2022 (9) TMI 197 - HC - Income Tax

Validity of Reopening of assessment u/s 147 - sufficient time as per Section 148A(b) - whether respondent authority has not given sufficient time as per Section 148A(b)? - assessing authority can grant time from 7 to 30 days - HELD THAT - As legislature has given time schedule to assessing authority from 7 days to 30 days, as such, there is no impediment on part of assessing authority to grant such time between 7 to 30 days, as the assessing authority has not considered the request of the petitioner for grant of 30 days time and also not assigned any reason why he has given the time prescribed under the Act, 1961 i.e. 7 to 30 days, considering the law laid down by Hon'ble High Court of Delhi in Ester Industries Ltd. 2022 (6) TMI 245 - DELHI HIGH COURT the impugned order dated 30.03.2022 (Annexure P/4) under clause (d) of Section 148A is set aside. The petitioner is directed to submit clarification within 15 days from today. Till the assessing authority passed order considering the clarification of the petitioner within 15 days and passed order under clause (d) of Section 148A of the Act, 1961, the notice dated 17.03.2022 (Annexure P/1) issued under Section 148A (a) of the Income Tax Act, 1961, shall not be given effect. Respondents are directed to open the e-portal to enable the petitioner to upload its reply. In the event, the assessing officer wants clarification or would like the petitioner's response to any specific information received by the revenue, it shall be open to give the supplementary notice - Also directed to pass a reasoned order within eight weeks after duly considering the reply filed by the respondent.

Summary

Issues:
1. Assailing various notices issued under the Income Tax Act, 1961.
2. Granting of time to submit clarification by the assessing authority.
3. Interpretation of Section 148A of the Income Tax Act, 1961.
4. Comparison with judgments from other High Courts.
5. Maintainability of the petition.

Analysis:

1. The petitioner challenged multiple notices issued under the Income Tax Act, 1961, including those under Section 148A(a), 148A(b), 148A(d), and 142(1). The petitioner contended that the assessing authority did not grant sufficient time for response as per Section 148A(b) and proceeded to pass orders without considering the petitioner's request for an extended period.

2. The petitioner argued that Section 148A(b) allows the assessing authority to provide up to thirty days for the assessee to respond to a show cause notice. Citing a judgment from the High Court of Delhi, the petitioner emphasized the importance of granting adequate time for a response and highlighted the violation of Section 148A(b) due to the lack of consideration by the assessing authority.

3. The court examined Section 148A of the Income Tax Act, 1961, which outlines the procedure for conducting inquiries and providing opportunities before issuing notices under Section 148. The court noted that the legislature has provided a time frame of 7 to 30 days for the assessing authority to grant for response, emphasizing the discretionary power of the authority within this range.

4. Referring to a judgment from the High Court of Punjab and Haryana, the respondent argued against the petitioner's claim for a mandatory 30-day period, asserting that the assessing authority has the discretion to determine the appropriate time frame for response. The respondent highlighted the dismissal of a similar petition by the Supreme Court, challenging the maintainability of the current petition.

5. The court, after considering the arguments and provisions of Section 148A, concluded that the assessing authority had not properly considered the petitioner's request for an extended time period. Following the precedent set by the High Court of Delhi, the court set aside the impugned order and directed the petitioner to submit clarification within 15 days. The respondents were instructed to enable the petitioner to upload its reply and pass a reasoned order within eight weeks, leaving the final decision to the assessing authority in accordance with the law.

This comprehensive analysis covers the issues raised in the legal judgment, providing a detailed breakdown of the arguments presented by both parties and the court's decision based on the interpretation of relevant legal provisions and precedents.