2024 (5) TMI 704 - HC - Income Tax

Validity of assessment order passed u/s 144B - petitioner contended that time granted for submitting reply to the show-cause notice of a period less than four days - as submitted petitioner was ready with the reply and had filed the same on the same day at 11 39 p.m. through the NFAC, but in view of the fact the AO had closed the e-filing portal by then on the ground that the petitioner had not submitted the reply by 15 45 p.m. on 24.04.2023, the same could not be uploaded - HELD THAT - This Court is of the opinion that the time granted for submitting reply to the petitioner is extremely short, and when there was no undue delay on the part of the petitioner in submitting the reply and it had submitted the reply on the date fixed i.e. 24.03.2024, though sometime after 15 45 p.m. the same ought not to have been ignored by respondent no. 2 and, the impugned order could not have been passed by him. Therefore, the counsel for the Department was asked to ascertain response of respondent no. 2 and matter was posted for today. Thus matter is remitted back to respondent no. 2 to consider the reply submitted by the petitioner on 24.03.2024 and 25.03.2024 to the show-cause notice dt. 20.03.2024 and then pass a reasoned order in accordance with law and communicate the same to the petitioner.

Summary

Issues involved:
The issues involved in this case are related to the time granted for submitting a reply to a show-cause notice under the Income Tax Act, 1961 and the subsequent passing of an order under Sections 143(3) read with Section 144B of the Act without considering the reply submitted by the petitioner.

Detailed Summary:

Issue 1: Time granted for submitting reply to show-cause notice
The petitioner, a private limited company engaged in pharmaceutical manufacturing, filed a return u/s 139(1) for the assessment year 2022-23. Subsequently, notices u/s 142(1) were issued, and on 20.03.2024, a show-cause notice was received by the petitioner, requiring a reply by 24.03.2024. The petitioner submitted the response on 24.03.2024, but the Assessing Officer closed the e-filing portal, preventing the upload. The Court found the time granted for the reply to be extremely short, and despite the petitioner submitting the reply on the due date, the Assessing Officer ignored it, leading to the passing of the impugned order.

Issue 2: Passing of order without considering submitted reply
Respondent no. 2 passed an order under Sections 143(3) read with Section 144B of the Act on 27.03.2024 without considering the reply submitted by the petitioner. The Court held that the petitioner was not granted reasonable time to reply, and as there was no undue delay in submitting the response, the impugned order was set aside. The matter was remitted back to respondent no. 2 to consider the petitioner's reply and pass a reasoned order in accordance with the law.

The Writ petition was allowed, no costs were imposed, and pending miscellaneous applications were disposed of.

This summary highlights the issues of inadequate time granted for reply submission and the passing of an order without considering the petitioner's response, leading to the court setting aside the order and remitting the matter for proper consideration and decision.