SMT. ASHWINI ANANTHA RAO vs. INCOME TAX OFFICER

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WP/31264/2026HC KarnatakaKAHC01068126202607 October 2026Bench: B M SHYAM PRASAD6 pages
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What did the High Court hold?

The High Court allowed the writ petition and quashed the assessment order dated 23.03.2023 (under Section 147 read with Section 144), the penalty order dated 24.08.2023 (under Section 271(1)(b)), and the penalty order dated 14.09.2023 (under Section 271(1)(c)). The Court found both grounds raised by the petitioner to be formidable. Firstly, it noted the Revenue's concession before the Apex Court in 'Union of India and Others v. Rajeev Bansal' that for Assessment Year 2015-16, notices under Section 148A of the IT Act had to be issued before 01.04.2021, and proceedings initiated thereafter would not be sustained. Secondly, the Court observed that the notice under Section 148A(b) was issued on 23.03.2022, allowing the petitioner only until 27.03.2022 to respond, which was a period of four days, falling short of the statutory minimum of seven days. The Court held that the petitioner was entitled to succeed on both these grounds.

What were the facts?

The petitioner, Smt. Ashwini Anantha Rao, filed a writ petition challenging assessment and penalty orders for Assessment Year 2015-16. The assessment order, dated 23.03.2023, was passed by the Income Tax Officer under Section 147 read with Section 144 of the Income Tax Act, 1961, treating cash deposits of Rs. 56,39,000/- as unexplained money under Section 69A and adding interest income of Rs. 7,040/-, determining total income at Rs. 56,46,040/-. The penalty orders challenged were under Section 271(1)(b) dated 24.08.2023 and Section 271(1)(c) dated 14.09.2023. The petitioner's grievance stemmed from the initiation of reassessment proceedings, including the issuance of a notice under Section 148A(b) on 23.03.2022.

What were the issues?

1. Whether the reassessment proceedings initiated for Assessment Year 2015-16 are sustainable when the notice under Section 148A of the Income Tax Act, 1961, was issued after 01.04.2021, contrary to the concession made by the Revenue before the Apex Court in 'Union of India and Others v. Rajeev Bansal' ([2024] SCC Online SC 2693)? 2. Whether the petitioner was afforded adequate time to respond to the show-cause notice issued under Section 148A(b) of the Income Tax Act, 1961, which stipulated a minimum of seven days, when she was given only four days (including the last date for response)? Assessee's Arguments: - The Revenue conceded before the Apex Court in 'Union of India and Others v. Rajeev Bansal' that for AY 2015-16, notices under Section 148A must be issued before 01.04.2021, and proceedings initiated thereafter would not be sustained. - The petitioner was granted only four days to respond to the notice under Section 148A(b), which is significantly less than the statutory minimum of seven days prescribed by the Act. Revenue's Arguments: - The judgment records that the learned counsel for the respondents were heard, but their specific arguments are not detailed.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69A,Section 148A,Section 148A(b),Section 148A(d),Section 271(1)(b),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF OCTOBER 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 31264 OF 2026 (T-IT) BETWEEN:

SMT. ASHWINI ANANTHA RAO AGED ABOUT 41 YEARS W/O M S PRASHANTH, NO.59, 3RD MAIN ROAD, BASAVESHWARA LAYOUT, NEAR RAILWAY GATE, NAGASHETTIHALI, BANGALORE, KARNATAKA 560094. …PETITIONER (BY SRI. B. G. CHIDANANDA URS., ADVOCATE)

AND:

1.

INCOME TAX OFFICER WARD 6(3)(1), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU 560 095.

2.

PRINCIPAL CHIEF COMMISSIONER INCOME TAX BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE KARNATAKA 560 009.

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

3.

ASSESSMENT UNIT REPRESENTED 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, JAWARHARLAL NEHRU STADIUM, DELHI-110 003.

4.

NATIONAL FACELESS ASSESSMENT CENTRE REPRESENTED BY ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER INCOME TAX DEPARTMENT, MINISTRY OF FINANCE ROOM NO.401, 2ND FLOOR, F-RAMP, JAWARHARLAL NEHRU STADIUM, DELHI 110 003. …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 (A) QUASH AND SET ASIDE THE ASSESSMENT ORDER DATED 23.03.2023 IN DIN AND

ORDER NO. ITBA/AST/S/147/2022- 23/1051150804(1) PASSED BY THE 1ST RESPONDENT UNDER SECTION 147 READ WITH SECTION 144 OF THE INCOME-TAX ACT, 1961, TREATING THE CASH DEPOSITS OF RS.56,39,000/- AS UNEXPLAINED MONEY UNDER SECTION 69A AND HC-KAR ADDING INTEREST INCOME OF RS.7,040/-, THEREBY DETERMINING THE TOTAL INCOME AT RS.56,46,040/-, WHICH IS HEREWITH ENCLOSED AS ANNEXURE G. (B) QUASH AND SET ASIDE THE PENALTY ORDER IMPOSED UNDER ORDER UNDER SECTION 271(1)(B) OF THE INCOME-TAX ACT, 1961, VIDE DIN NO. ITBA/PNL/F/271(1)(B)/2023-24/1055526331(1) HEREWITH ENCLOSED AS ANNEXURE P; (C) QUASH AND SET ASIDE THE PENALTY ORDER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, VIDE DIN NO. ITBA/PNL/F/271(1)(C)/2023-24/1056075764(1), IMPOSING A PENALTY OF RS.17,42,450/- WHICH IS HEREWITH ENCLOSED AS ANNEXURE Q.

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's grievance is with the initiation of reassessment proceedings under Section 147 of the Income Tax Act, 1961 [for short, ‘the IT Act’] with the issuance of notice under Section 148A(b) of the IT Act on 23.03.2022 and the culmination of this notice HC-KAR with an order under Section 148A(d) of the IT Act and the reassessment order under Section 147 read with Section 144 of the IT Act. The details of the impugned orders are as follows and these are for the assessment year 2015-16.

Sl. No.

Notices/ Orders

Date Provisions of Income Tax Act, 1961

Annexures 1. Assessment Order 23.03.2023 147 r/w. 144 G 2. Penalty Order 24.08.2023 271(1)(b) P 3. Penalty Order 14.09.2023 271(1)(b) Q

Sri. Chidananda Urs B.G., the learned counsel for the petitioner, and Sri. Y.V. Raviraj and Sri. M. Dilip [a learned Senior Standing Counsel/learned Standing Counsel for the respondents], are heard on whether this Court must interfere with the proceedings as sought for by the petitioner on the following grounds. A. That it is undisputed that the Revenue has conceded before the Apex Court in ‘Union of India and Others v. Rajeev HC-KAR Bansal’1 that for the assessment year 2015-16 notice under Section 148A of the IT Act will have to be issued before 01.04.2021 and that the proceedings would not be sustained and in cases where notice is issued beyond this date.

B. In fact, this Court relying upon a Division Bench’s judgment of this Court in Writ Appeal No.612/2025 [T- IT], has disposed of several petitions on the basis of such concession.

The notice under Section 148A(b) of the IT Act is issued on 23.03.2022 allowing petitioner time till 27.03.2022 to file its response to show cause against issuance of notice under Section 148 of the IT Act. The provisions of Section 148A(b) of the IT Act as it

1 [2024] SCC Online SC 2693 HC-KAR stood for the relevant assessment year contemplated a minimum period of seven days with a maximum of 30 days subject to extension on an application by reasons. The petitioner asserts that notwithstanding these definite timelines in the statute she is allowed only four days including 27.03.2022 only to save limitation. This Court finds both grounds formidable, and the petitioner is entitled to succeed on both these grounds and hence, the following: ORDER

The petition is allowed and the following are quashed.

Sl. No.

Notices/ Orders

Date Provisions of Income Tax Act, 1961

Annexures 1. Assessment Order 23.03.2023 147 r/w. 144 G 2. Penalty Order 24.08.2023 271(1)(b) P 3. Penalty Order 14.09.2023 271(1)(b) Q

Sd/- (B M SHYAM PRASAD) JUDGE SA Ct:sr

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