The GAAR reference in my case was made inside a reassessment. If I succeed in getting the s.148A(d) order and the s.148 notice set aside, do the s.144BA notices go too, or do I have to fight them separately?
They go with it. In a writ petition in which the Revenue itself accepted, through the Additional Solicitor General, that the matter should be remanded to the stage before the s.148 notice because the principles of natural justice had been violated, the Karnataka High Court set aside the s.148A(d) order and the s.148 notice, both dated 31 March 2022, and then quashed "all actions initiated pursuant to the above under Section 142(2A), Section 144BA(1) and Section 144BA(2) of the Act, being consequential" — naming a notice dated 21 March 2023, an order dated 30 March 2023, a notice dated 24 March 2023 for invocation of Chapter X-A and a further notice dated 26 April 2023. The matter was remanded to the Assessing Officer to begin again from the s.148A(b) stage, with thirty days to reply, and all contentions of both parties kept open.
Decided by the High Court (S. Sunil Dutt Yadav J) on 2023-05-31, reported as Writ Petition No. 8814 of 2023 (T-IT), High Court of Karnataka at Bengaluru; no law-report citation traced. It bears on section 144BA, section 144BA(1), section 144BA(2), section 148, section 148A(b), section 148A(d), section 142(2A), section 95 of the Income Tax Act 1961, in Reassessment & Reopening, Assessment & Scrutiny and Appeals matters.
The practical lesson is about sequence. A GAAR reference does not stand on its own feet: s.144BA(1) permits it only "at any stage of the assessment or reassessment proceedings before him", so it is parasitic on a valid assessment or reassessment proceeding. If the proceeding in which it was made is set aside, the reference and everything issued under it are consequential and fall with it, and a taxpayer does not have to mount a separate attack on the Chapter X-A machinery. That reverses the natural order of argument: in a case where the reassessment is itself vulnerable — a s.148A(b) notice that did not put the material to the taxpayer, a s.148A(d) order passed without dealing with the reply — the reassessment point should be taken first and the GAAR point kept in reserve, because winning the first disposes of the second without the taxpayer ever having to argue commercial substance. The order also shows how far into the machinery a case can travel before the foundation is examined: the reassessment notice was of 31 March 2022 and the s.144BA(1) notice invoking Chapter X-A was of 24 March 2023, almost a year later. Two limits must be stated plainly. This is a short order of four paragraphs made on the Revenue's own concession, which the petitioner accepted; the Court decided nothing about GAAR and expressly kept all contentions open. And a remand from the s.148A(b) stage means the Revenue may do the whole thing again properly, GAAR reference included.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner challenged an order dated 31 March 2022 under s.148A(d) and a notice of the same date under s.148, together with everything that had followed from them. Among the consequential proceedings were a notice dated 21 March 2023 and an order dated 30 March 2023, a notice dated 24 March 2023 issued under s.144BA(1) by the second respondent "for invocation of Chapter X-A of the Income Tax Act, 1961", and a further notice dated 26 April 2023, together with action under s.142(2A) and under s.144BA(2). At the hearing on 25 May 2023 the Additional Solicitor General appearing for the Revenue submitted that the respondents would have no objection to the matter being remanded to the stage prior to the issuance of the s.148 notice, for fresh adjudication from the s.148A(b) stage, in light of a violation of the principles of natural justice. The petitioner consented to that course.
The order dated 31 March 2022 under s.148A(d) and the notice of the same date under s.148 were set aside, and all actions initiated pursuant to them under s.142(2A), s.144BA(1) and s.144BA(2) — the notice dated 21 March 2023, the order dated 30 March 2023, the notice dated 24 March 2023 and the notice dated 26 April 2023 — were "consequentially quashed" (paragraph 4, sub-paragraphs (a) and (b)). The matter was remanded to the Assessing Officer to hear it afresh from the s.148A(b) stage initiated by the notice dated 22 March 2022, with thirty days to the assessee to file its reply, after which the Department was to consider the reply afresh and a fresh order under s.148A(d) might be passed in accordance with law (sub-paragraphs (c) to (f)). All rights of the assessee under law were to remain available (sub-paragraph (g)), all contentions of both parties were kept open, and the writ petition was disposed of.
The order contains no independent reasoning. It was passed on the Revenue's submission, recorded at paragraph 2, that it had no objection to a remand to the stage prior to the s.148 notice "in light of violation of principles of natural justice", and on the petitioner's consent recorded at paragraph 3. The operative reasoning on the Chapter X-A material is contained in the single word "consequential": the s.142(2A), s.144BA(1) and s.144BA(2) actions were quashed because they had been initiated pursuant to the s.148A(d) order and s.148 notice that were being set aside.
All actions initiated pursuant to the above under Section 142(2A), Section 144BA(1) and Section 144BA(2) of the Act, being consequential, impugned notice dated 21.03.2023 and order dated 30.03.2023; notice dated 24.03.2023 and notice dated 26.04.2023 bearing Nos. ITBA/COM/F/17/2023-24/1052370469(1) and No. ITBA/COM/F/17/2023-24/1052350581(1) are consequentially quashed.
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Handle my notice → Ask a CA on WhatsAppThey go with it. In a writ petition in which the Revenue itself accepted, through the Additional Solicitor General, that the matter should be remanded to the stage before the s.148 notice because the principles of natural justice had been violated, the Karnataka High Court set aside the s.148A(d) order and the s.148 notice, both dated 31 March 2022, and then quashed "all actions initiated pursuant to the above under Section 142(2A), Section 144BA(1) and Section 144BA(2) of the Act, being consequential" — naming a notice dated 21 March 2023, an order dated 30 March 2023, a notice dated 24 March 2023 for invocation of Chapter X-A and a further notice dated 26 April 2023. The matter was remanded to the Assessing Officer to begin again from the s.148A(b) stage, with thirty days to reply, and all contentions of both parties kept open. This was decided by the High Court (S. Sunil Dutt Yadav J) and bears on section 144BA, section 144BA(1), section 144BA(2), section 148, section 148A(b), section 148A(d), section 142(2A), section 95 of the Income Tax Act 1961. It is reported as Writ Petition No. 8814 of 2023 (T-IT), High Court of Karnataka at Bengaluru; no law-report citation traced. The practical lesson is about sequence. A GAAR reference does not stand on its own feet: s.144BA(1) permits it only "at any stage of the assessment or reassessment proceedings before him", so it is parasitic on a valid assessment or reassessment proceeding. If the proceeding in which it was made is set aside, the reference and everything issued under it are consequential and fall with it, and a taxpayer does not have to mount a separate attack on the Chapter X-A machinery. That reverses the natural order of argument: in a case where the reassessment is itself vulnerable — a s.148A(b) notice that did not put the material to the taxpayer, a s.148A(d) order passed without dealing with the reply — the reassessment point should be taken first and the GAAR point kept in reserve, because winning the first disposes of the second without the taxpayer ever having to argue commercial substance. The order also shows how far into the machinery a case can travel before the foundation is examined: the reassessment notice was of 31 March 2022 and the s.144BA(1) notice invoking Chapter X-A was of 24 March 2023, almost a year later. Two limits must be stated plainly. This is a short order of four paragraphs made on the Revenue's own concession, which the petitioner accepted; the Court decided nothing about GAAR and expressly kept all contentions open. And a remand from the s.148A(b) stage means the Revenue may do the whole thing again properly, GAAR reference included. If it applies to you, the first step is this: Check the proceeding the GAAR reference sits inside. Section 144BA(1) permits a reference only at a stage of an assessment or reassessment proceeding, so identify the notice that opened that proceeding and test its validity first.
The petitioner challenged an order dated 31 March 2022 under s.148A(d) and a notice of the same date under s.148, together with everything that had followed from them. Among the consequential proceedings were a notice dated 21 March 2023 and an order dated 30 March 2023, a notice dated 24 March 2023 issued under s.144BA(1) by the second respondent "for invocation of Chapter X-A of the Income Tax Act, 1961", and a further notice dated 26 April 2023, together with action under s.142(2A) and under s.144BA(2). At the hearing on 25 May 2023 the Additional Solicitor General appearing for the Revenue submitted that the respondents would have no objection to the matter being remanded to the stage prior to the issuance of the s.148 notice, for fresh adjudication from the s.148A(b) stage, in light of a violation of the principles of natural justice. The petitioner consented to that course. The matter was decided on 2023-05-31 by the High Court (S. Sunil Dutt Yadav J). On those facts the High Court held as follows. The order dated 31 March 2022 under s.148A(d) and the notice of the same date under s.148 were set aside, and all actions initiated pursuant to them under s.142(2A), s.144BA(1) and s.144BA(2) — the notice dated 21 March 2023, the order dated 30 March 2023, the notice dated 24 March 2023 and the notice dated 26 April 2023 — were "consequentially quashed" (paragraph 4, sub-paragraphs (a) and (b)). The matter was remanded to the Assessing Officer to hear it afresh from the s.148A(b) stage initiated by the notice dated 22 March 2022, with thirty days to the assessee to file its reply, after which the Department was to consider the reply afresh and a fresh order under s.148A(d) might be passed in accordance with law (sub-paragraphs (c) to (f)). All rights of the assessee under law were to remain available (sub-paragraph (g)), all contentions of both parties were kept open, and the writ petition was disposed of.
The order contains no independent reasoning. It was passed on the Revenue's submission, recorded at paragraph 2, that it had no objection to a remand to the stage prior to the s.148 notice "in light of violation of principles of natural justice", and on the petitioner's consent recorded at paragraph 3. The operative reasoning on the Chapter X-A material is contained in the single word "consequential": the s.142(2A), s.144BA(1) and s.144BA(2) actions were quashed because they had been initiated pursuant to the s.148A(d) order and s.148 notice that were being set aside. In the words reproduced by the source cited on this page: "All actions initiated pursuant to the above under Section 142(2A), Section 144BA(1) and Section 144BA(2) of the Act, being consequential, impugned notice dated 21.03.2023 and order dated 30.03.2023; notice dated 24.03.2023 and notice dated 26.04.2023 bearing Nos. ITBA/COM/F/17/2023-24/1052370469(1) and No. ITBA/COM/F/17/2023-24/1052350581(1) are consequentially quashed."
It was decided by the High Court on 2023-05-31 and is reported as Writ Petition No. 8814 of 2023 (T-IT), High Court of Karnataka at Bengaluru; no law-report citation traced. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 144BA, section 144BA(1), section 144BA(2), section 148, section 148A(b), section 148A(d), section 142(2A), section 95, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The order dated 31 March 2022 under s.148A(d) and the notice of the same date under s.148 were set aside, and all actions initiated pursuant to them under s.142(2A), s.144BA(1) and s.144BA(2) — the notice dated 21 March 2023, the order dated 30 March 2023, the notice dated 24 March 2023 and the notice dated 26 April 2023 — were "consequentially quashed" (paragraph 4, sub-paragraphs (a) and (b)). The matter was remanded to the Assessing Officer to hear it afresh from the s.148A(b) stage initiated by the notice dated 22 March 2022, with thirty days to the assessee to file its reply, after which the Department was to consider the reply afresh and a fresh order under s.148A(d) might be passed in accordance with law (sub-paragraphs (c) to (f)). All rights of the assessee under law were to remain available (sub-paragraph (g)), all contentions of both parties were kept open, and the writ petition was disposed of. It arises in Reassessment & Reopening, Assessment & Scrutiny and Appeals matters, on section 144BA, section 144BA(1), section 144BA(2), section 148, section 148A(b), section 148A(d), section 142(2A), section 95 of the Income Tax Act 1961, and was decided by S. Sunil Dutt Yadav J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the reassessment is defective, plead the s.144BA notices as consequential rather than attacking them independently. That is how they were quashed here. List every consequential action by date in the prayer — the s.142(2A) direction, the s.144BA(1) notice, the s.144BA(2) notice, and any order made on them — because the Court quashed them by reference to their dates. Advise the client that a remand is not a victory on GAAR. The Revenue can restart from the s.148A(b) stage and make a fresh reference; what has been won is the natural-justice point and the time. Do not cite this order for any proposition about Chapter X-A itself. It was passed on the Revenue's concession on natural justice and all contentions were kept open.
Searched for later treatment; none was found. That is not the same as a source affirming it. A citator search on citedby:172509518 returns nothing. A second search for "Manipal Education and Medical Group" together with "144BA" returns this judgment alone. No later decision applies, doubts or distinguishes it, and no special leave petition surfaced. That is worth knowing: reported GAAR litigation is thin, and this remains one of the few High Court judgments on a s.144BA reference, but it has not yet been tested. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
A SHORT ORDER MADE ON CONCESSION, and its precedential weight is correspondingly small. It runs to four numbered paragraphs — established by having the first line of every numbered paragraph transcribed in sequence, which ended at paragraph 4 — with the operative directions set out as lettered sub-paragraphs (a) to (g) within paragraph 4. Paragraph 2 records that at the hearing on 25 May 2023 the Additional Solicitor General for the Revenue submitted that the respondents would have no objection to the matter being remanded to the stage prior to the issuance of the s.148 notice for fresh adjudication from the s.148A(b) stage "in light of violation of principles of natural justice", and paragraph 3 records the petitioner's consent. The Court therefore made no finding of its own on natural justice and none at all on Chapter X-A, and the order closes with "All contentions of both the parties are kept open." The words "impermissible avoidance arrangement" do not appear anywhere in the document; the Chapter X-A material is in the relief sought at paragraph 1(F), which describes the impugned notice dated 24 March 2023 as issued under s.144BA(1) "for invocation of Chapter X-A of the Income Tax Act, 1961". I did not check whether this order has been appealed or whether fresh proceedings followed the remand. No law-report citation was traced. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The order dated 31 March 2022 under s.148A(d) and the notice of the same date under s.148 were set aside, and all actions initiated pursuant to them under s.142(2A), s.144BA(1) and s.144BA(2) — the notice dated 21 March 2023, the order dated 30 March 2023, the notice dated 24 March 2023 and the notice dated 26 April 2023 — were "consequentially quashed" (paragraph 4, sub-paragraphs (a) and (b)). The matter was remanded to the Assessing Officer to hear it afresh from the s.148A(b) stage initiated by the notice dated 22 March 2022, with thirty days to the assessee to file its reply, after which the Department was to consider the reply afresh and a fresh order under s.148A(d) might be passed in accordance with law (sub-paragraphs (c) to (f)). All rights of the assessee under law were to remain available (sub-paragraph (g)), all contentions of both parties were kept open, and the writ petition was disposed of.
TaxSphere, “Manipal Education and Medical Group India Pvt Ltd v ACIT — where the s.148 reassessment falls, the s.144BA(1) and (2) GAAR notices issued inside it fall with it as consequential”, https://taxnotice.vittsphere.com/caselaw/case/manipal-education-144ba-reference-and-notices-quashed-as-consequential-to-a-set-aside-148a-d-order/ (validity last checked 2026-09-09)
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