2024 (5) TMI 762 - HC - Income Tax

Validity of reopening order u/s 148A - shorter period to reply to SCN - as alleged petitioners were given only six days to respond to the show-cause notice out of which there were only two working days - HELD THAT - As decided in Girdhar Gopal Dalmia v. Union of India 2022 (8) TMI 53 - CALCUTTA HIGH COURT the Department is obliged to provide the assessee at least a minimum period of seven (7) days to respond to a show-cause notice under Section 148(A) (b) of the said Act. In the present case show cause was issued on 23rd March, 2024 under Clause B of Section 148A of the said Act, calling upon the petitioners to file their response on/or before 29th March, 2024. It is not in dispute that the petitioners had only two working days to give their response. As such, the petitioners on 27th March, 2024 had sought for fifteen days time. As the petitioners were denied reasonable opportunity to appropriately respond to the show cause, thus order passed u/s 148 (A) (d) of the said Act cannot be sustained and the same is accordingly set aside - Decided in favour of assessee.

Summary

Issues involved:
The issue involved in this case is the short response period given to the petitioners in the notice dated 23rd March, 2024, issued u/s 148A of the Income Tax Act, 1961 for the Assessment Year 2018-19.

Summary:
The petitioners challenged the short response period provided to them in the notice issued under Section 148A of the Income Tax Act, 1961. The petitioners were given only six days to respond to the show-cause notice, out of which there were only two working days. The petitioners argued that they should have been given a minimum period of seven days to respond, citing a previous judgment. The respondents did not dispute the short response time but mentioned that the petitioners had submitted their response within the time frame provided. The Court noted that the petitioners had sought fifteen days to respond, but the respondents did not extend the time for uploading the response. The Court found that the petitioners were denied a reasonable opportunity to respond and set aside the order passed under Section 148(A)(d) of the Act. The petitioners were directed to submit their reply within two weeks, and a fresh order was to be passed after considering the reply and holding a personal hearing.

In conclusion, the Court held that the order passed under Section 148(A)(d) of the Income Tax Act, 1961 was not sustainable due to the lack of a reasonable opportunity for the petitioners to respond. The notice issued under Section 148 of the Act was also set aside. The petitioners were granted two weeks to submit their reply, which would be considered for a fresh order. The writ petition was disposed of with no order as to costs.