M/S CASTLES VISTA PRIVATE LIMITED vs. THE ASSESSMENT UNIT

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WP/11689/2026HC KarnatakaKAHC01026490202617 April 2026Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the time provided for the petitioner to respond to the show cause notice was indeed less than the 7 days stipulated in Clause N.1.3.1 of the SOP dated 03.08.2022. The Court found that the incomplete reply filed by the petitioner within this insufficient timeframe could not be considered a waiver of their right to adequate time. Consequently, the assessment order (Annexure-A), computation sheet (A1), and related notices (Annexures-A2, B, and D) were set aside. The matter was remitted back to the stage of responding to the show cause notice. The petitioner was granted liberty to file a fresh reply, in addition to the reply already filed (Annexure-N), and to furnish supporting documents for both the existing and the proposed additional reply. All contentions on merits were expressly kept open for adjudication at the appropriate stage. The writ petition was disposed of in light of these directions.

What were the facts?

The petitioner, M/s Castles Vista Private Limited, filed a writ petition challenging an assessment order dated 30.03.2026, passed by the Assessment Unit, National Faceless Assessment Centre, under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2024-25. The petitioner contended that the assessment order was vitiated due to a violation of principles of natural justice. Specifically, the show cause notice (Annexure-M) was issued on 16.03.2026, requiring a response by 22.03.2026, which was less than the 7-day period stipulated in Clause N.1.3.1 of the Standard Operating Procedure (SOP) dated 03.08.2022. The petitioner submitted an incomplete reply on 24.03.2026 due to the insufficient time provided.

What were the issues?

1. Whether the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2024-25 is liable to be quashed on the grounds of violation of principles of natural justice due to insufficient time provided for response to the show cause notice? Assessee's contentions: The petitioner argued that the time provided for responding to the show cause notice (Annexure-M), from 16.03.2026 to 22.03.2026, was less than the mandatory 7 days prescribed by Clause N.1.3.1 of the SOP dated 03.08.2022. The incomplete reply filed within this shortened period should not be construed as a waiver of sufficient time. The petitioner sought an opportunity to file a fresh and complete reply with supporting documents. Revenue's contentions: The judgment does not record any specific contentions made by the respondents (Assessment Unit and Deputy Commissioner of Income-Tax).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2026:KHC:21100 WP No. 11689 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 11689 OF 2026 (T-IT) BETWEEN: 1. M/S CASTLES VISTA PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT C-5, RICH HOMES, NO.5/1, RICHMOND ROAD, RICHMOND TOWN, BANGALORE - 5600 025 PREVIOUSLY AT NO.41, MANTRI HOUSE, VITTAL MALLYA ROAD, BANGALORE - 560 001 REPRESENTED HEREIN BY DEPUTY GENERAL MANAGER MR. RAGHAVENDRA N. RESIDING AT: SY NO. 35/4, FLAT NO.FF 4, VALLABAHA NISHANTH, , UTTARAHALLI HOBLI, VASANTHAPURA BENGALURU - 560 061 … PETITIONER (BY SRI. RAKSHITH B., ADVOCATE FOR SRI SANDEEP HUILGOL., ADVOCATE) Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:21100 WP No. 11689 of 2026 AND: 1. THE ASSESSMENT UNIT NATIONAL FACELESS ASSESSMENT CENTRE INCOME-TAX DEPARTMENT, 2ND FLOOR, JAWAHARLAL NEHRU STADIUM, NEW DELHI - 110 003. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 2(2)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 590 095 … RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE AND SRI DILIP, ADVOCATE) ***

THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO (1) QUASHING THE IMPUGNED ASSESSMENT ORDER DATED 30.03.2026 BEARING DIN NO. ITBA/AST/S/143(3)/2025-26/1088130436(1) PASSED BY THE 1ST RESPONDENT UNDER SECTION 143(3) READ WITH AND 144B OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2024-25 (ANNEXURE A) 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

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HC-KAR NC: 2026:KHC:21100 WP No. 11689 of 2026 ORAL ORDER Petitioner has called in question the validity of the assessment order passed under Section 143(3) of the Income Tax Act for the assessment year 2024-25. Petitioner has sought for certain allied reliefs as well. 2. It is the case of the petitioner that the assessment order is vitiated due to non-adherence to the principles of natural justice insofar as the time provided for making response to the show cause notice under the applicable SOP was not adhered to. It is asserted that Annexure-M which is the show cause notice was issued on 16.03.2026 with response required to be made by 22.03.2026 which is less than the period of 7 days as provided under Clause N.1.3.1 of the applicable SOP dated 03.08.2022. 3. It is further submitted that insofar as the proposed addition is concerned, petitioner had made a reply on 24.03.2026 but the complete reply could not be

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HC-KAR NC: 2026:KHC:21100 WP No. 11689 of 2026 filed due to the time for response being less than 7 days. Accordingly, it is submitted that an opportunity may be given to place the documents to substantiate the reply and make an additional reply as well. A memo is filed before this Court along with Document No. 1 which refers to some of the documents and details that they intend to produce in the proceedings. 4. Taking note of the time provided under Clause N.1.3.1 of the SOP dated 03.08.2022 being 7 days, clearly the time prescribed for response at Annexure-M would fall short of the same. The incomplete reply filed within such time, cannot amount to waiver of sufficient time. 5. Learned counsel for the petitioner would contend that apart from the reply at Annexure-N, petitioner would make a further reply and produce additional documents, apart from those as indicated in the memo filed on 16.04.2026 before this Court.

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HC-KAR NC: 2026:KHC:21100 WP No. 11689 of 2026 6. In light of the same, without entering into the merits of the matter, the order of assessment at Annexure-A, computation sheet at A1 as well as the notices at Annexures-A2, B and D are set aside. The matter is remitted to the stage of reply to the show cause notice. 7. Petitioner is entitled to make out fresh reply in addition to the reply made at Annexure-N, which is stated to be a part of the proceedings and furnish documents in support of the reply to Annexure-N as well as reply that is stated would be filed by way of additional reply. All contentions on merits are kept open. 8. In light of the above, writ petition is disposed of. SD/- (S SUNIL DUTT YADAV) JUDGE VP

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