Reassessment – Section 148A(b) – Notice providing less than seven days’ time to file response is invalid; contravenes statutory mandate.

by

The Karnataka High Court, in its judgment dated 5th August 2025 in The Income Tax Officer & Others v. Venkatal a Iyyappa Rajanna (W.A. No. 612/2025), quashed a reassessment notice issued under Section 148A(b) of the Income-tax Act, 1961. The Court held that the Assessing Officer failed to comply with the statutory mandate of providing a minimum period of seven days to the assessee for filing a response. Since the notice granted less than the required period, it was declared invalid and all consequential proceedings, including notice under section 148 and subsequent reassessment, were set aside. The Court reaffirmed that adherence to procedural safeguards under Section 148A is not a mere formality but a substantive right of the assessee, integral to the principle of natural justice.

Key Highlights

  1. Background
    • The Assessing Officer issued a notice under Section 148A(b) to the assessee granting less than 7 days for filing a reply.
    • The assessee challenged the notice on the ground of statutory violation.
  2. Issue
    • Whether a reassessment notice under Section 148A(b) which does not allow the assessee the minimum period of 7 days is valid in law.
  3. Court’s Reasoning
    • Section 148A(b) uses the words “not less than seven days” – a clear mandate.
    • Granting lesser time defeats the statutory protection and denies effective opportunity of hearing.
    • Such non-compliance is not a curable irregularity but a jurisdictional defect.
  4. Decision
    • The Division Bench quashed the notice and all consequential proceedings.
    • However, liberty was given to the department to issue a fresh notice following the proper procedure.
  5. Significance
    • Reinforces that procedural safeguards under Section 148A are substantive rights of the taxpayer.
    • Reassessment proceedings can be invalidated even on technical lapses if they affect natural justice.
    • Serves as a precedent for challenging defective 148A(b) notices across jurisdictions.

Related proceedings and follow-on appellate order

  • A single-judge order quashing a 148A(b) notice (because it gave only 5 days for reply) in Smt. Komarla Yogendra Keertana (WP No.10266 of 2023) was affirmed by the Division Bench. The appeal in Principal Chief Commissioner of Income-tax v. Smt. Komarla Yogendra Keertana was dismissed (oral judgment dated 20 Aug 2025), expressly following the coordinate-bench decision of 05.08.2025.

Operative reasoning (brief)

  • Section 148A(b) (as enacted) requires notice to show cause be served with a period “not less than seven days” (and up to 30 days). That phrase is mandatory in the court’s view — it ensures the assessee’s right to be heard. Where the notice calls for a reply before the expiry of seven days from issuance, the statutory requirement is breached and natural-justice is denied. Consequential actions which rest on a defective 148A(b) notice are also vitiated.

Practical implications for practitioners

  1. Always check the date of issue and the date stipulated for reply in any 148A(b) notice. If the interval is < 7 days, challenge the notice promptly (writ practice or statutory remedies).
  2. If the AO proceeds despite the defective notice, challenge all consequential acts (148A(d), 148 notice, reassessment order, penalties) because courts have set aside downstream order.

  3. The Revenue may re-issue a fresh valid notice (or follow faceless/other procedure), so liberty to act is typically reserved.

Please share

Leave a comment