HAROHALLI SEETHARAMAIAH ASHOKA vs. ASSESSMENT UNIT

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WP/18987/2026HC KarnatakaKAHC01041787202629 July 2026Bench: B M SHYAM PRASAD7 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court allowed the petition in part. The Court quashed the impugned Assessment Order dated 19.12.2025 (Annexure A1), the consequential Computation Sheet (Annexure A2) and Demand Notice (Annexure A3). It also quashed the Penalty Orders dated 15.05.2026 (Annexure B1) and 20.05.2026 (Annexure C1), along with their respective Computation Sheets (Annexures B2 and C2) and Demand Notices (Annexures B3 and C3). Furthermore, the Penalty Notices dated 19.12.2025 (Annexures D1 and D2) were also quashed. The Court's reasoning was based on the undisputed fact that the timelines provided in the notices under Section 142(1) and Section 144 were shorter than those mandated by the CBDT's SOP. The Court granted liberty to the petitioner to file a response to the Show Cause Notice dated 28.07.2025 (Annexure E1). The principle established is that procedural fairness, including adherence to timelines prescribed by administrative instructions like SOPs, is crucial, and deviations can lead to the quashing of consequential orders. The Court's interference was limited to the procedural aspect, allowing the petitioner to present their case.

What were the facts?

The petitioner, Harohalli Seetharamaiah Ashoka, filed a writ petition before the High Court of Karnataka challenging various orders and notices issued by the Income Tax Department. These included an assessment order dated 19.12.2025 under Section 144 read with Section 144B, consequential computation and demand notices, penalty orders dated 15.05.2026 and 20.05.2026 under Sections 272A(1)(d) and 271AAC(1) respectively, and penalty notices dated 19.12.2025 under Section 274. The petitioner also challenged notices issued under Section 142(1) dated 28.07.2025 and 10.11.2025, and show cause notices dated 19.11.2025 and 09.12.2025. The core of the petitioner's argument was a procedural deficiency concerning the timelines provided for responding to these notices.

What were the issues?

1. Whether the notice issued under Section 142(1) dated 28.07.2025, providing a reply period of 11.08.2025, is in breach of the Standard Operating Procedure (SOP) issued by the CBDT on 03.08.2022, which mandates a minimum of 15 days? 2. Whether the subsequent notices under Section 142(1) and Section 144, dated 10.11.2025 and 19.11.2025 respectively, also violate the SOP by not allowing a minimum of seven days for a reply? Assessee's Contentions: The petitioner's counsel argued that the notice under Section 142(1) dated 28.07.2025 provided an insufficient reply period, falling short of the 15 days stipulated in the CBDT's SOP dated 03.08.2022. Similar breaches were alleged for notices dated 10.11.2025 and 19.11.2025, where the minimum seven-day period was not adhered to. The petitioner sought an opportunity to file a reply to these notices. Revenue's Contentions: The learned Standing Counsel for the respondents did not dispute the timelines stipulated in the SOP or the alleged breach thereof.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B,Section 156,Section 272A(1)(d),Section 271AAC(1),Section 274,Section 142(1),Section 143(2)

AI-generated summary — verify with the full judgment below

HC-KAR 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. 18987 OF 2026 (T-IT)

BETWEEN:

HAROHALLI SEETHARAMAIAH ASHOKA S/O KM SEETHARAMAIAH, AGED ABOUT 54 YEARS, NEAR KUMBARA COLONY BUS STOP, OPP SUBHUM STORE, KUMBARA COLONY, HAROHALLI TOWN, RAMANAGARA, RAMANAGAR 562112.

…PETITIONER (BY 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 VANAMALA N Location: HIGH COURT OF KARNATAKA HC-KAR

2.

THE INCOME-TAX OFFICER, WARD 1(2)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE 560095.

…RESPONDENTS (BY SRI.Y.V. RAVIRAJ., ADVOCATE A/W SRI. M. DILIP., ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO I) QUASHING THE ASSESSMENT ORDER PASSED BY THE RESPONDENT NO. 1 UNDER SECTION 144 RWS 144B OF THE INCOME TAX ACT, DATED 19/12/2025 BEARING DIN NO. ENCLOSED AND ITBA/AST/S/144/2025-26/1083882829(1) MARKED AS ANNEXURE A1; II) QUASHING THE COMPUTATION SHEET DATED 19/12/2025 BEARING DIN AND DOCUMENT NO. ITBA/AST/S/324/2025- 26/1083882901(1) ISSUED BY THE RESPONDENT NO. 1 ENCLOSED AND MARKED AS ANNEXURE A2; III) QUASHING THE DEMAND NOTICE DATED 19/12/2025 U/S 156 BEARING DIN AND NOTICE NO. ITBA/AST/S/156/2025-26/1083882856(1), ISSUED BY THE RESPONDENT NO. 1, ENCLOSED AND MARKED AS ANNEXURE A3; IV) QUASHING THE PENALTY ORDER PASSED U/S 272A(1)(D) DATED 15/05/2026 BEARING DIN NO.ITBA/PNL/F/272A(1)(D)/2026- 27/1089033356(1), BY THE RESPONDENT NO.1, HC-KAR ENCLOSED AND MARKED AS ANNEXURE B1; V) QUASHING THE COMPUTATION SHEET DATED 15/05/2026 BEARING DIN AND ORDER NO. ITBA/PNL/S/272A(1)(D)/2025-26/1083872489(1) ISSUED BY THE RESPONDENT NO. 1 ENCLOSED AND MARKED AS ANNEXURE B2; VI) QUASHING THE DEMAND NOTICE DATED 15/05/2026 ISSUED U/S 156 BEARING AND DIN NOTICE NO. ITBA/PNL/S/156/2026- 27/1089029498(1), ISSUED BY THE RESPONDENT NO. 1, ENCLOSED AND MARKED AS ANNEXURE B3; VII) QUASHING THE PENALTY ORDER PASSED U/S 271AAC(1) DATED 20/05/2026 BEARING DIN NO.ITBA/PNL/F/271AAC(1)/2026-27/1089112439(1) BY RESPONDENT NO.1, ENCLOSED AS MARKED AS ANNEXURE C1; VIII) QUASHING THE COMPUTATION SHEET DATED 20/05/2026 BEARING DIN AND DOCUMENT NO. ITBA/PNL/S/271AAC(1)/2025- 26/1083882945(1) ISSUED BY THE RESPONDENT NO. 1 ENCLOSED AND MARKED AS ANNEXURE C2; IX) WRIT ISSUED 156 U/S BEARING NO. OF CERTIORARI QUASHING THE DEMAND NOTICE DATED 20/05/2026 NOTICE AND DIN ITBA/PNL/S/156/2026- 27/1089111987(1), ISSUED BY THE RESPONDENT NO. 1, ENCLOSED AND MARKED AS ANNEXURE C3; X) QUASHING THE PENALTY NOTICE ISSUED U/S 274 R.W.S DATED 19/12/2025 BEARING 272A(1)(D) DIN NO.ITBA/PNL/S/272A(1) (D)/2025-26/1083872489(1), BY THE RESPONDENT NO. 1, ENCLOSED AND MARKED HC-KAR AS ANNEXURE D1; XI) QUASHING THE PENALTY NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 AAC (1) DATED 19/12/2025 BEARING DIN NO. ITBA/PNL/S/271 AAC (1)/2025-26/1083882945(1), BY THE RESPONDENT NO. 1, ENCLOSED AND MARKED AS ANNEXURE D2 AND ETC.

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

ORAL ORDER

The petitioner has called in question the following orders/Notices.

Notices/Orders Date Provisions of Income Tax Act, 1961 Annexures Assessment Order 19.12.2025 144 r/w/s 144B A1 Computation Sheet 19.12.2025

A2 Demand Notice 19.12.2025 156 A3 Penalty Order 15.05.2026 272A(1)(d) B1 Computation Sheet 15.05.2026

B2 Demand Notice 15.05.2026 156 B3 Penalty Order 20.05.2026 271AAC(1) C1 Computation Sheet 20.05.2026

C2 Demand Notice 20.05.2026 156 C3 Penalty Notice 19.12.2025 274 r/w/s D1 HC-KAR 272A(1)(d)

Penalty Notice 19.12.2025 274 r/w/s/ 271AAC(1) D2 Notice 28.07.2025 142(1) E1 Notice 10.11.2025 142(1) E2 Show Cause Notice 19.11.2025 144 F1 Show Cause Notice 09.12.2025

F2 Notice 23.06.2025 143(2) G

Sri. S. Annamalai, the learned Counsel for the petitioner, submits that the petitioner has raised multiple grounds but confines this petition to an opportunity to file a reply to the Notice issued under Section 142[1] dated 28.07.2025 with this Court quashing the Assessment Order dated 19.12.2025 and the consequential Computation and Demand Notices for penalty.

Sri. S. Annamalai, relying upon the Standard Operating Procedure [SOP], submits that the Notice under Section 142[1) dated 28.07.2025 [Annexure-E1] is issued extending an opportunity to the petitioner to file a reply by 11.08.2025, which is HC-KAR short of time of the period [15 days] contemplated under the SOP issued by the CBDT dated 03.08.2022 and that if the petitioner is extended another opportunity, he will file documents to show cause against the propositions. The learned counsel also submits identical reasons as regards the subsequent Notices under Section 142(1) and Section 144 which are dated 10.11.2025 and 19.11.2025 relying on the same SOP asserting that the petitioner is not allowed the minimum of seven [7] days. Sri. M. Dilip, a learned Standing Counsel for the respondents is heard, and the learned Standing Counsel does not dispute the stipulation on the timeline in the SOP or the breach thereof. Therefore, there must be limited interference, and hence, the following; ORDER The petition is allowed in-part. The following impugned Orders/Notices are quashed with liberty to the petitioner to HC-KAR file response to the Show Cause Notice dated 28.07.2025 [Annexure-E1] Notices/ Orders Date Provisions of Income Tax Act, 1961 Annexures Assessment Order 19.12.2025 144 r/w/s 144B A1 Computation Sheet 19.12.2025

A2 Demand Notice 19.12.2025 156 A3 Penalty Order 15.05.2026 272A(1)(d) B1 Computation Sheet 15.05.2026

B2 Demand Notice 15.05.2026 156 B3 Penalty Order 20.05.2026 271AAC(1) C1 Computation Sheet 20.05.2026

C2 Demand Notice 20.05.2026 156 C3 Penalty Notice 19.12.2025 274 r/w/s 272A(1)(d)

D1 Penalty Notice 19.12.2025 274 r/w/s/ 271AAC(1) D2 Notice 10.11.2025 142(1) E2 Show Cause Notice 19.11.2025 144 F1 Show Cause Notice 09.12.2025

F2 Notice 23.06.2025 143(2) G

NV SD/- (B M SHYAM PRASAD) JUDGE

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