Full Judgment Text
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WA No. 254 of 2026
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 19 DAY OF MAY, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
WRIT APPEAL NO. 254 OF 2026 (T-IT)
BETWEEN:
1.
THE DEPUTY COMMISSIONER
OF INCOME TAX
CENTRAL CIRCLE-1(1), BENGALURU,
C.R. BUILDING, QUEEN'S ROAD
BENGALURU-560 001.
2.
THE DIRECTOR GENERAL OF INCOME TAX
INVESTIGATION,
C.R. BUILDING, QUEEN'S ROAD,
BENGALURU-560 001.
…APPELLANTS
(BY SRI. RAVI RAJ Y.V., SR. STANDING COUNSEL A/W
Digitally
signed by
VINUTHA B S
Location:
High Court of
Karnataka
SRI. DILIP M., STANDING COUNSEL)
AND:
1.
LENOVO INDIA PVT LTD
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956,
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HAVING ITS OFFICE AT
LEVEL 2, RBD ICON,
DODDENAKUNDI VILLAGE,
MARATHAHALLI OUTER RING ROAD,
MARATHAHALLI POST,
K R PURAM HOBLI,
BENGALURU-560 037.
REPRESENTED BY ITS AUTHORIZED SIGNATORY
MR. PRASHANTH HEGDE.
…RESPONDENT
(BY SMT. TANMAYEE RAJKUMAR, ADVOCATE)
THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, 1961 PRAYING TO SET ASIDE THE ORDER
PASSED BY THE LEARNED SINGLE JUDGE IN WP No.
36341/2025 (T-IT) DATED 05.12.2025 AND ETC.
THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE MR. JUSTICE K. V. ARAVIND
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ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE S.G.PANDIT)
The above writ appeal is a part of a batch of Writ
Appeals filed under Section 4 of the Karnataka High Court
Act, 1961 directed against the learned Single Judge’s
order dated 05.12.2025 in W.P.No.36341/2025 allowing
the writ petition, whereunder the respondent/assessee had
challenged the notice(s) issued under Sections 148/148A
of the Income Tax Act, 1961 (for short, ‘the Act’) and/or
reassessment order passed under Section 147 of the Act.
2. The above writ appeal is listed on the memo
moved by learned counsel for the appellants/Revenue and
the matter was taken up for final disposal with the consent
of learned counsel appearing for the parties.
3. Learned counsel appearing for the parties bring
to the notice of this Court the order passed by the Hon'ble
Apex Court in Civil Appeal No.4716/2026 dated
10.04.2026 reported in [2026] 185 Taxmann.com 1007
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(SC), whereunder the Hon'ble Apex Court in identical fact
situation, taking note of the amendment by way of
insertion of Section 147A into the Income Tax Act, passed
the following order:
“15. It is stated by the Learned Assistant Solicitor
General that by inserting Section 147A into the IT Act, the
term ‘Assessing Officer’ has been expressly clarified to mean
an officer other than the faceless units and the same is
deemed to have come into effect retrospectively from
01.04.2021. The said provision reads as follows:
Insertion of new section 147A.
9. After section 147 of the Income-tax Act,
the following section shall be inserted and shall be
deemed to have been inserted with effect from the
1st day of April, 2021, namely:––
“147A. Notwithstanding anything contained in
any judgement, order or decree of any court or in
section 151A or in any scheme framed thereunder,
for the removal of doubts, it is hereby clarified that
the Assessing Officer for the purposes of sections
148 and 148A shall mean and shall always be
deemed to have meant to be an Assessing Officer
other than the National Faceless Assessment
Centre or any assessment unit referred to in sub-
section (3) of section 144B.”.
16. It is also asserted that the amendment to
Section 279 of the Income Tax Act, 2025 is to bring it in
consonance with the newly inserted Section 147A of the IT
Act, thereby implying that the “Assessing Officer” for the
purposes of Sections 280 and 281 of the Income Tax Act,
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2025 shall mean to be an Assessing Officer other than the
NFAC or any assessment unit referred to in Section 273(3).
The amended Section 279 reads as follows:
71. In section 279 of the Income-tax Act,
after sub-section (2), the following sub-section
shall be inserted, namely: –– ‘(3) The “Assessing
Officer” for the purposes of sections 280 and 281
shall mean to be an Assessing Officer other than
the National Faceless Assessment Centre or any
assessment unit referred to in section 273(3).’
17. In this backdrop, where an interpretative issue
concerning the older provisions is already under
consideration, it is contended on behalf of the Appellant-
Revenue that the Parliament, from the outset, intended that
while notices could be issued by either the JAO or the Faceless
Assessing Officer (FAO), the subsequent quasi-judicial
adjudication of such notices was to be undertaken by the
FAOs.
18. It is urged that, in light of the divergent views
taken by the High Courts owing to perceived ambiguity in the
existing law, Parliament has now made the clarificatory
amendment with retrospective effect from 01.04.2021, the
date on which the original provisions came into force, and that
the alleged anomalous situation, if any, has been removed. It
was additionally submitted that the power to enact
retrospective amendments is well settled in law, and that
fresh notices will now be issued to assessees in accordance
with the clarified position, so that pending reassessment
proceedings may be concluded in accordance with law.
19. Conversely, it has been vehemently urged on
behalf of the assessees that the new Amendment is not
‘clarificatory’ in nature but is rather an abortive attempt to
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fasten penal liability retrospectively, which is impermissible
under law. It is their contention that the amending laws
having antedated civil consequences ought to be construed
strictly.
20. In all fairness, we may add that several other
contentions have also been raised by both sides, which we do
not consider it necessary to advert to at this stage in light of
the order we propose to pass. In the facts of the present
batch, we are of the considered view that it is not necessary
for this Court to examine the merits of the rival submissions
concerning the correctness of the impugned judgments or the
scope of the competing precedents at this juncture.
21. It appears to us that the assessees would be
entitled to challenge the amending provisions as elaborated
upon heretofore, for which it would only be appropriate to
relegate them to the jurisdictional High Courts. All contentions
raised before us, as well as any other grounds available to
them to question the impugned notices, may be urged before
the High Courts instead.
22. Since the High Courts have primarily quashed
the reassessment notices on the ground that the JAOs lacked
competence to initiate such proceedings, and the very
foundation of that view now stands altered by the amending
legislation, the impugned judgments in favor of the assessees
are set aside on this limited ground. The matters are
accordingly remitted to the respective High Courts for fresh
consideration. Ordered accordingly.
23. The assessees are granted liberty to amend
their writ petitions, if so advised, within a period of four (4)
weeks from the date of uploading of this order, so as to
enable them to lay challenge to Section 147A of the IT Act, as
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introduced by Act No. 4 of 2026, or to any other connected or
consequential provision.
24. Similarly, the Appellant-Revenue shall be at
liberty to file their written submissions and affidavits before
the jurisdictional High Courts within a period of three (3)
weeks thereafter.
25. No additional time shall be granted to the
parties beyond what has been granted above.
26. We make it clear that we have not expressed
any opinion on the merits of the controversy, including the
validity, scope, effect, retrospectivity or applicability of the
amended provisions, and all such questions are left open to
be decided by the High Courts.
27. Finally, during the pendency of the writ petitions
before the High Courts, there shall be an interim stay of
further assessment/reassessment proceedings pursuant to the
impugned notices, subject to such terms and conditions as
may be imposed by the High Courts.
28. The High Courts are requested to decide the
matters preferably by 30.09.2026. Learned counsel for the
parties undertake to extend full cooperation to the High
Courts in this regard. No adjournments may be granted by
the High Courts on mere asking of the parties.”
4. Learned counsel appearing for the parties seek
disposal of the above writ appeal in terms of the order
passed by the Hon'ble Apex Court, referred to above.
Further, learned counsel appearing for the
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respondent/assessee seeks liberty to lay challenge to
Section 147A of the Act in terms of the liberty granted by
the Hon'ble Apex Court.
5. Learned Senior counsel Sri.K.K.Chythanya also
brings to the notice of this Court, order dated 04.05.2026
in SLP(C).No.8682/2024 passed by the Hon'ble Apex Court
taking note of the order dated 10.04.2026 in Civil
Appeal.No.4716/2026, which reads as follows:
“ 7. Consequently, keeping in mind the reasons set
out in order dated 10.04.2026, the impugned judgment in
each appeal is set aside and the instant appeals are disposed
of by remitting the matters to the jurisdictional High Courts
for redetermination of the issues. As observed above, the
High Courts shall firstly determine whether the matters
pertain to Assessment Year 2015-16. If it is found to be so,
no further adjudicatory exercise shall be required to be
undertaken by the High Court, except to declare the notices
as being time-barred in light of Rajeev Bansal (supra).
However, if it is found that the case does not pertain to
Assessment Year 2015-16, then all the issues shall be
resolved in terms of the order dated 10.04.2026 passed in
Civil Appeal No.4716 of 2026. ”
6. Taking note of the submissions of the learned
counsel appearing for the parties as well as taking note of
the above referred orders of the Hon'ble Apex Court, we
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do not deem it fit to go into the merits of the case. We
deem it appropriate to set aside the order passed by the
learned Single Judge and remit the matter to the learned
Single Judge with liberty to the respondent/assessee to lay
challenge to Section 147A of the Act, keeping open all the
contentions of the parties, including the observations
made by the Hon'ble Apex Court in order dated
04.05.2026 in SLP(C).No.8456/2025 and Connected
Appeals.
7. Hence, the following:
ORDER
a) Writ appeal is allowed.
b) Order passed by the learned Single Judge
dated 05.12.2025 in W.P.No.36341/2025
is set aside.
c) Liberty is granted to the
respondent/assessee to lay challenge to
section 147A of the Act as introduced by
Act No.4 of 2026 or to any other
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connected or consequential provisions,
within four weeks from today.
d) The appellant/Revenue is granted three
weeks thereafter to file additional affidavit
or submission.
e) Learned Single Judge is requested to take
note of the timeline laid down by the
Hon'ble Apex Court as extracted above.
f) The interim order as granted by the
Hon’ble Apex Court would enure to the
benefit of the parties herein.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(K. V. ARAVIND)
JUDGE
VBS
List No.: 1 Sl No.: 98