C NARAYANASWAMY AND BROS (HUF) vs. UNION OF INDIA

HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 22464 OF 2026 (T-IT) BETWEEN:

C NARAYANASWAMY AND BROS (HUF) REPRESENTED BY MR. NARAYANASWAMY, KARTA OF ERSTWHILE HINDU UNDIVIDED FAMILY (HUF) WHO IS REPRESENTED BY KOUSHAL, SPECIAL POWER OF ATTORNEY HOLDER FOR MR. NARAYANASWAMY, AGED ABOUT 36 YEARS ILTHORE VILLAGE, HEGGANAHALLY POST DEVANAHALLY TALUK, BANGALORE RURAL DISTRICT - 562110, KARNATAKA PAN AACHC9914 …PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE) AND:

Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA HC-KAR

HC-KAR THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO HOLD THAT THE SECTION 147A OF THE ACT IN ANNEXURE

IS ILLEGAL, ARBITRARY, UNREASONABLE, VOID, UNFAIR AND VIOLATIVE OF ARTICLES 14 OF CONSTITUTION AND ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT OR ORDER OR DIRECTION AND QUASH THE SECTION 147A OF THE ACT AT ANNEXURE A; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE DATED 31.07.2025 UNDER SECTION 142(1) OF THE ACT ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/F/142(1)/2025-26/1079140047(1) SAME IS ENCLOSED AND MARKED AS ANNEXURE B1; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE DATED 27.08.2025 UNDER SECTION 142(1) OF THE ACT ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. AND THE ITBA/AST/F/142(1)/2025-26/1080063936(1) SAME IS ENCLOSED AND MARKED AS ANNEXURE B2; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE DATED 02.01.2026 UNDER SECTION 142(1) OF THE ACT ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/F/142(1)/202526/1084361264(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B3; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE SHOW CAUSE NOTICE DATED 28.01.2026 ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR HC-KAR 2020-21 BEARING DIN NO. ITBA/AST/F/147(SCN)/2025-26/1085203723(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B4; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ASSESSMENT ORDER DATED 20.02.2026 UNDER SECTION 147 READ WITH SECTION 144 READ WITH SECTION 144B OF THE ACT PASSED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/S/147/2025-26/1086304818(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B5 .ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE COMPUTATION SHEET DATED 20.02.2026 ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO.ITBA/AST/S/330/2025- 26/1086306717(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B6; VIII. ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE DEMAND NOTICE UNDER SECTION 156 OF THE ACT DATED 20.02.2026 ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/S/156/202526/1086307025(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B7; IX. ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE SHOW CAUSE NOTICE DATED 20.02.2026 UNDER SECTION 274 READ WITH SECTION 272A(1)(D) OF THE ACT ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/PNL/S/272A(1)(D)/2025-26/1086274840(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B8; ISSUE A WRIT OF CERTIORARI OR HC-KAR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE SHOW CAUSE NOTICE DATED 20.02.2026 UNDER SECTION 274 READ WITH SECTION 271AA(1) OF THE ACT ISSUED BY THE RESPONDENT NO.4 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/PNL/S/271AA(1)/2025-26/1086313578(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE B9 .ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE DATED 29.03.2024 UNDERSECTION 148A(B) OF THE ACT ISSUED BY THE RESPONDENT NO.3 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/F/148A(SCN)/2023-24/1063589650(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE C1; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER DATED 13.04.2024 UNDER SECTION 148A(D) OF THE ACT PASSED BY THE RESPONDENT NO.3 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/F/148A/2024-25/1064078569(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE C2; ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE NOTICE DATED 13.04.2024 UNDER SECTION 148 OF THE ACT ISSUED BY THE RESPONDENT NO.3 FOR THE ASSESSMENT YEAR 2020-21 BEARING DIN NO. ITBA/AST/S/148_1/2024-25/1064078610(1) AND THE SAME IS ENCLOSED AND MARKED AS ANNEXURE C3.

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

HC-KAR CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD

ORAL ORDER

The petitioner, while calling in question the vires of Section 147A of the Income Tax Act, 1961 [for short, 'the IT Act'], has called in question the Notices issued under Section 142(1) of the IT Act and the conclusion of the proceedings resulting in the Reassessment Order dated 20.02.2026 and the further Demand and Penalty Notices under Section 156 and Section 274 read with Section 272A(1)(d) and 271AA(1) of the IT Act. The details of the impugned Notices and the Orders are as follows.

Sl. No.

Notices/ Orders/ computation sheet

Date Provisions of Income Tax Act, 1961

Annexures 1 Notice 31.07.2025 142(1) B1 2 Notice 27.08.2025 142(1) B2 3 Notice 02.01.2026 142(1) B3 4 Notice 28.01.2026 --- B4 5 Reassessment Order 20.02.2026 147 r.w.s 144 r.w.s 144B B5 6 Computation Sheet 20.02.2026 ---- B6 7 Notice 20.02.2026 156 B7 8 Notice 20.02.2026 274 r.w.s. 272A(1)(d) B8 9 Notice 20.02.2026 274 r.w.s B9 HC-KAR 271AA(1) 10 Notice 29.03.2024 148A(b) C1 11 Order 13.04.2024 148A(d) C2 12 Notice 13.04.2024 148 C3

2 Mr. S. Annamalai, the learned counsel for the petitioner, is categorical in stating that the petitioner will not pursue the grievance with Section 147A of the IT Act and that this Court could consider restoring the proceedings interfering with the impugned Reassessment Order and the later proceedings on the short ground of lack of due opportunity. In this regard, the learned counsel submits that the petitioner is issued with the Show Cause Notice on 28.01.2026 with opportunity to the petitioner to file response by 03.02.2026 [less than seven days] when the Standard Operating Procedure [SOP] contemplates a minimum period of seven days.

3 Mr. M. Dilip, a learned Standing counsel who accepts notice for the second to fifth respondent, and Mr. Nirmal Mathew, the learned Standing HC-KAR Counsel who accepts notice for the first respondent, are heard for disposal of the petition. The learned Standing counsels submit that this Court could consider restoring the proceedings with opportunity to the petitioner to file reply to the Show Cause Notice if the petitioner does not pursue the grievance as against the constitutionality of Section 147A of the IT Act.

4 On the petitioner's grievance with the aforesaid Show Cause Notice, Mr. M. Dilip and Mr. Nirmal Mathew cannot dispute that the SOP prescribes a minimum period of seven days and the petitioner is only extended six days when the date of notice is excluded. It is in these circumstances that this Court is persuaded to interfere to set aside the Reassessment Order dated 20.02.2026 [Annexure - B5] and the subsequent proceedings. Hence, the following.

HC-KAR ORDER [A] The petition is allowed-in-part and the following are quashed restoring the proceedings to the Income Tax Officer, Office of the Income Tax Officer [the third respondent] reserving liberty to the petitioner to file response and the documents to the Show Cause Notice on 28.01.2026 [Annexure-B4].

Sl. No.

Notices/ Orders/ computation sheet

Date Provisions of Income Tax Act, 1961

Annex ures 1 Reassessment Order 20.02.2026 147 r.w.s 144 r.w.s 144B B5 2 Computation Sheet 20.02.2026 ---- B6 3 Notice 20.02.2026 156 B7 4 Notice 20.02.2026 274 r.w.s. 272A(1)(d) B8 5 Notice 20.02.2026 274 r.w.s 271AA(1) B9

[B] The petitioner shall, without further notice appear before the third respondent on 05.10.2026 HC-KAR [C] The petitioner is reserved with liberty as and when enabled pursuant to this order, to file response to the Show Cause Notice dated 28.01.2026.

[D] It is needless to observe that all questions except insofar as the petitioner's grievance with regard to Section 147A of the IT Act are left open for consideration.

Sd/- (B M SHYAM PRASAD) JUDGE