- 1 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 17389 OF 2024 (T-IT) BETWEEN: TARISH INVESTMENT AND TRADING COMPANY PVT. LTD, A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, NO.574, NEXT TO WIPRO CORPORATE OFFICE, SARJAPUR ROAD, DODDAKANNELLI, BANGALORE – 560 035, REPRESENTED HEREIN BY ITS DIRECTOR, MR. MANOJ JAISWAL. …PETITIONER (BY SRI. SANDEEP HUILGOL, ADVOCATE) AND: 1. UNION OF INDIA, REPRESENTED HEREIN BY THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI – 110 001. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(1), BENGALURU, BMTC BUILDING, 80 FEET ROAD, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU – 560 095. Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 3. THE CHIEF COMMISSIONER OF INCOME TAX, BENGALURU-I, C.R. BUILDING, NO.1, QUEENS ROAD, BENGALURU-560001. 4. THE DEPUTY/ASSISTANT DIRECTOR OF INCOME TAX, (INVESTIGATION) 1(1), BENGALURU, C.R.BUILDING, NO.1, QUEENS ROAD, BENGALURU-560001. 5. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 7(1)(1), BENGALURU, BMTC BUILDING, 80 FEET ROAD, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560095. 6. THE ASSESSEMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, JAWAHARLAL NEHRU STADIUM, NEW DELHI-110003. …RESPONDENTS (BY SRI. GOWTHAMDEV C ULLAL., ADVOCATE FOR R1; SRI.E.I.SANMATHI, ADVOCATE FOR R2 TO R6) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO I) QUASH THE IMPUGNED ORDER DATED 07/05/2024 BEARING ITBA/AST/F/148A/2024-25/1064704419(1) PASSED BY THE R2 UNDER SECTION 148A(d) OF THE INCOME-TAX ACT, 1961 FOR AY 2017-18 (ANNEXURE-A1); II) QUASH THE IMPUGNED NOTICE DATED 07/05/2024 BEARING ITBA/AST/S/148_1/2024-25/1064704431(1) ISSUED BY THE R2 UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 FOR AY 2017-18 (ANNEXURE-A2) AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING - B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER Heard Sri.Sandeep Huilgol, learned counsel appearing for the petitioner, Sri.Gowthamdev C Ullal, learned counsel appearing for respondent No.1, Sri.E.I.Sanmathi, learned counsel appearing for respondent Nos.2 to 6 and have perused the material on record. 2. The petitioner in the subject petition calls in question an order passed by the 2nd respondent under Section 148A(d) of the Income Tax Act and consequent notices so issued to the petitioner under section 148 of the Income Tax Act, 1961. The notice reads as follows: "Notice under section 148 of the Income-tax Act, 1961 Sir/Madam/M/s. 1. I have the following information in your case or in the case of the person in respect of which you are assessable under the Income tax Act, 1961 (here in alter referred to as "the Act") for Assessment Year 2017-18 • information in accordance with the risk management strategy formulated in this regard - 4 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Order under sub-section (d) of section 148A of the Act has been passed in such case vide DIN ITBA/AST/F/148A/2024- 25/1064704419(1) dated 07/05/2024 and annexed herewith for reference, 2. I, therefore, propose to assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for the Assessment Year 2017-18 and I, hereby, require you to furnish, within a period of three months from the end of month in which this notice is issued, a return in the prescribed form for the Assessment Year 2017- 18. Note:- Please note that any return of income, required to be furnished by you under this section and furnished beyond the period allowed shall not be deemed to be a return under section 139 of the Act. (Proviso 3 to Section 148) NITHAN RAJ T.N. CIRCLE 7(1)(1), BANGALORE" 3. The notice itself indicates that it is issued for the Assessment Year 2017-18 and is admittedly issued on 7.5.2024. Learned counsel appearing for the petitioner submits that the notice is barred by limitation, as the limitation prescribed under Section 148 is for a period of six years from the date of end of the Financial Year of the Assessment Year. Admittedly, Financial Year of Assessment Year, 2017-18 comes to an end on 31.03.2018 and the limitation would cap at 31.03.2024. - 5 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 4. Learned counsel for the petitioner would submit that the issue in the lis stands covered by the three Judge Bench of the Apex Court in the case of UNION OF INDIA AND OTHERS vs. RAJEEV BANSAL1, in which the Apex Court at Paras 49, 53 and 60 has held as follows: "49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on March 31, 2023, while the six year period expired on March 31, 2019. Without the proviso to section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to rupees fifty lakhs or more. The proviso limits the retrospective operation of section 149(1)(b) to protect the interests of the assesses. 53. The position of law which can be derived based on the above discussion may be summarized thus: (i) Section 149(1) of the new regime is not prospective. It also applies to past assessment years; (ii) The time limit of four years is now reduced to three years for all situations. The Revenue can issue notices under Section 148 of the new regime only if three years or less have 1 [2024] 469 ITR 46 - 6 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 elapsed from the end of the relevant assessment year; (iii) the proviso to Section 149(1)(b) of the new regime stipulates that the Revenue can issue reassessment notices for past assessment years only if the time limit survives according to section 149(1)(b) of the old regime, that is, six years from the end of the relevant assessment year; and (iv) all notices issued invoking the time limit under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than rupees fifty lakhs. ii. Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 can extend the time limit till June 31, 2021 60. The above principles can be applied as follows to the factual situation in the present appeals: (i) The Finance Act, 2021 ([2021] 432 ITR (St.) 52) substituted Sections 147 to 151 of the Income Tax Act with effect from April 1, 2021; (ii) sections 147 to 151 of the old law ceased to operate from April 1, 2021; (iii) after April 1, 2021, any reference to the Income Tax Act means the Income Tax Act as amended by the Finance Act 2021; (iv) the time limits prescribed for issuing reassessment notices under section 149 operate retrospectively for three years for all situations and six years in case the escaped assessment amounts to or is likely to amount to more than rupees fifty lakhs." (Emphasis supplied) 5. The High Court of Delhi in two of the judgments has followed the said judgment of the Apex Court in Rajeev Bansal supra. In SHEETAL INTERNATIONAL (P.) LTD vs. CHIEF - 7 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 COMMISSIONER OF INCOME-TAX, CENTRAL-22, it is held as under: "1. Issue notice. 2. Learned counsel appearing for the respondents accepts notice. 3. The petitioner has filed the present petition, inter alia, impugning an order dated 01.05.2024 (hereafter the impugned order) issued under Section 148A(d) of the Income Tax Act, 1961 (hereafter the Act) for the assessment year (AY) 2017-18 as well as the notice dated 01.05.2024 issued under Section 148 of the Act. 4. The petitioner contends that the said notice was issued beyond the period of limitation as prescribed in first proviso to Section 149(1) of the Act. 5. The learned counsel appearing for the petitioner submits that the issue stands covered by the decision of this Court in Manju Somani v. Income Tax Officer [2024] 165 taxmann.com 675/300 Taxman 516/466 ITR 758 (Delhi): Neutral Citation: 2024:DHC:5411-DB. 6. It is also relevant to note that the Supreme Court in a recent decision of Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693/[2024] 167 taxmann.com 70 (SC) (SC) has observed as under: "46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under Section 2 [2024] 168 taxmann.com 308 (Delhi) - 8 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 148 of the new regime for assessment year 2021- 2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. ** ** ** 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012- 2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses." 7. In view of the above, the present petition is allowed. The impugned order dated 01.05.2024 as well as the notice issued under Section 148 in respect of the AY 2017-18 are set aside. 8. Pending applications also stand disposed of." 6. In the light of the issues standing covered on all its fours, the petition deserves to succeed and the action - 9 - HC-KAR NC: 2025:KHC:32722 WP No. 17389 of 2024 impugned and the orders impugned to be obliterated as admittedly the notice issued is beyond the period of limitation. 7. For the aforesaid reasons, the following: O R D E R [i] Petition is allowed. [ii] The impugned order dated 07.05.2024 bearing ITBA/AST/F/148A/2024-25/1064704419(1) passed by the 2nd respondent under Section 148A(d) of the Income Tax Act, 1961 for Assessment Year 2017-18 (Annexure A-1), stands quashed. [iii] The impugned notice dated 07.05.2024 bearing ITBA/AST/S/148_1/2024-25/1064704431(1) issued by the 2nd respondent under Section 148 of the Income Tax Act, 1961 for Assessment Year 2017-18 (Annexure A-2), stands quashed. [iv] The petitioner shall be entitled to all consequential benefits that would flow from the quashment of the order. SD/- (M.NAGAPRASANNA) JUDGE CBC List No.: 1 Sl No.: 45