THE PR. COMMISSIONER OF INCOME TAX vs. SMT. ARWA HARARWALA

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ITA/577/2022HC KarnatakaKAHC01055017202219 November 2025Bench: B M SHYAM PRASAD,T.M.NADAF9 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal's decision was upheld, stating that a notice under Section 143(2) must be issued by the jurisdictional AO within the prescribed time limit. A notice issued by an officer lacking jurisdiction, even if transferred later, cannot be cured under Section 292B of the Income Tax Act.

What were the facts?

The assessee filed income tax returns, which were selected for scrutiny. A notice under Section 143(2) was issued by an Assessing Officer (AO) who subsequently transferred the file to another AO, claiming jurisdiction. The assessment order was passed by the latter AO.

What were the issues?

Whether a notice under Section 143(2) issued by an AO without jurisdiction can be validated retrospectively. Whether defects in the issuance of a notice under Section 143(2) are curable under Section 292B of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 292B,Section 292BB

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF NOVEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF INCOME TAX APPEAL NO. 577 OF 2022 C/W INCOME TAX APPEAL NO. 373 OF 2022

IN ITA No. 577/2022

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX KORMANGALA BANGALORE.

2.

THE INCOME TAX OFFICER WARD-7(2) (2) 80 FEET ROAD BMTC BUILDING KORMANGALA BANGALORE.

…APPELLANTS (BY SRI. SANMATHI E I.,ADVOCATE)

AND:

SMT. ARWA HARARWALA FLAT NO.B-502 WILSON APARTMENTS 13TH CROSS

Digitally Signed by REKHA R Location : High Court of Karnataka

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

WILSON GARDEN BANGALORE-560027.

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

THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 20.12.2021 PASSED IN ITA NO.01/BANG/2020 ASSESSMENT YEAR 2014-2015. PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/ OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 20.12.2021 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN ITA NO. 01/BANG/2020 (ANNEXURE- A) FOR A.Y. 2014-2015 .

IN ITA NO. 373/2022

BETWEEN:

1.

SMT ARWA HARARWALA W/O LATE SRI HUSSAIN AFTAB HARARWALA AGED ABOUT 52 YEARS R/A FLAT B-502 WILSON APARTMENTS,

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

13TH CROSS, WILSON GARDEN BENGALURU-560027

...APPELLANT (BY SRI. ANNAMALAI S.,ADVOCATE) AND:

THE INCOME TAX OFFICER OLD WARD-7(2)(2) NEW WARD-5(2)(1) BMTC BUILDING 6TH BLOCK 80 FEET ROAD KORAMANGALA BENGALURU-560095. ...RESPONDENT (BY SRI.E.I. SANMATHI.,ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 20/12/2021 PASSED IN ITA NO. 01/BANG/2020, FOR THE ASSESSMENT YEAR 2014- 2015. PRAYING A) TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT. B) TO DIRECT THE TRIBUNAL TO CONSIDER THE ISSUES NOT ADJUDICATED BY THEM AND TO THAT EXTENT HOLD THAT THE ORDER OF THE TRIBUNAL IS BAD IN LAW, IN THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGLAURU IN ITA NO. 1/BANG/2020 DATED 20/12/2021 FOR THE ASSESSMENT YEAR 2014-2015 VIDE ANNEXURE-A.

THESE APPEALS, COMING ON FOR FURTHER ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF

ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)

The Revenue is in this appeal as against the order dated 20.12.2021 in ITA No.01/Bang/2020 [Annexure-A]. The Tribunal’s order is relevant to the Assessment Year 2014-15. The Assessee is also in appeal in No.373/2022 as against the Tribunal's very order. If the Revenue contends that the Tribunal could not have intervened on the ground of Assessing Officer's lacking jurisdiction, the Assessee has filed its appeal contending that the Tribunal, though different grounds were urged including the ground of limitation, has not considered the same and therefore the questions in those regards must be substantial questions for hearing.

2.

Sri E.I.Sanmathi, the learned counsel for the Revenue, and Sri Annamalai S., the learned

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

counsel for the Assessee, are heard on the substantial questions proposed both by the Revenue and the Assessee. Whether the Tribunal could have interfered with the assessment order dated 28.10.2019 and the order of the Commissioner of Income Tax (Appeals) - 10 in ITA No.10022/CIT(A)- 10/2017-18 are examined in the light of these material circumstances.

[a] On 01.10.2014, the Assessee filed its Income Tax Returns as proprietrix of M/s. Hydromatic Engineering Company with ITO, Ward 5(2). [b] On 28.08.2015, the Assessee's Returns are selected for scrutiny and notice under Section 143 (2) of the Income Tax Act, 1961 is issued scheduling the date of hearing on 08.09.2015. [c] The Assessee has applied for adjournment, and on this day, the ITO Ward - 2(3)(2) has transferred the file to ITO Ward - 7(2)(2) opining that the jurisdiction will be with this ITO.

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

3.

It is undisputed that the opinion in this regard is part of the order sheet entry. The ITO Ward -7(2)(2) has passed the Assessment Order dated 30.12.2016 which is successfully called in question by the Assessee before the Commissioner of Income Tax Appeals, CIT(A), Bengaluru - 10. The Apex Court in Assistant Commissioner of Income Tax vs S.K.Industries1 has affirmed the decision of the Delhi High Court in S.K.Industries and Assistant Commissioner of Income Tax2 wherein the Division Bench has observed thus:

"Be that as it may, in the considered view of the Court, the AO having jurisdiction i.e. Respondent No.1 ought to have issue a notice under section 143(2)(a) of the Act within the prescribed time limit i.e., 30th September, 2014 in order to proceed with the assessment. Considering that a similar mistake of an AO not having jurisdiction over the Assessee

1 (2022) 141 taxmann.com 569 (SC) 2 2022 (141) Taxmann.com 568 (Delhi)

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

issuing a notice to it had been committed earlier, there was no occasion for the Revenue to continue to repeat the same mistake and expect that it will be condoned.

The impugned assessment order dated 31st March, 2016 is unsustainable in law since it has been passed without the AO having jurisdiction over the Assessee issuing notice to it under section 143(2)(a) within the prescribed time limit i.e. on or before 30th September, 2014. The impugned assessment order dated 31st March, 2016 is hereby set aside."

4.

This Court is of the opinion that no exception can be taken with a Tribunal's opinion because it is undisputed that even as of the date of the notice dated 28.08.2015, the jurisdictional Assessing Officer was the ITO Ward - 7(2)(2) and that notice is issued by the ITO Ward - 2(3)(2) only to transfer the same to the jurisdictional ITO. Sri. E.I. Sanmathi submits that this must be a defect that is curable in terms of Section 292B of the IT Act, but in response, Sri Annamalai S. relies upon a

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

decision of a Co-ordinate Bench of this Court in ITA No.192/2012 and this Court, while considering the provisions of Section 292B of the IT Act, has observed thus:

"It is also noteworthy that Section 292B only covers a situation where there is a defect or omission in a notice, which has already been issued by the assessment officer. In the instant case, the assessing officer has not issued notice under Section 143(2) of the Act, therefore, the question of curing a defect or omission, in a notice which has not been issued does not arise. Similarly, Section 292BB of the Act does not validate the proceeding in absence of notice. In order to attract the applicability of Section 292BB, the notice must have been issued by the assessing officer and the aforesaid provision also seeks to cure only procedural irregularities and does not cure the complete absence of notice."

5.

It follows from this decision that recourse to Section 292B of the IT Act could be had if there is a curable omission in the notice issued by the

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HC-KAR NC: 2025:KHC:47646-DB ITA No. 577 of 2022 C/W ITA No. 373 of 2022

jurisdiction of the Assessing Officer, but if the notice is issued by an officer who did not have jurisdiction, recourse cannot be had to the afore-provision. Therefore, this Court finds that no substantial questions arise in the appeal by the Revenue and the appeal must be rejected and insofar as the appeal by the Assessee in ITA No.373/2022, it could not survive with this Court's afore view in the Revenue's appeal. As such, the appeals stand disposed of.

In view of disposal of these appeals, pending applications stand disposed of.

Sd/- (B M SHYAM PRASAD) JUDGE

Sd/- (T.M.NADAF) JUDGE SA ct:sr

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