2022 (6) TMI 84 - HC - Income Tax

Reopening of assessment - undue haste in passing the order - Notice u/s 148A - petitioner therein was denied effective opportunity to file reply - HELD THAT - As reply was uploaded online by the assessee on 21st March, 2022 and the time limit for filing the reply in terms of notice expired on 18th March, 2022 which was a public holiday and the following two days namely, 19th March, 2022 and 20th March, 2022 were Saturday and Sunday. Therefore, the next working day was 21st March, 2022. It appears that the assessing officer is not aware of the provisions of the General Clauses Act and, therefore, needs to be appraised of the same. Thus, we have no hesitation to hold that the assessing officer acted in great haste and virtually reduced the procedure under the amended provision to a nullity. We have queried the learned Advocate appearing for the assessee as to whether the assessment was getting time-bared. The prompt reply was that the power to re-assess is available to the authority till the year 2023 if permissible under law. Therefore, we fail to understand as to what was the great hurry on the part of the assessing officer, Sri Niladri Kumar Ghosh to pass the order dated 23rd March, 2022 by ignoring the reply given by the assessee and uploaded in the department's portal on 21st March, 2022. The other officers who are also similarly placed should not reduce the provisions of the Act in an empty formality, we are inclined to impose cost on the authority to serve as a deterrent. For all the above reasons, the appeal is allowed and the order dated 23rd March, 2022 passed under Section 148A(d) and the notice dated 11th March 2022 are quashed and the matter is remanded to the assessing officer to take note of the reply given by the assessee dated 21st March, 2022 and consider the same. According to the learned Advocate for the appellant, the assessee sought for certain information. Hence, this reply should be considered in a meaningful manner and action be initiated in accordance with the law. There will be an order directing the respondent/department to pay costs of Rs. 15,000/- to the West Bengal State Legal Services Authority within three days from the date of which the server copy is made available. Consequently, the order passed in the writ petition is set aside and the writ appeal is allowed and the order dated 23rd March, 2022 as well as the notice issued under Section 148 of the Act dated 11th March, 2022 are quashed.

Summary

Issues:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 for not filing objection within stipulated time.

Analysis:
The High Court of Calcutta heard an intra Court appeal challenging the order dated 7th April, 2022 in WPO/1943/2022 where the appellant contested the order dated 23rd March, 2020 under Section 148A(d) of the Income Tax Act, 1961. The Court noted that the assessing officer acted hastily, as the appellant's response was uploaded on 21st March, 2022, after a notice on 18th March, 2022, which was a public holiday. The Court emphasized that a reasonable interpretation should be given to statutory provisions to ensure a meaningful opportunity for the appellant. The Court rejected the argument that the appellant should have requested an extension, as filing the reply online on 21st March, 2022 was deemed as seeking an extension. The Court distinguished the case from a Supreme Court decision cited by the revenue, emphasizing that they were dealing with an aggrieved assessee, not a public interest litigation.

The Court referred to a Delhi High Court decision with similar facts, highlighting the importance of providing adequate time for the assessee to respond. The Court emphasized that the assessing officer's actions were in haste and violated principles of natural justice. The Court noted that the assessing officer's approach was narrow and hasty, reducing the amended provision to a nullity. The Court questioned the rush in passing the order on 23rd March, 2022, especially when the reply was uploaded on 21st March, 2022. To deter similar actions in the future, the Court imposed a cost on the authority and remanded the matter to consider the appellant's reply. The Court set aside the order dated 23rd March, 2022, and the notice issued under Section 148 of the Act dated 11th March, 2022.

After dictating the order, the Court considered a prayer from the department's standing counsel to not impose costs, agreeing to delete that portion of the direction. The Court allowed the appeal, quashing the order and the notice issued under Section 148 of the Act.

This detailed analysis showcases the Court's thorough examination of the case, emphasizing the importance of providing a meaningful opportunity to the appellant and ensuring procedural fairness in tax matters.