2021 (10) TMI 1427 - HC - Income Tax

Validity of reassessment proceedings - infraction of NJP (Nature Justice Principle) - writ petitioner had barely 2 hours and 3 minutes to respond to said SCN - HELD THAT - As reasonable time has not been given to the writ petitioner/Assessee to respond to said SCN much less ample or adequate time. Another facet of the matter is, the writ petitioner managed to respond (partially though) and sought for two weeks time to send the other documents, considering the nature of variation, this Court is of the considered view that it is only appropriate that the respondent should have waited for a fortnight for the writ petitioner to send in other documents which has been described as 'balance documents' under cover of letter of writ petitioner dated 27.09.2021. This Court has not expressed any opinion or view at this juncture on the request for reason for reopening made by writ petitioner which is GKN Driveshafts principle/route 2002 (11) TMI 7 - SUPREME COURT This is left to the wisdom and discretion of the respondent at this juncture. This Court is of the considered view that this is a appropriate and a fit case for sending the matter back to respondent for redoing/doing de novo assessment from said SCN stage.

Summary

Issues:
Assessment order under Section 144 read with Section 147 of the Income-tax Act, 1961 for Assessment year 2016-2017 challenged for inadequate time to respond to show cause notice (SCN).

Analysis:

The main writ petition challenged an assessment order dated 29.09.2021 under Section 144 read with Section 147 of the Income-tax Act, 1961 for Assessment year 2016-2017. The petitioner raised concerns about the show cause notice (SCN) dated 24.09.2021 issued under Section 142(1) of the IT Act, highlighting the limited time given for response. The petitioner received the SCN on a Friday and had only 2 hours and 3 minutes to respond by the following Monday morning, which was deemed insufficient. The petitioner managed to send a partial reply and requested two weeks to submit the remaining documents. Despite this, the impugned order was passed on 29.09.2021, causing an alleged violation of the Nature Justice Principle (NJP) as per the petitioner's argument.

The court considered the adequacy of time granted for responding to the SCN and whether it amounted to a breach of the NJP principle. It was noted that while the SCN was validly issued under Section 142(1) of the IT Act, the issue lay in the sufficiency of the time provided for response. The court opined that the petitioner should have been given more time, especially considering the request for an additional two weeks to submit the remaining documents. The court did not delve into the request for reasons for reopening made by the petitioner, leaving it to the discretion of the respondent.

In light of the above considerations, the court decided that the matter warranted sending back to the respondent for a fresh assessment from the stage of the SCN. The court set aside the impugned order solely on the grounds of inadequate time given for responding to the preceding SCN dated 24.09.2021. The petitioner was directed to submit the remaining documents and complete the reply within a fortnight. The respondent was instructed to redo the assessment and issue a new assessment order within six weeks, addressing the request for reasons for reopening within the same timeframe. The court clarified that it had not expressed any opinion on the merits of the case in this order.

Consequently, the main Writ Petition was disposed of with the outlined directives, and the related miscellaneous petition was closed without any order as to costs.