SMT POORNIMA W/O SHRINIVAS NAIDU vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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WP/103254/2022HC KarnatakaKAHC02011605202204 April 2025Bench: JYOTI MULIMANI3 pages
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What did the High Court hold?

The High Court held that the issuance of the Section 148A(b) notice and the subsequent order under Section 148A(d) were unsustainable in law. The reasoning was based on the fact that the reassessment order for the assessment year 2018-19 was passed on 21.03.2022, which was prior to the Supreme Court's decision in the Ashish Agarwal case on 04.05.2022. The Court found that the procedures outlined in Section 148A were not applicable or were improperly applied in this context. Consequently, the Court quashed the order dated 26.07.2022 passed under Section 148A(d) and the notice dated 26.07.2022 issued under Section 148. The ratio decidendi is that reassessment proceedings initiated prior to the Ashish Agarwal judgment, which were already finalized, cannot be reopened or subjected to the Section 148A procedure retrospectively if the original reassessment order was passed before the Apex Court's ruling.

What were the facts?

The petitioner, Smt. Poornima, filed a Writ Petition challenging an order dated 26.07.2022 and a notice dated 26.07.2022, both passed by the Assistant Commissioner of Income Tax, Central Circle, Hubli. The assessment year in question is 2018-19. A notice under Section 148 of the Income Tax Act, 1961, was initially issued to the petitioner on 30.06.2021, leading to a reassessment order on 21.03.2022. Subsequently, following the Supreme Court's decision in Ashish Agarwal's case, the Revenue issued a notice under Section 148A(b) on 26.05.2022, followed by an order under Section 148A(d) on 26.07.2022, and then a fresh Section 148 notice. The petitioner approached the High Court of Karnataka, Dharwad Bench, under Articles 226 and 227 of the Constitution of India.

What were the issues?

1. Whether the order passed under Section 148A(d) and the notice issued under Section 148 are sustainable in law, given that the reassessment order for assessment year 2018-19 was passed on 21.03.2022, prior to the Apex Court's decision in Ashish Agarwal's case (dated 04.05.2022)? Assessee's Contention: The petitioner argued that the proceedings initiated under Section 148A and the subsequent Section 148 notice were unsustainable because the original reassessment order was passed before the pronouncement of the Ashish Agarwal judgment, which laid down specific procedures for reassessment proceedings initiated after a certain date. The petitioner contended that the issuance of Section 148A(b) notice and the order under Section 148A(d) were therefore vitiated. Revenue's Contention: The judgment does not record any specific contentions made by the respondent Revenue. However, the context implies the Revenue was attempting to regularize reassessment proceedings in light of the Ashish Agarwal judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC-D:6013 WP No. 103254 of 2022

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 4TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 103254 OF 2022 (T-IT) BETWEEN:

SMT. POORNIMA W/O SHRINIVAS NAIDU, AGE: 39 YEARS, OCC: BUSINESS AND AGRICULTURE, R/O: 1ST FLOOR, DESAI CMPLEX, GANDHI NAGAR CROSS, DHARWAD. … PETITIONER (BY SRI. SANGRAM S. KULKARNI, ADVOCATE)

AND:

THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, HUBLI, C.R. BUILDING, NAVANAGAR, HUBBALLI-580 025. … RESPONDENT (BY SRI. M. THIRUMALESH AND SMT. ROOPA ANAVEKAR, ADVOCATES)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

THIS WRIT PETITION IS LISTED FOR HEARING- INTERLOCUTORY APPLICATION, THIS DAY, AN ORDER IS MADE AS UNDER:

Digitally signed by PREMCHANDRA M R Location: HIGH COURT OF KARNATAKA

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NC: 2025:KHC-D:6013 WP No. 103254 of 2022

ORAL ORDER

Sri.Sangram S.Kulkarni., counsel for the petitioner and Sri.M.Thirumalesh., counsel for the respondent have appeared in person.

2.

The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the order dated 26.07.2022 vide Annexure- D passed by the respondent and the notice dated 26.07.2022 issued vide Annexure-E by the respondent. 3. The notice was issued under Section 148 of the Income Tax Act, 1961 to the petitioner - Smt.Poornima for the assessment year 2018-19 on 30.06.2021. The reassessment order was made on 21.03.2022. Taking note of the Ashish Agarwal’s case, the Department issued notice under Section 148A(b) to the petitioner on 26.05.2022. Thereafter, Section 148A(d) order was passed on 26.07.2022. Subsequently, 148 notice was issued to the petitioner. Under these circumstances, the petitioner is before this Court. 4. Counsel for the respective parties urged several contentions. Heard the arguments and perused the Writ papers with care.

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NC: 2025:KHC-D:6013 WP No. 103254 of 2022

5.

Suffice it to note that the Apex Court disposed of Ashish Agarwal’s case on 04.05.2022. It is significant to note that pursuant to Section 148 notice, the reassessment order was passed on 21.03.2022 i.e., prior to Ashish Agarwal’s case. Hence, issuance of Section 148A(b) notice and order under Section 148A(d) are unsustainable in law. Therefore, this Court deems is appropriate to quash 148A(d) order and Section 148 notice. 6. The Writ of Certiorari is ordered. The order dated:26.07.2022 passed by the respondent vide Annexure-D and the notice dated:26.07.2022 issued by the respondent vide Annexure-E are quashed. 7. Resultantly, the Writ Petition is allowed. Because of the disposal of the Writ Petition, all pending interlocutory applications if any are disposed of and the interim order if any granted by this Court stands discharged.

Sd/- (JYOTI MULIMANI) JUDGE

MRP/RH LIST NO.: 1 SL NO.: 31.1

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