Karnataka High Court Quashes Section 148A(d) Order and Ex-Parte Assessment — Remits Matter to Section 148A(b) Reply Stage

Case Overview

Case: Sabeer Husain Johura Vs Assessment Unit
Court: Karnataka High Court
Assessment Year: 2017–18

In a significant ruling, the Karnataka High Court intervened to set aside a chain of consequential proceedings initiated under the Income Tax Act, 1961, after finding that the assessee had been denied a meaningful opportunity to participate at the foundational stage of the reopening process. The Court quashed the order under Section 148A(d), the resulting notice under Section 148, and the ex-parte assessment order, restoring the matter to the stage of filing a reply to the notice issued under Section 148A(b).

Background of the Dispute

The assessee approached the Karnataka High Court by way of a writ petition, challenging the legality and validity of the order passed under Section 148A(d) of the Income Tax Act, 1961. Along with this, the assessee also sought the quashing of:

• The notice issued under Section 148 of the Act, and
• The ex-parte order of assessment that had been passed without any participation from the assessee's side.

The genesis of the entire reassessment proceedings lay in a notice dated 23.01.2024, issued to the assessee under Section 148A(b) of the Act. The assessee contended that this notice was never actually received, and consequently, no reply was filed in response to it.

How the Proceedings Unfolded

Since no reply was received from the assessee in response to the Section 148A(b) notice, the assessing authority proceeded to pass an order under Section 148A(d), concluding that income had escaped assessment. Following this, a notice under Section 148 was issued, and further proceedings were carried out — all of which ultimately culminated in an ex-parte assessment order, passed entirely in the absence of the assessee.

It is critical to note that the ex-parte nature of the assessment order formed a central ground for the Court's intervention in this matter.

Key Contentions Raised by the Assessee

The assessee raised several substantive and procedural arguments before the Karnataka High Court: