2023 (12) TMI 812 - HC - Income Tax

Reopening of assessment - shorter period granted to file reply to SCN - grievance of the petitioner is that when he logged on at the income tax portal for filing the reply to SCN he found that the e-reply was already closed and finally an order u/s 148A(d) was passed by the respondent No.2 - HELD THAT - From bare perusal of Section 148A(b) it appears that minimum 7 days is required to be given to the Assessee for filing reply. This 7 day is to be calculated by ignoring the date of issue and the last date of submission. In other words, minimum 7 clear days has to be provided to the Assessee for filing reply. Thus, we see that the law is no more res-integra; inasmuch as, the words not be less than 7 days implies that clear seven days is obligatory to be given to the Assessee. Thus, on the one hand the notice which was given to the petitioner u/s 148A(b) was not in accordance with the provision of the Act, inasmuch as, only 6 clear days was given to him. So, on this score alone the notice u/s 148A(b) deserves to be quashed and set aside. From bare perusal of Annexure-3 which is the screenshot of e-proceeding clearly indicates that on 26.03.2023 itself, e-submission was closed, thus the petitioner was prevented from submitting his reply online. The argument of revenue that it was the duty of the petitioner to approach the concerned authority is misconceived and without any basis and is fit to be rejected inlimine in view of the specific provision made under the Act itself. Thus, the impugned orders requires interference. Reopening order and notices set aside.

Summary

Issues involved:
The issues involved in the judgment are the quashing of an order passed under clause (d) of Section 148A of the Income Tax Act, 1961 and the consequential notices issued under Section 148 for the Assessment Year 2016-17 due to discrepancies in the timeline for filing a reply by the petitioner.

Issue 1: Timeline for filing reply under Section 148A(b) of the Act
The petitioner, an old income tax assessee, filed his income tax return for the assessment year 2016-17 showing total income of Rs. 2,69,380/- which was accepted under Section 143(1) of the Income Tax Act, 1961. A show-cause notice under section 148(A)(b) was issued for the same assessment year, requiring an e-reply by a specified date. The petitioner's grievance arose when he found that the e-reply option was closed before the specified date, leading to the passing of an order under Section 148A(d) by the respondent.

Issue 2: Compliance with statutory provisions
The petitioner argued that the timeline provided for filing a reply under Section 148A(b) was not adhered to, as only 6 clear days were given instead of the mandatory 7 days. The Court referred to the provisions of the Act which specify that a minimum of 7 clear days must be provided to the Assessee for filing a reply. It was noted that the notice given to the petitioner did not comply with this requirement, leading to the quashing of the notice and subsequent orders.

Conclusion:
The High Court quashed the impugned order and consequential notices for the Assessment Year 2016-17, remitting the matter back to the respondent to allow the petitioner to file a reply with a minimum of 7 clear days notice and not more than 30 days. The Court emphasized the importance of complying with statutory timelines and providing adequate opportunity to the Assessee for filing replies in accordance with the law.