Karnataka High Court on Obligation to Respond to Section 142(1) Notice in Block Assessment Context

Background of the Dispute

The matter in Singe Gowda Rathna Ravi Vs ACIT (Karnataka High Court) arose from a challenge to a Notice dated 10.04.2026 purportedly issued under Section 142(1) of the Income Tax Act 1961. The notice sought production of accounts and documents following a search conducted on the assessee. These search-related proceedings were already under judicial scrutiny in W.P.No.4850/2025 [T-IT] and connected writ petitions.

The assessee approached the Karnataka High Court questioning the legality and scope of this Section 142(1) notice, arguing that the Revenue could not resort to this provision in the prevailing factual matrix, given that the proceedings related to a search and a block assessment period.

Assessee’s Core Contentions

1. Jurisdictional Objection Under Section 142(1)

Counsel for the assessee, Ms. Jenita Chatterjee, advanced a two-pronged challenge. The first limb focused squarely on jurisdiction under Section 142(1):

  • According to the assessee, Section 142(1) is ordinarily invoked at a pre-show cause stage for calling information during regular assessment proceedings.
  • Here, the proceedings stemmed from a search, and were already pending before the authorities.
  • The assessee argued that once search-related proceedings are on foot, any further requirement to call for books or documentation relating to that search ought to be exercised under Section 153C, rather than under Section 142(1).
  • On this basis, the assessee contended that the impugned notice suffered from lack of jurisdiction, as the wrong provision had been invoked.

2. Alleged Pre-Determination and Bias

The second leg of the challenge was directed at the substance and tenor of the notice:

  • The assessee asserted that the notice effectively pre-judged the issue by requiring him to “show cause” in a manner indicating that the authority had already arrived at a conclusion that certain amounts constituted undisclosed income.
  • The notice referred to a block period between 01.04.2018 and 13.01.2025, and called upon the assessee to meet a proposed disallowance on the premise that the amount in dispute represented undisclosed income relatable to this period.
  • On this foundation, the assessee submitted that the notice displayed pre-determination, thereby undermining the fairness of the process and warranting interference by the Court in writ jurisdiction.

Revenue’s Stand

Appearing for the Revenue, Sri Y. V. Raviraj, learned Senior Standing Counsel, countered both strands of the assessee’s arguments.

1. Nature of the Notice – To Be Read With Block Assessment Provisions

On the jurisdictional point, the Revenue’s position was that:

  • The communication was not a simple, stand-alone notice under Section 142(1).
  • Instead, it had to be construed in conjunction with the special provisions governing block assessment pursuant to a search, particularly Section 158BC and Section 158BD.
  • The Revenue stressed that the notice formed part of the process intended to conclude assessment relating to a block period, and therefore, the reference to Section 142(1) could not be viewed in isolation or divorced from the wider statutory scheme under Section 158BC and Section 158BD.

2.