Reassessment Quashed as JAO’s Notice Was Outside Section 151A Scope, Following Precedent.
Issue
Whether an entire reassessment proceeding, from the initial notice to the final recovery, is void ab initio (from the beginning) if the Show Cause Notice (SCN) was issued by a Jurisdictional Assessing Officer (JAO) in a manner that falls outside the scope of Section 151A (which governs the faceless assessment scheme).
Facts
- The assessee challenged a complete set of reassessment proceedings for the Assessment Year 2017-18.
- This included the initial Show Cause Notice under Section 148A(b), the order under Section 148A(d), the notice under Section 148, the final reassessment order (passed under Sections 147/144/144B), the demand notice, and even a garnishee notice attaching the assessee’s bank accounts.
- The assessee’s challenge was based on a binding precedent from a co-ordinate Bench of the same High Court in the case of Ramachandra Reddy Ravi Kumar.
- This precedent had held that the SCN, having been issued by a Jurisdictional Assessing Officer in a manner “outside the scope of section 151A,” was legally invalid.
Decision
- The High Court ruled decisively in favour of the assessee.
- Following the binding precedent set by the co-ordinate Bench, the court held that the initial show-cause notice was “obliterated” (voided).
- The court ruled that since the foundational notice was invalid, all further and consequential proceedings were also null and void.
- Consequently, the High Court quashed the entire chain of actions: the SCN under Section 148A(b), the order under Section 148A(d), the notice under Section 148, the final assessment order, the demand notice, and the garnishee notice.
Key Takeaways
- Jurisdictional Foundation: A valid Show Cause Notice is the absolute foundation of an assessment. If this initial notice is found to be void for a jurisdictional error (like being outside the scope of Section 151A), the entire super-structure built upon it—including the final order and any recovery actions—collapses.
- Binding Precedent: Courts are bound by the decisions of their coordinate benches on identical legal issues. The Ramachandra Reddy Ravi Kumar case was the decisive factor.
- All Actions Quashed: When the root of a proceeding (the SCN) is quashed, all subsequent actions (the order, demand, and attachment) are automatically rendered invalid and will be set aside by the court.
HIGH COURT OF KARNATAKA
Karnataka Co Operative Sheep and Goat Rearers Societies Federation Ltd.
v.
Income-tax Officer*
S.R.Krishna Kumar, J.
WRIT PETITION NO. 32093 OF 2025 (T-IT)
OCTOBER 27, 2025
B.S. Balachandran, Adv. for the Petitioner. M. Dilip, Adv. for the Respondent.
ORDER
1. In this petition, petitioner seeks for the following reliefs:-
“i. Issue a writ of certiorari or any other writ as the Hon’ble High Court may deem fit and quash the following:
| ANNEXURE ‘A’ | Impugned notice dated 25.01.2024 issued by Respondent No.1 under section 148A(b) of the Act for AY 201718 in DIN & Notice No. ITBA/AST/F/148A(SCN)/2023-24/1060097059(1). |
| ANNEXURE ‘A1’ | Impugned notice dated 11.02.2024 issued by Respondent No.1 under section 148A(b) of the Act for AY 201718 in DIN & Notice No. ITBA/AST/F/148A(SCN)/2023-24/1060764733(1) |
| ANNEXURE ‘A2’ | Impugned notice dated 12.03.2024 issued by Respondent No.1 under section 148A(b) of the Act for AY 201718 in DIN & Notice No. ITBA/AST/F/148A(SCN)/2023-24/1062423403(1) |
| ANNEXURE ‘B’ | Impugned order dated 21.03.2024 issued by Respondent No.1 under section 148A(d) of the Act for AY 2017-18 in DIN & Order No. ITBA/AST/F/148A/2023-24/1063117566(1) |
| ANNEXURE ‘C’ | Impugned notice dated 21.03.2024 issued by Respondent No.1 under section 148 of the Act for AY 2017-18 in DIN & Notice No. ITBA/AST/S/148_1/2023-24/1063118128(1) |
| ANNEXURE ‘G’ | Impugned assessment order dated 28.02.2025 passed by Respondent No.2 under section 147 read with section 144 read with section 144B of the Act for AY 2017-18 in DIN & Order No. ITBA/AST/S/147/2024- 25/1073852877(1) |
| ANNEXURE ‘G1’ | Impugned computation sheet dated 28.02.2025 issued by Respondent No.2 under section 147 read with section 144 of the Act for AY 2017-18 in DIN & Document No. ITBA/AST/S/215/2024-25/1073853116(1) |
| ANNEXURE ‘G2’ | Impugned demand notice dated 28.02.2025 issued by Respondent No.1 under section 156 of the Act for AY 2017-18 in DIN & Notice No. ITBA/AST/S/156/2024-25/1073852963(1) |
| ANNEXURE ‘H’ | Impugned garnishee notice dated 07.10.2025 issued by Respondent No.1 under section 226(3) to Respondent No.4 for attachment of Petitioner’s bank account in DIN & Notice No. ITBA/RCV/S/226(3)_1/2025-26/1081497074(1) |
ii. Lift the bank attachment placed by Respondent No.1 on the following bank accounts of the Petitioner vide the impugned garnishee notice dated 07.10.2025 issued under section 226(3) in DIN & Notice No. ITBA/RC/S/226(3)_1/2025-26/1081497074(1) (ANNEXURE ‘H’);
| Bank | Account Number | Account Type |
| The Karnataka State Co-operative Apex Bank Limited | 10251110200000251 | Saving |
| The Karnataka State Co-operative Apex Bank Limited | 1025102040000041 | Saving |
iii. Issue any other writ, order or direction to which the Petitioner is found entitled to in the present facts and circumstances and in the interests of justice and equity.”
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner invited my attention to the order of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar v. Dy. CIT (Kar)/W.P.No. 17352/2022 and connected matters -dated 28.08.2025, in order to contend that the present petition deserves to be allowed and disposed of in terms of the said order.
4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.
5. As rightly contended by the learned counsel for the petitioner the present petition is directly and squarely covered by the decision of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar (supra) and connected matters -dated 28.08.2025, the operative portion of which reads as under:
“13. I, therefore, pass the following:
ORDER
(i) The impugned show cause notices issued by the jurisdictional Assessing Officer outside the scope of Section 151-A of the Act stand obliterated. All further proceedings initiated thereto, challenged in these cases would stand quashed.
(ii) Liberty is reserved to the respondents – revenue to revive all these petitions in the event the Apex Court would hold in favour of the Revenue in the pending before it.
(iii) With the aforesaid liberty and to the aforesaid extent, the petitions are allowed.
(iv) Contentions of both the parties except the one noted hereinabove, shall remain open to be considered in the event revival of these petitions would become necessary.”
6. The aforesaid order is applicable to the facts and circumstances of the instant case and consequently, the present petition also deserves to be disposed of in terms of the judgment of co-ordinate Bench of this Court in Ramachandra Reddy Ravi Kumar case (supra).
7. In the result, I pass the following:
ORDER
| (i) | The petition is allowed and disposed of in terms of the decision of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar (supra)and connected matters – dated 28.08.2025. |
| (ii) | The impugned show cause notices and consequential orders, notices etc., at Annexures-A, A1, A2, B, C, G, G1, G2 and H dated 25.01.2024, 11.02.2024, 12.03.2024, 21.03.2024, 21.03.2024, 28.02.2025, 28.02.2025, 28.02.2025 and 07.10.2025 respectively, are hereby quashed. |
| (iii) | Liberty is reserved in favour of the respondents -Revenue to seek revival of this petition, subsequent to disposal of the matters pending before the Apex Court and all rival contentions between the parties in this regard are kept open and no opinion is expressed on the same. |