- 1 - HC-KAR NC: 2025:KHC:50567 WP No. 22075 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 22075 OF 2023 (T-IT) BETWEEN: FIDELITY BUSINESS INDIA PVT. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 ”PINEHURST”, EMBASSY GOLF LINK BUSINESS PARK, OFF. INTERMEDIATE RING ROAD, BANGALORE – 560 071, REPRESENTED HEREIN BY ITS HEAD – TAX AND REGULATORY, MR. PRASHANTH KUMAR H. R. …PETITIONER (BY SRI. T. SURYANARAYANA, SENIOR COUNSEL FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1) (1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA BANGALORE – 560 095 2. THE PRINCIPAL COMMISSIONER OF INCOME -TAX-3, 5TH FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE – 560 095 3. ASSESSMENT UNIT, INCOME-TAX DEPARTMENT, REPRESENTED HEREIN BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME- TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE ROOM NIO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI – 110 003 …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE) * Retyped and replaced vide Chamber order dated:23.01.2026. Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:50567 WP No. 22075 of 2023 THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE DATED 22.08.2023 ANNEXURE-M BEARING DOCUMENT IDENTIFICATION NO.ITBA/PNL/S/271(1)(c)/2023-24/1055330348(1) ISSUED BY THE R1 U/S 274 R/W SECTION 271(1)(c) OF THE ACT FOR THE ASSESSMENT YEAR 2007-08. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “(a) Quashing the impugned notice dated 22.08.2023 (Annexure-M) bearing document identification No. ITBA/PNL/S/271(1)(c)/2023-24/1055330348(1) issued by the 1st Respondent under section 274 read with section 271(1)(c) of the Act for the assessment year 2007-08; (b) pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity.” 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that on 28.10.2011, the Assessing Officer passed the final Assessment Order, in pursuance of which, the penalty notice under Section * Retyped and replaced vide Chamber order dated:23.01.2026. - 3 - HC-KAR NC: 2025:KHC:50567 WP No. 22075 of 2023 271(1)(c) r/w. Section 274 of the I.T. Act was issued by the respondents to the petitioner, who not only requested the respondents to keep the penalty proceedings in abeyance but also filed an appeal, which came to be allowed by the Income Tax Appellate Tribunal on 13.02.2018. 4. Having regard to the fact that the order passed by the ITAT has attained finality, it is contended having regard to the provisions contained in Section 275(1)(a) of the I.T. Act, prior to its amendment with effect from 01.04.2025, the maximum period permitted for the respondent to conclude the penalty proceedings would come to an end, within a period of six months from the calendar month, in which the tribunal passed an order, on or before 31.08.2018. It is therefore contended that the period for completion of penalty proceedings having been expired on 21.08.2018, the impugned penalty notice dated 22.08.2023 purporting to continue penalty proceedings and passed the final order is contrary to the Section 275 of the I.T. Act and the same deserves to be quashed. 5. Per contra, it is contended that on behalf of the respondents that the impugned notice in continuation of the earlier notice and the same was kept in abeyance, at request of the * Retyped and replaced vide Chamber order dated:23.01.2026. - 4 - HC-KAR NC: 2025:KHC:50567 WP No. 22075 of 2023 assessee, as the matter was pending before the Tribunal and as such, the period of six months contemplated under Section 275(1)(a) of the I.T. Act, would not be applicable to the facts of the instant case and as such, the petition is liable to be dismissed. 6. Before adverting to the rival submissions, it is necessary to extract Section 275(1)(a) of the I.T. Act, prior to amendment, which reads as under: “275. Bar of limitation for imposing penalties.— (Before the amendment / substitution vide Finance Act, 2025) 275. (1)…………… (1A) In a case where the relevant assessment or other order is the subject-matter of an appeal to the Joint Commissioner (Appeals) or to the Commissioner (Appeals) under Section 246 or Section 246A or an appeal to the Appellate Tribunal under section 253 or an appeal to the High Court under section 260A or an appeal to the Supreme Court under section 261 or revision under section 263 or section 264 and an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty is passed before the order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Principal Commissioner or Commissioner or the order of revision under section 263 or section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under section 263 or section 264: * Retyped and replaced vide Chamber order dated:23.01.2026. - 5 - HC-KAR NC: 2025:KHC:50567 WP No. 22075 of 2023 Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed – (a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard; (b) after the expiry of six months from the end of the month in which the order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Principal Commissioner or Commissioner or the order of revision under section 263 or section 264 is passed: Provided further, that the provisions of sub-section (2) of section 274 shall apply in respect of the order imposing or enhancing or reducing penalty under this sub-section. (2)….” 7. (2)….” 7. As can be seen from the aforesaid provisions, the maximum period that was available to the respondents to complete the penalty proceedings expired on 31.08.2018 and consequently, the impugned penalty notice purporting to continue penalty proceedings from 22.08.2023 is clearly barred by limitation and the same deserves to be quashed. 8. Insofar as the contention urged by the learned counsel for the respondents that the impugned notice dated 22.08.2023 issued under Section 271(1)(c) of the I.T.Act was based on the order giving effect to, also dated 22.08.2023 and was accordingly, * Retyped and replaced vide Chamber order dated:23.01.2026. - 6 - HC-KAR NC: 2025:KHC:50567 WP No. 22075 of 2023 well within time is concerned, having regard to the undisputed fact that the period to complete the penalty proceedings came to an end and expired on 31.01.2018 as stated hereinbefore, merely because a subsequent order giving effect to was passed on 22.08.2023, it cannot be said that the impugned notice was within limitation and as such, the said contention urged by the respondent cannot be accepted. 9. In the result, I pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned notice at Annexure-M dated 22.08.2023 issued by respondent No.1 is hereby quashed. SD/- (S.R.KRISHNA KUMAR) JUDGE BMC/SRL List No.: 2 Sl No.: 27 Inserted vide chamber order dated: 23.01.2026.