CHIKKARAMAIAH BABU REDDY vs. ASSESSMENT UNIT

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WP/11060/2026HC KarnatakaKAHC01025255202609 April 2026Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the contention regarding the insufficient time provided in the notice under Section 142(1) was intertwined with the principle of natural justice, which mandates sufficient time for a party to make out a reply. The Court noted that the time stipulated in the notice at Annexure-B1 fell short by one day of the statutory time limit prescribed by the SOP. Consequently, the Court found it appropriate to set aside the assessment order and remit the matter back to the stage of the reply to the notice under Section 142(1). The assessment order, computation sheet, demand notice, penalty notices, and notices under Section 142(1) and show cause notices were all set aside. The petitioner was directed to appear before the respondent on 13.05.2026.

What were the facts?

The petitioner, Chikkaramaiah Babu Reddy, filed a writ petition challenging an assessment order dated 18/03/2026 passed by the Assessment Unit (Respondent No. 1) under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The petitioner also challenged ancillary proceedings including penalty notices. The core of the petitioner's argument was that the notice under Section 142(1) of the Act, issued on 01.08.2025, required a response by 15.08.2025. The petitioner contended that this stipulated time fell short by one day of the 15-day period prescribed by Clause D.2.1.1 of the SOP dated 03.08.2022 for initial notices.

What were the issues?

1. Whether the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is liable to be quashed on the ground that the notice under Section 142(1) provided insufficient time for response, thereby violating principles of natural justice? Assessee's Contentions: The assessee argued that the notice under Section 142(1) dated 01.08.2025, requiring a response by 15.08.2025, did not provide the mandatory 15 days as per Clause D.2.1.1 of the SOP dated 03.08.2022. This shortfall of one day violated the principles of natural justice by not affording sufficient time to prepare a reply. Revenue's Contentions: The revenue, through its counsel, pointed out that the petitioner had not made out a response to earlier notices and relied on paragraph 2 of the assessment order. The revenue did not explicitly address the contention regarding the shortfall in the notice period.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 142(1)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2026:KHC:19889 WP No. 11060 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 11060 OF 2026 (T-IT) BETWEEN: 1. CHIKKARAMAIAH BABU REDDY S/O SRI. CHIKKARAMAIAH REDDY, AGED ABOUT 55 YEARS, NO.74, TEACHERS COLONY, 1ST CROSS, 4TH MAIN, KORAMANGALA, BANGALORE - 560 074. PAN: AJBPC4806A. … PETITIONER (BY MS. BHUMIKA, ADVOCATE A/W SRI VENKATESH K. PANI, ADVOCATE FOR SRI ANNAMALAI S., ADVOCATE) AND: 1. ASSESSMENT UNIT INCOME TAX DEPARTMENT, REP. 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-110 003. Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:19889 WP No. 11060 of 2026 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 3(1)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560 095. … RESPONDENTS (BY SRI. M. THIRUMALESH., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO I. ISSUE A WRIT OF CERTIORARL OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER DATED 18/03/2026 PASSED BY THE RESPONDENT NO. 1 U/S 143(3) RWS 144B OF THE ACT, BEARING DIN: ITBA/AST/S/143(3)/2025-26/1087556503(1), ENCLOSED AND MARKED AS ANNEXURE - A1 AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER

Sri. M. Thirumalesh, learned counsel accepts notice for respondents. 2. Petitioner has assailed the validity of the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (for short 'the

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HC-KAR NC: 2026:KHC:19889 WP No. 11060 of 2026 Act') at Annexure-A1. Petitioner has also challenged the ancillary proceedings including penalty notices. 3. It is the case of the petitioner that the notice under Section 142(1) of the Act was issued on 01.08.2025 and a response was directed to be furnished by 15.08.2025. It is submitted that in terms of the applicable SOP, the time that ought to be afforded as regards initial notice is, 15 days from the date of final generation of notice as per Clause D.2.1.1 of the SOP dated 03.08.2022, which would be the time for response. The time stipulated in the notice under Section 142 at Annexure-B1 falls short by one day. 4. Taking note of the said contention which also is intertwined with the contention that sufficient time be given to make out reply which is a part of principles of natural justice, it would be appropriate to set aside the order and remit the matter back to the stage of reply to the notice under Section 142(1) of the Act.

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HC-KAR NC: 2026:KHC:19889 WP No. 11060 of 2026 5. Learned counsel appearing for the revenue no doubt has pointed out that petitioner has not made out response to the earlier notices and relies on para-2 of the assessment order at Annexure-A1. 6. However taking note that the time granted in the notice at Annexure-B1 falls short of the statutory time limit, it would be appropriate to set aside the order and remit the matter for fresh consideration. 7. Accordingly, the assessment order at Annexure- A1, Computation Sheet at Annexure-A2, Demand Notice at Annexure-A3, Penalty Notices at Annexures-A4 to A6, notices under Section 142(1) of the Act at Annexures-B1 to B4 and the show cause notices at Annexures-C1 to C3 are set aside. The matter is remitted to the stage of reply to the notice under Section 142(1) of the Act. 8. Petitioner to appear before respondent No.2 without further notice on 13.05.2026.

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HC-KAR NC: 2026:KHC:19889 WP No. 11060 of 2026 9. Accordingly, petition is disposed of. SD/- (S SUNIL DUTT YADAV) JUDGE VP

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