2022 (6) TMI 90 - HC - Income Tax

Validity of Reopening of assessment - notice u/s 148A(b) - no adequate time in accordance with the Act to submit the reply - petitioner states that the impugned order has been passed in violation of the principles of natural justice as it has been passed without providing adequate opportunity to the petitioner in contravention of the provisions of Section 148A of the Act to file a reply to the notice dated 17th March, 2022 issued under Section 148A(b) - Notice sent by speed post at the Delhi Address of petitioner and it is an admitted position that the petitioner is not a resident Indian and is employed in the United States of America and granted eight (8) days time to the petitioner for submitting the reply - HELD THAT - The submission of the respondent that the petitioner was served with the notice dated 17th March, 2022 on 21st March, 2022 and not on 24th march, 2022 as stated in the petition is of no consequence, since, the period of eight (8) days, if reckoned from the date of 21st March, 2022 would expire on 29th March, 2022. Therefore, even on respondent's showing the e-portal could not have been closed on 26th March, 2022. Also noticed that while in its reply-affidavit, though the respondent places heavy reliance upon the service of notice on 21st March, 2022 through speed post bearing no. ED906740645IN, however, the order passed under Section 148A(d) of the Act refers to the service of notice effected on 24th March, 2022 through speed post bearing no. ED853116135IN. The said order makes no reference to the other speed post receipt. Therefore, the Assessing Officer himself relied upon service of notice issued to the petitioner by speed post vide Consignment No. ED853116135IN, which is admittedly received by the petitioner on 24 th March, 2022 and therefore the Respondent cannot contend to the contrary in the present proceedings. Respondent has not disputed that the petitioner is a non resident and was stationed in the United States of America, when the notice was issued and received at the Delhi address. The status of the petitioner being non-resident is also duly reflected in the profile of the petitioner registered with the respondent. The notice pertains to assessment year 2015-16, and therefore accessing and collating the records for same may require reasonable time for an assessee residing abroad. In these circumstances a request for extension of time to file reply should have been considered by the Assessing Officer for granting a reasonable extension. The submission of the respondent that the Assessing Officer does not review his e-mails and therefore, the request for extension dated 27.03.2022 made through e-mail is not a valid request cannot be accepted. The communication between the Assessee and the Assessing Officer through emails is an established procedure and is evident from the documents annexed by the petitioner with the rejoinder, it is a valid means of communication used by the Assessing officer to communicate with the Petitioner. Respondent itself issues notices under Section 148A (b) to the assessee through emails and therefore a submission that if a reply or request is sent to the assessing officer on his official email address, he is not obliged to consider such email cannot be accepted. See DIVYA CAPITAL ONE PRIVATE LIMITED (EARLIER KNOWN AS DIVYA PORTFOLIO PRIVATE LIMITED) VERSUS ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 7 (1) DELHI ANR. 2022 (5) TMI 1016 - DELHI HIGH COURT Thus the impugned order dated 31st March, 2022 issued under Section 148A(d) of the Act as well as the Notice dated 31st March, 2022 issued under Section 148 of the Act for the assessment year 2015-16 are hereby quashed and the matter is remanded back to the Assessing Officer for a fresh determination. The petitioner is granted by way of a final opportunity two weeks time to file his response to the Notice under Section 148A(b) of the Act. The Assessing Officer is directed to pass a fresh reasoned order under Section 148A(d) of the Act after considering the petitioner s reply in accordance with law within eight weeks thereafter.

Summary

Issues:
Challenging order under Section 148A(d) of the Income Tax Act, 1961 and Notice issued under Section 148 for assessment year 2015-16.

Detailed Analysis:

1. The petitioner challenged the order issued under Section 148A(d) of the Income Tax Act, 1961, and the Notice issued under Section 148 for the assessment year 2015-16, alleging a violation of natural justice principles. The petitioner, a non-resident Indian employed in the United States, contended that inadequate time was provided to respond to the notice due to non-availability in India.

2. The petitioner's counsel argued that an email seeking an extension of time for responding to the notice was sent on 27th March, 2022, highlighting the petitioner's absence from India. The Assessing Officer closed the e-portal for replies on 26th March, 2022, before the deadline of 1st April, 2022, based on the notice date.

3. Referring to a previous judgment, the petitioner emphasized that the Assessing Officer should consider extension requests, especially for non-resident individuals, granting up to 30 days for a response. The petitioner's non-resident status was supported by profile records on the e-portal, challenging the respondent's claim of notice receipt on 21st March, 2022.

4. The respondent argued against the petition's maintainability, citing notice receipt on 21st March, 2022, and the non-accessibility of the petitioner's email seeking an extension before passing the impugned order. The respondent's practice of reviewing uploaded materials on the e-portal for orders under Section 148A(d) was highlighted.

5. The Court noted discrepancies in the respondent's arguments regarding the notice receipt dates and emphasized the petitioner's non-resident status during the relevant period. It directed the Assessing Officer to reconsider the case, granting the petitioner two weeks to respond to the notice under Section 148A(b) and issuing a fresh reasoned order within eight weeks, allowing supplementary notices if needed.

6. The Court's decision to quash the impugned order and remand the matter back to the Assessing Officer was based on the violation of natural justice principles, ensuring the petitioner's right to adequate time for a response. The judgment did not comment on the merits of the case, leaving all parties' rights and contentions open.