2022 (6) TMI 1447 - HC - Income Tax

Validity of reassessment proceedings - mandation of giving period being not less than seven days - as argued petitioner was not afforded adequate opportunity inasmuch as no opportunity of filing reply within seven days, as contemplated u/s 148A - HELD THAT - We notice that in the instant case, notice was issued on 23rd of March, 2022, directing the petitioner to respond on or before 30th of March, 2022. No doubt, petitioner did respond but then the obligation cast upon the officer to afford 7 clear days , as is so stipulated in the section was never afforded to the petitioner. The language of the section is unambiguously clear. There is a mandate to the officer to provide opportunity to the petitioner of filing response and such period being not less than seven days. We notice that the respondent authority passed the order on 31st of March, 2022, which also only exhibits undue haste in passing the order against the assessee. Accounting for all the attending facts and circumstances, the order dated 31.03.2022, passed by respondent no.2, namely, the Deputy/Assistant Commissioner of Income Tax, Circle-1, Patna is set aside with the authority to issue a fresh notice within 15 days in terms of Section 148 of the Income Tax Act, 1961 and complete the appropriate proceedings in accordance with law.

Summary

Issues:
1. Quashing of show cause notice under section 148A(b) of the Income Tax Act, 1961.
2. Quashing of order passed under section 148 A(d) of the Act.
3. Quashing of notice under section 148 of the Act.
4. Compliance with the provisions of Section 148A regarding the opportunity to respond within seven days.
5. Haste in passing the order by the respondent authority.
6. Reference to a decision by the Delhi High Court in a similar matter.
7. Setting aside the order passed by the Deputy/Assistant Commissioner of Income Tax.
8. Fresh notice to be issued within 15 days as per Section 148 of the Income Tax Act.
9. Requirement for the petitioner to cooperate and respond within the specified period.
10. Timeframe for the officer to pass an order.
11. Disposal of the petition and any related applications.

Analysis:
1. The petitioner sought relief in quashing the show cause notice dated 23.03.2022 issued under section 148A(b) of the Income Tax Act, 1961. The High Court found that the petitioner was not given adequate opportunity to respond within the stipulated seven days as required by the Act. The language of the section mandates the officer to provide a period of "not less than" seven days for the petitioner to file a response.

2. Additionally, the order passed under section 148 A(d) of the Act was also challenged for being issued hastily by the respondent authority on 31.03.2022. The court noted the undue haste in passing the order against the assessee, which raised concerns about procedural fairness and compliance with the Act.

3. The High Court considered a decision by the Delhi High Court in a similar case, emphasizing the importance of affording adequate opportunity to the petitioner before taking any adverse actions. The reference to the Delhi High Court's decision supported the petitioner's argument regarding the need for procedural adherence in such matters.

4. Consequently, the High Court set aside the order passed by the Deputy/Assistant Commissioner of Income Tax and directed the issuance of a fresh notice within 15 days in accordance with Section 148 of the Income Tax Act. The court emphasized the importance of following due process and completing the proceedings in accordance with the law.

5. The petitioner was required to fully cooperate and respond within the specified period as per Section 148A of the Act or the period mentioned in the notice. The officer concerned was directed to pass an order within two months from the specified timeframe to ensure timely resolution of the matter.

6. Finally, the petition was disposed of based on the above terms, and any interlocutory applications were also disposed of accordingly. The judgment highlighted the significance of procedural fairness and adherence to statutory provisions in income tax matters to uphold the principles of natural justice and due process.