The grant of a minimum period of seven days for compliance with a notice under Section 148A(b) is not mandatory but directory. The time limit is extendable up to thirty days, and a short compliance period does not affect the jurisdiction to issue the notice. The Single Judge erred in setting aside the notice solely on this ground.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 148,Section 147,Section 144,Section 271AAC(1),Section 272A(1)(d)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2026:KHC:26321-DB WA No. 1380 of 2026

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF JUNE, 2026 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE DR. JUSTICE K.MANMADHA RAO WRIT APPEAL NO.1380 OF 2026 (T-IT) BETWEEN:

1.

DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560 095.

2.

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560 095.

3.

NATIONAL FACELESS ASSESSMENT CENTRE 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 - 110 003.

4.

THE CHIEF COMMISSIONER OF INCOME TAX 1, THE OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX 1, NO.1,

Digitally signed by VIJAYALAKSHMI B N Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:26321-DB WA No. 1380 of 2026

C R BUILDING, QUEEN'S ROAD, BENGALURU - 560 001. …APPELLANTS (BY SRI. THIRUMALESH M.,ADVOCATE) AND:

NOVOPAY SOLUTIONS PRIVATE LIMITED 2ND FLOOR, NO.18/2A, AMBALPURA VILLAGE, SARJAPURA MAIN ROAD, BELLANDUR GATE, VARTHUR HOBLI, BENGALURU -560 102.

REPRESENTED BY GAUTAM BANDYOPADHYAY DIRECTOR OF THE RESPONDENT, AGED 53 YEARS, S/O RABI LOCHAN BANERJEE, NO.T2, BLOCK 7, GANGA CHELSTON APARTMENT, SILVER SPRING ROAD, BEHIND BAGEECHA RESTAURANT, KUNDALAHALLI GATE, BANGALORE - 560 037. …RESPONDENT (BY SRI.S.V.RAVISHANKAR.,ADVOCATE)

THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER DATED 08/09/2025 PASSED BY THE LEARNED SINGLE JUDGE IN WP NO.12215/2025 AND PASS SUCH OTHER ORDER AS THIS HONBLE COURT DEEMS FIT, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE.

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HC-KAR NC: 2026:KHC:26321-DB WA No. 1380 of 2026

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE DR. JUSTICE K.MANMADHA RAO

ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE S.G.PANDIT)

Heard learned counsel Sri.Thirumalesh M appearing for the appellants and learned counsel Sri.S V Ravishankar appearing for the respondent.

2.

Both learned counsel appearing for the parties would submit that the issue and substantial question of law raised in the above appeal are considered in W.A.No.1141/2026 disposed of on 17.04.2026 and relevant paragraph Nos.3, 4 and 7 reads as follows: "3. The brief facts are that the appellant had issued a notice under Section 148A(b) of the Income-tax Act, 1961 (for short "the Act"). The said notice was challenged in the writ petition on the ground that the minimum period of seven days was not granted and, therefore, the same was unsustainable in law. The learned Single Judge, following the judgment of the Division Bench of this Court in W.A No.612 of 2025 in the case of Income Tax Officer and ors. v. Venkatala Iyyappa Rajanna, set aside the notice

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HC-KAR NC: 2026:KHC:26321-DB WA No. 1380 of 2026

issued under Section 148A(b), the order passed under Section 148A(d), the notice issued under Section 148, the assessment made under Section 147 read with Section 144, and also the penalty notices issued under Sections 271AAC(1) and 272A(1)(d) of the Act.

4.

Smt. Niyathi, learned counsel appearing for Sri M. Thirumalesh, learned standing counsel for the appellant- Revenue, submits that where the time limit provided for compliance with the notice is less than seven days, and the same being extendable, the grant of a minimum period of seven days is not mandatory. It is contended that the notice has been set aside as though the grant of a period of less than seven days would affect the jurisdiction to issue notice under Section 148A(b) of the Act. It is further submitted that Section 148A provides for extension of time up to thirty days and, therefore, the minimum period of seven days is not mandatory but only directory.

7.

The identical issue came up for consideration before this Court in W.A No.612 of 2025 in the case of Venkatala Iyyappa Rajanna (supra), disposed of on 05.08.2025, wherein it was held that a notice under Section 148A(b) would be unsustainable if the period provided for compliance is less than seven days. The learned Single Judge, following the aforesaid judgment of the Division Bench of this Court, has set aside the notice under Section 148A(b) of the Act. Once the notice is set aside, all consequential orders and notices would also become unsustainable".

3.

The present appeal also involves identical facts and circumstances. In terms of the order dated 17.04.2026 in W.A.No.1141/2026, the present appeal also stands dismissed.

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HC-KAR NC: 2026:KHC:26321-DB WA No. 1380 of 2026

Pending Interlocutory Application/s, if any, stands disposed of.

SD/- (S.G.PANDIT) JUDGE

SD/- (DR.K.MANMADHA RAO) JUDGE

GSR List No.: 1 Sl No.: 18

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