NAMBIAR BUILDERS PRIVATE LIMITED vs. ASSESSMENT UNIT

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WP/12328/2026HC KarnatakaKAHC01027317202602 June 2026Bench: B M SHYAM PRASAD8 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court allowed the petition in part. It quashed the impugned Show Cause Notice, Assessment Order, and Penalty Show Cause Notices. The Court found considerable force in the petitioner's submission that the Show Cause Notice was issued with a significantly curtailed response time, violating the Standard Operating Procedure (SOP) under Section 144B(6)(xi) of the Income Tax Act, 1961, without recording reasons for such curtailment. The Court relied on its previous order in W.P.No.20622/2023, which held that such a lack of opportunity warrants interference. The proceedings were restored, and the petitioner was granted liberty to file a further reply within four weeks from the date the portal enables filing of objections. The assessment was to be completed considering this reply, and the petitioner was precluded from raising the issue of limitation based on the submissions made. The ratio is that a Show Cause Notice providing less than the mandatory seven days for response, without recording reasons for curtailment, is a procedural defect that vitiates the subsequent assessment and penalty proceedings.

What were the facts?

The petitioner, Nambiar Builders Private Limited, filed a writ petition challenging a Show Cause Notice dated 20.02.2026, an Assessment Order dated 26.03.2026 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, and two Penalty Show Cause Notices dated 25.03.2026 and 26.03.2026, all pertaining to Assessment Year 2024-25. The petitioner argued that the Show Cause Notice provided insufficient time for response. The respondents did not dispute the short notice period but contended that the petitioner had participated in the proceedings and should demonstrate prejudice. The High Court referred to a previous order in W.P.No.20622/2023 concerning similar short notice periods.

What were the issues?

1. Whether the Show Cause Notice dated 20.02.2026, issued for Assessment Year 2024-25, is invalid due to providing less than the mandatory seven days for response as stipulated by the SOP under Section 144B(6)(xi) of the Income Tax Act, 1961, without recording reasons for curtailment. (Question of law and fact) Assessee's Contention: The petitioner argued that the Show Cause Notice was defective as it allowed only four days (20.02.2026 to 24.02.2026) to respond, violating the mandatory seven-day period prescribed by the SOP under Section 144B(6)(xi) of the IT Act, unless reasons for curtailment were recorded. They relied on the principle that a defective notice invalidates the entire proceedings. Revenue's Contention: The respondents conceded the short notice period but urged the Court to consider that the petitioner had filed a reply and participated in the assessment proceedings. They argued that interference was unwarranted unless the petitioner demonstrated that their reply was not considered or that they were not afforded a reasonable opportunity.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 272A(1)(d),Section 270A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JUNE, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD

WRIT PETITION NO. 12328 OF 2026 (T-IT)

BETWEEN:

NAMBIAR BUILDERS PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT NO. 60, 2ND FLOOR, P. R. BUSINESS CENTRE, MARATHAHALLI COLONY, BENGALURU 560 037

REP. BY ITS MANAGING DIRECTOR RAMESH NAMBIAR, S/O RAIRU NAMBIAR, AGED ABOUT 53 YEARS, VILLA NO. 49, NAMBIAR BELLEZEA, DOMMASANDRA, CHANDAOURA ROAD, NARAYANAGHATTA VILLAGE, MUTHANALLUR CIRCLE, BENGALURU 560 099. …PETITIONER (BY SRI. HEMANT VENKATRAY PAI., ADVOCATE) AND:

1.

ASSESSMENT UNIT NATIONAL FACELESS ASSESSMENT CENTRE, REP. BY ADDL/JOINT/DEPUTY/

Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, INCOME TAX DEPARTMENT, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI 110 003.

2.

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(1), BMTC BUILDING, 80 FT ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095.

…RESPONDENTS (BY SRI.THIRUMALESH M., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A) QUASHING THE SHOW CAUSE NOTICE DATED 20.02.2026 FOR THE AY 2024-25 BY RESPONDENT NO. 1 BEARING DIN ITBA/AST/F/144(SCN)/2025- 26/1086321439(1), HEREIN ENCLOSED AND MARKED AS ANNEXURE-A; B) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER DATED 26.03.2026 PASSED UNDER SECTION 143(3) R.W.S. 144B OF THE ACT FOR THE AY 2024-25 BY RESPONDENT NO. 1 BEARING DIN ITBA/AST/S/143(3)/2025-26/1087946645(1), HEREIN ENCLOSED AND MARKED AS ANNEXURE-A1; C) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

OF A WRIT OF CERTIORARI QUASHING THE PENALTY SHOW CAUSE NOTICE DATED 25.03.2026 ISSUED UNDER SECTION 272A(1)(d) OF THE ACT FOR THE AY 2024-25 BY RESPONDENT NO. 1 BEARING DIN ITBA/PNL/S/272A(1)(d)/2025-26/1087879760(1), HEREIN MARKED AS ANNEXURE-A2; D) ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE PENALTY SHOW CAUSE NOTICE DATED 26.03.2026 ISSUED UNDER SECTION 270A OF THE ACT FOR THE AY 2024-25 BY RESPONDENT NO. 1 BEARING DIN ITBA/PNL/S/270A/2025-26/1087947103(1), HEREIN MARKED AS ANNEXURE-A3 AND ETC.

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

ORAL ORDER The petitioner, who is in receipt of the Show Cause Notice dated 20.02.2026 and who has not only responded to such notice but also participated in the assessment proceedings, has filed this petition calling in question the Show Cause Notice, Assessment Order and Penalty Show Cause Notices. The

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

impugned Show Cause Notice is dated 20.02.2026 and it is marked as Annexure-A. The Show Cause Notice dated 20.02.2026 is issued calling upon the petitioner to file its response before 2 p.m. of 24.02.2026.

2.

Sri Hemant Venkatray Pai, the learned counsel for the petitioner, while relying upon the date of the Show Cause Notice and time allowed, submits that in terms of the SOP issued under the provisions of Section 144 B (6)(xi) of the Income Tax Act, 1961 [for short, ‘the IT Act’], it is mandatory in law to issue seven days to respond unless time is curtailed recording reasons. The learned counsel emphasizes that the notice being defected the entire proceedings must fail.

3.

Sri M. Thirumalesh, a learned Standing Counsel for the respondents without disputing the date of the Show Cause Notice or that the petitioner was allowed only two days to respond, submits that

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

this Court may consider that the petitioner has not only filed its reply but also participated in the assessment proceedings, and that this Court may not interfere unless the petitioner shows that the reply has not been considered or that it is not extended a reasonable opportunity to file detailed response.

4.

In reply, Sri Hemant Venkatray Pai submits that this Court may refer to the order dated 05.10.2023 in W.P.No.20622/2023 [T-IT] and the inarguable position is that the petitioner did not have a cause until the assessment proceedings were closed. The learned counsel also submits that even interference at this stage would not foreclose the assessment proceedings on the ground of rejection. This Court must indeed refer to the opinion as contained in the order dated 05.10.2023 in W.P.No.20622/2023 which reads as under: “It is undisputed that the petitioner is issued with the Show Cause Notice dated 08.12.2022 allowing time till 17:29 hours of 14.12.2022,

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

and the SOP issued under the provisions of Section 144B[6][xi] of the IT Act contemplates Show Cause Notice with seven days to respond unless such time must be curtailed because of the date for completion of the assessment. It follows from these undisputed facts that the petitioner is issued with the Show Cause Notice allowing six days to file response but without recording reasons for curtailing notwithstanding the fact that the assessment could be completed before 31.12.2022.

This supports the canvass demonstrating lack of opportunity. This Court must also observe that in similar circumstances, this Court has disposed of the writ petition in W.P. No.2816/2023 and connected matters on 09.03.2023 remanding the proceedings to the stage post the concerned Show Cause Notice with liberty to the assessee to file a reply and calling upon the concerned to extend an opportunity as would be permissible in law and to complete the assessment proceedings. The petition must therefore prevail and there must be suitable orders.”

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

5.

This Court finds considerable force in the submissions on behalf of the petitioner in the light of the exposition as aforesaid, and therefore, there must be interference to restore the proceedings with opportunity to the petitioner to file a detailed further response, if any, within two [2] weeks from the date the concerned enables filing of the objections. In the light of the afore, the following: ORDER

The petition is allowed-in-part, and the impugned Show Cause Notice, Assessment Order and Penalty Show Notices as per Annexures-A to A4 are quashed. The petitioner is at liberty to file further reply within four [4] weeks from the date the concerned enables filing of objections in the portal. The assessment shall be completed considering the reply once again and the

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HC-KAR NC: 2026:KHC:25870 WP No. 12328 of 2026

petitioner shall not, in the light of the submissions made, raise question of limitation.

Sd/- (B M SHYAM PRASAD) JUDGE

SA Ct:sr

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