2022 (12) TMI 115 - HC - Income Tax

Reopening of assessment u/s 147 - notices u/s 148A - period of limitation - minimum 7 days time has to be granted to the assessees to reply to the show cause notices - HELD THAT - This is not a case were the proceedings are bared by limitation even if the date of receipt of notice is determined to be any other date other than 25-03-2022. The petitioners have a statutory right to reply to the notices within 7 days of its receipt. Though there is substantial merit in the contention taken by the learned counsel for the department that the notices having been sent to the registered Email Ids of the assessees on 25-03-2022 that, must be taken as a relevant date, opinion that no prejudice will be caused to the department by affording an opportunity to the petitioners to reply to the show cause notice within a period of 7 days. In the result Ext.P3 order in both cases will stand set aside and the officer concerned shall take a fresh decision in the matter after giving 7 days time to the petitioners to reply to the show cause notice. The petitioners shall submit their replies on or before07-06-2022 and a fresh decision shall be taken thereafter in accordance with law.

Summary

Issues:
1. Sufficiency of time granted to assessees to reply to show cause notices under Section 148 of the Income Tax Act.

Analysis:
The petitioners, who are assessees under the Income Tax Act, were issued notices under Section 148 A, requiring them to show cause as to why reassessment proceedings should not be initiated against them. The notices were dated 25-03-2022, with differing deadlines for response in each case. The petitioners argued that they did not receive sufficient time to reply to the notices, as they received them after the specified deadlines. The counsel for the petitioners contended that a minimum of 7 days must be granted to reply to such notices, emphasizing the actual receipt date of the notices by the assessees.

The standing counsel representing the Income Tax Department opposed granting any relief, asserting that the notices were uploaded in the system and sent to the assessees' registered Email Ids on 25-03-2022 itself. Despite the physical copies being received later, the counsel argued that the notices were effectively served on the specified date. While acknowledging the merit in the department's argument regarding the notices being sent to Email Ids on time, the court held that the assessees should be given a fair opportunity to reply within the statutory 7-day period. The court concluded that granting 7 days from the actual receipt date would not prejudice the department, setting aside the previous order and directing the officer to allow the assessees to reply within 7 days.

In light of the above analysis, the court decided to dispose of the writ petitions accordingly, emphasizing the importance of providing assessees with adequate time to respond to show cause notices under Section 148 of the Income Tax Act. The court's decision aimed to uphold the assessees' statutory right to reply within the stipulated timeframe, ensuring a fair and just process in reassessment proceedings.