PUNE DYNASTY PROJECTS PRIVATE LIMITED vs. CENTRAL BOARD OF DIRECT TAXES

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WP/19196/2022HC KarnatakaKAHC01044473202208 September 2025Bench: M.NAGAPRASANNA4 pages
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What did the High Court hold?

The High Court of Karnataka held that the impugned show cause notices issued by the jurisdictional Assessing Officer outside the scope of Section 151A of the Act were obliterated. Consequently, all further proceedings initiated based on these notices, as challenged in the petition, were quashed. The Court reserved liberty for the revenue to revive the petition if the Apex Court were to hold in favour of the revenue in a pending matter. The petition was allowed to the extent of the quashing of the notices and proceedings. Contentions of both parties, except those addressed by the order, were left open to be considered if revival of the petition became necessary. The ratio decidendi is that notices issued under Section 148A and Section 148, when found to be outside the prescribed legal framework or in contravention of binding judicial pronouncements (like the Supreme Court's order of 04.05.2022), are liable to be quashed. The operative direction was to quash the notices and proceedings, with liberty to the revenue to revive.

What were the facts?

The petitioner, Pune Dynasty Projects Private Limited, filed a writ petition before the High Court of Karnataka challenging notices and orders issued by the Deputy Commissioner of Income Tax (Respondent No. 2) for Assessment Year 2014-15. The challenge was to a notice under Section 148A(b) dated 26.05.2022, an order under Section 148A(d) dated 26.07.2022, and a notice under Section 148 dated 26.07.2022. The petitioner also sought to quash an instruction dated 11.05.2022 issued by the Central Board of Direct Taxes (Respondent No. 1) to the extent it allowed proceedings for AY 2014-15 under Section 148A and Section 148 without regard to the proviso to Section 149(1)(b), especially after the Supreme Court's order dated 04.05.2022. The Court noted that the grounds raised were identical to those considered in a previous writ petition.

What were the issues?

1. Whether the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated 26.05.2022, for Assessment Year 2014-15, is liable to be quashed. (Question of law) 2. Whether the order passed under Section 148A(d) of the Act dated 26.07.2022, for Assessment Year 2014-15, is liable to be quashed. (Question of law) 3. Whether the notice issued under Section 148 of the Act dated 26.07.2022, for Assessment Year 2014-15, is liable to be quashed. (Question of law) 4. Whether the Instruction No. 1/2022 dated 11.05.2022 issued by the Central Board of Direct Taxes is liable to be quashed to the extent it permits issuance of notices under Section 148 for AY 2014-15 without regard to the conditions in the first proviso to Section 149(1)(b) of the Act, particularly after the Supreme Court's order dated 04.05.2022. (Question of mixed law and fact) Assessee's Contention: The petitioner argued that the impugned notices and order were issued without regard to the jurisdictional conditions stipulated in the first proviso to Section 149(1)(b) of the Act, especially in light of the Supreme Court's order dated 04.05.2022, and that the CBDT instruction was contrary to this. The petitioner relied on the Supreme Court's order dated 04.05.2022. Revenue's Contention: The judgment does not record specific contentions for the revenue, other than their representation by counsel.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 149(1)(b),Section 151A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:38155 WP No. 19196 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 19196 OF 2022 (T-IT) BETWEEN:

PUNE DYNASTY PROJECTS PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 REPRESENTED BY ITS DIRECTOR VASUNDHARA HARSHAVARDHAN AGED ABOUT 63 YEARS DAUGHTER OF G SANTHANAM 1ST FLOOR EMBASSY POINT 150, INFANTRY ROOAD, BENGALURU- 560001.

…PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE)

AND:

1.

CENTRAL BOARD OF DIRECT TAXES THROUGH THE CHAIRPERSON DEPARTMENT OF REVENUE MINISTRY OF FINANCE NORTH BLOCK NEW DELHI-110002.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -1(3) BENGALURU 3RD FLOR CENTRAL REVENUE BUILDING QUEENS ROAD BENGALURU-560001.

3.

THE DIRECTOR GENERAL INCOME TAX (INV.) CENTRAL REVENUE BUILDING QUEENS ROAD

Digitally signed by NAGAVENI Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:38155 WP No. 19196 of 2022

BENGALURU-560001. …RESPONDENTS (BY SRI. M.DILIP., ADVOCATE)

THIS W.P FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE ISSUED UNDER SECTION 148A(b) OF THE ACT DTD.26.5.2022 OF THE ACT FOR THE ASSESSMENT YEAR 2014-15 BY THE R-2 BEARING DIN AND LETTER NO. ITBA/COM/F/17/2022- 23/1043198627(1) HEREIN MARKED AS ANNEXURE-A1., AND ETC.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA

ORAL ORDER The petitioner is before this Court seeking the following prayer: "i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice Issued under section 148A(b) of the Act dated 26.05.2022 of the Act for the assessment year 2014-15 by the Respondent No.2 bearing DIN & Letter No. ITBA/COM/F/17/2022-23/1043198627(1) herein marked as Annexure - A1. ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order dated 26.07.2022 passed under section 148A(d) of the Act for the assessment year 2014-15 by the Respondent No.2 bearing DIN & Order No. ITBA/COM/F/17/2022-23/1044124124(1) herein marked as Annexure - A2.

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HC-KAR NC: 2025:KHC:38155 WP No. 19196 of 2022

iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice dated 26.07.2022 issued under section 148 of the Act for the assessment year 2014-15 by the Respondent No.2 bearing DIN & Notice No.ITBA/AST/M/148_1/2022-23/1044126214(1) marked as Annexure - A3. iv) Quashing the Impugned Instruction bearing No.1/2022 dated 11.05.2022 Issued by the Respondent No.1 (Annexure-B) to the extent that the same purports to clarify that the proceedings pursued under Section 148A and the notice issued under Section 148 after the Hon'ble Supreme Court's order dated 04.05.2022, the notice can be issued for the assessment year 2014-15 and quashing the consequent direction therein to issue fresh notices under Section 148 of the Act for AY 2014-15 without having regard to the jurisdictional conditions set out in the first proviso to Section 149(1)(b) of the Act. v) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity."

2.

Heard Sri Annamalai S., learned counsel for the petitioner and Sri M. Dilip, learned counsel for the respondents. 3. The grounds projected in the subject petition in support of the prayer quoted supra are identical to the ones considered by this Court in W.P.No.28182/2024 and connected matters, disposed on 28.08.2025.

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HC-KAR NC: 2025:KHC:38155 WP No. 19196 of 2022

4.

In the light of the issue being similar and the reasons rendered therein becomes applicable to the case at hand, the petition deserves to be disposed on the same lines. Therefore, I pass the following: ORDER (i) The impugned show cause notices issued by the jurisdictional Assessing Officer outside the scope of Section 151A of the Act stand obliterated. All further proceedings initiated thereto, challenged in this petition would stand quashed. (ii) Liberty is reserved to the respondents - revenue to revive the petition in the event, the Apex Court would hold in favour of the Revenue in the matter pending before it.

(iii) With the aforesaid liberty and to the aforesaid extent, the petition is allowed.

(iv) Contentions of both the parties except the one noted hereinabove, shall remain open to be considered in the event revival of this petition would become necessary. Sd/- (M.NAGAPRASANNA) JUDGE

BSV/List No.: 1 Sl No.: 206

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