2023 (2) TMI 1136 - HC - Income Tax

Validity of Reopening of assessment - shorter period to the petitioner to submit a response as less than the mandatory period, i.e., seven days - minimum statutory timeframe, as indicated in clause (b) of Section 148A - HELD THAT - A notice dated 10.03.2022, with an Annexure appended thereto, which is digitally signed on 11.03.2022. The instructions conveyed unequivocally establish that the notice dated 10.03.2022 was dispatched twice. The notice dated 10.03.2022, concededly, required the petitioner to file its response on or before 17.03.2022 . Thus undoubtedly the statutory requirement of giving seven (7) clear days for filing the response was not met. We are in agreement that ratio of the judgment in Commissioner of Income-tax v. Braithwaite Co. Ltd 1993 (3) TMI 90 - SUPREME COURT would be applicable in the instant case, as the language of the provisions considered by the Supreme Court in that judgment is pari materia with the language used in clause (b) of Section 148A of the Act. Best course forward would be to set aside the impugned order passed under Section 148A(d) of the Act, and the consequent notice dated 31.03.2022 issued under Section 148 of the Act. Decided in favour of assessee.

Summary

Issues involved:
Interpretation of the mandatory period for filing a reply to a notice under Section 148A(b) of the Income Tax Act, 1961.

Detailed Analysis:
The case involved a dispute regarding the timeframe provided to the petitioner for filing a reply to a notice issued under Section 148A(b) of the Income Tax Act, 1961. The petitioner argued that the period granted for response was less than the mandatory period of seven days as required by the Act. The petitioner contended that the statutory timeframe should commence from the date of issuance of the notice, extending the time required to be granted beyond the specified deadline of 17.03.2022. The petitioner relied on the judgment of the Supreme Court in Commissioner of Income-tax v. Braithwaite & Co. Ltd (1993) to support their interpretation of the statutory provision.

The respondent, represented by the senior standing counsel, argued that the notice in question was dispatched twice, first without digital signatures on 10.03.2022 and then with digital signatures on 11.03.2022. The court noted that the notice dated 10.03.2022, which required a response by 17.03.2022, did not meet the statutory requirement of providing seven clear days for filing a response. Both parties agreed that the judgment in Commissioner of Income-tax v. Braithwaite & Co. Ltd (1993) was applicable to the case due to the similarity in language with the provision in question.

As a result, the court decided to set aside the impugned order passed under Section 148A(d) of the Act and the consequent notice issued under Section 148 of the Act. The Assessing Officer was directed to pass a fresh order and provide all relevant information/material in their possession for the reassessment proceedings. The petitioner was granted the opportunity to file a supplementary reply within two weeks of receiving the information. Additionally, the authorized representative of the petitioner was to be accorded a personal hearing by the Assessing Officer. The court clarified that the decision would not impact the merits of the case and disposed of the writ petition accordingly.

In conclusion, the judgment highlighted the importance of adhering to statutory timelines for responding to notices under the Income Tax Act, ensuring procedural fairness and compliance with legal requirements.