Reassessment procedure and opportunity to respond led the HC to quash assessment, demand notice, and bank attachment.

Where reassessment proceeded under Section 148A(d) and a consequential Section 144 assessment was completed without the taxpayer's participation, the Karnataka HC treated the lack of effective opportunity as material and restored the matter to the Section 148A(b) stage. The petitioner's claim that it functioned as an intermediary cooperative institution lending only to members, and that its income could qualify for deduction under Section 80P, formed part of the background. The assessment order, demand notice, and bank attachment were quashed, with liberty to file a response and appear on the specified date.

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Issues: Whether the impugned assessment order, demand notice, and bank attachment were liable to be quashed and whether the proceedings under the reassessment notice could be restored to the stage of notice under Section 148A(b) of the Income-tax Act, 1961.

Analysis: The petitioner claimed that it functioned as an intermediary cooperative institution lending only to members and that its income could qualify for deduction under Section 80P of the Income-tax Act, 1961. It was also noticed that the orders under Section 148A(d) and the consequential assessment under Section 144 were passed without the petitioner's participation, and the petitioner asserted bona fide reasons for non-response. In these circumstances, and in light of the availability of a statutory opportunity at the Section 148A(b) stage, interference was warranted.

Conclusion: The assessment order, demand notice, and attachment order were quashed, and the proceedings were restored to the stage of notice under Section 148A(b) with liberty to file a response and appear on the specified date.

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