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Muyeen Pasha Vs ITO (Karnataka High Court)
Karnataka HC Strikes Down Reassessment for Exceeding Jurisdiction under 151A; Leaves Door Open for Revival if SC Favors Revenue
Karnataka High Court set aside reassessment proceedings initiated for AY 2016-17 on the ground that the show-cause notices were issued beyond the scope of Section 151A .
The Petitioner challenged a series of proceedings — including the order u/s 148A(d) dated 14.03.2023, notice u/s 148, assessment order u/s 147 r/w 144 & 144B, corresponding computation & demand notices, & multiple penalty notices u/s 271(1)(b), 271(1)(c), & 271F, all pertaining to AY 2016-17.
It was contended that the initiation of proceedings was without proper jurisdictional approval & outside the parameters prescribed u/s 151A, which governs the allocation of powers & approvals in faceless assessment cases.
The Court observed that the grounds raised were identical to those already adjudicated in W.P.No.28182/2024 & connected matters, decided on 28.08.2025, where similar reassessment proceedings had been quashed for being initiated without jurisdiction.
Following the same reasoning, the Court quashed the impugned notices & all consequential proceedings, holding that the Assessing Officer had acted outside the permissible limits of Section 151A. However, it granted liberty to the Revenue to revive the proceedings if the Supreme Court, in the pending matter, eventually rules in favour of the Department.
The petition was accordingly allowed, with all other contentions kept open for reconsideration in case of revival.
This decision reinforces that reassessment proceedings must strictly adhere to the procedural mandates of Section 151A & faceless assessment protocols, & any deviation renders the entire action invalid unless subsequently validated by a higher judicial pronouncement.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner is before this Court seeking the following prayer:
“(i) Quashing the impugned order bearing DIN and Notice No. ITBA/AST/F/148A/2022- 23/1050727589(1) dated 14.03.2023 passed by Respondent No. 1 under Section 148A(d) of the Income-tax Act, 1961 for the Assessment Year 2016-17 (Annexure ‘C-1’);
(ii) dated Quashing the impugned notice bearing DIN and Notice No. ITBA/AST/S/148_1/2022-23/1050733107(1) 14.03.2023 passed by Respondent No. 1 under Section 148 of the Income-tax Act, 1961 for the Assessment Year 2016-17 (Annexure ‘C-2’);
(iii) Quashing the impugned Assessment Order bearing DIN No. dated ITBA/AST/S/147/2023-24/1059602436(1) 11.01.2024 passed by Respondent No. 2 under Section 147 r.w.s 144 read with Section 144B of the Income-tax Act, 1961 for the Assessment Year 2016-17 (Annexure ‘M-1’);
(iv) Quashing the accompanying Computation Sheet bearing DIN & Document No. ITBA/AST/S/114/2023–24/1059602542(1) dated Respondent No. 2 for the Assessment Year 2016-17 11.01.2024 issued by (Annexure ‘M-2’);
(v) Quashing the resultant Notice of Demand bearing DIN & Notice No. ITBA/AST/S/156/2023-24/1059602532(1) dated 11.01.2024 issued by Respondent No. 2 for the Assessment Year 2016-17 (Annexure ‘M-3’);
(vi) Quashing the Show Cause Notice of Penalty bearing DIN & Notice No. 24/1059602630(1) ITBA/PNL/F/271(1)(b)/2023-dated 11.01.2024 issued by Respondent No. 2 under Section 274 read with Section 271(1)(b) of the Income-tax Act, 1961, for the Assessment Year 2016-17 and all further penalty proceedings arising out of said Notice of Penalty (Annexure ‘N-1’);
(vii) Quashing the Show Cause Notice of Penalty bearing DIN & Notice No. ITBA/PNL/S/271(1)(c)/2023-24/1059602631(1)) dated 11.01.2024 issued by Respondent No. 2 under Section 274 read with Section 271(1)(c) of the Income-tax Act, 1961, for the Assessment Year 2016-17 and all further penalty proceedings arising out of the said Notice of Penalty (Annexure ‘N-2’);
(viii) Quashing the Show Cause Notice of Penalty bearing DIN & Notice No. ITBA/PNL/S/271F/2023-24/1059602632(1) dated 11.01.2024 issued by Respondent No. 2 under Section 274 read with Section 271F of the Income-tax Act, 1961 for the Assessment Year 2016-17 and all further penalty proceedings arising out of said Notice of Penalty (Annexure ‘N-3’) and
(ix) Pass such order that this Hon’ble Court, may seem fit, in the facts and circumstances of the case, and in the interest of justice and equity.”
2. Heard Sri Sandeep Huilgol, learned counsel for the petitioner and Sri M. Dilip, learned counsel for the respondents.
3. The grounds projected in the subject petition in support of the prayer quoted supra are identical to the ones considered by this Court in W.P.No.28182/2024 and connected matters, disposed on 28.08.2025.
4. In the light of the issue being similar and the reasons rendered therein becomes applicable to the case at hand, the petition deserves to be disposed on the same lines. Therefore, I pass the following:
ORDER
(i) The impugned show cause notices issued by the jurisdictional Assessing Officer outside the scope of Section 151A of the Act stand obliterated. All further proceedings initiated thereto, challenged in this petition would stand quashed.
(ii) Liberty is reserved to the respondents – revenue to revive the petition in the event, the Apex Court would hold in favour of the Revenue in the matter pending before it.
(iii) With the aforesaid liberty and to the aforesaid extent, the petition is allowed.
(iv) Contentions of both the parties except the one noted hereinabove, shall remain open to be considered in the event revival of this petition would become necessary.
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