Just 3 Days time to file its response to the notice u/s 148A(b) results in grave prejudice to the Assessee: Delhi High Court

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Just 3 Days time to file its response to the notice u/s 148A(b) results in grave prejudice to the Assessee: Delhi High Court

 

 

There was an interesting landmark by the Delhi High court as far as notice u/s 148A wherein a period of just 3 days was granted to the assessee to file the objection.

Section 148A of the Income Tax Act-1961 reads as under:

Conducting inquiry, providing opportunity before issue of notice under section 148.

148A. The Assessing Officer shall, before issuing any notice under section 148,—

(a)  conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;

(b)  provide an opportunity of being heard to the assessee, 1[***] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);

(c)  consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b);

(d)  decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:

Provided that the provisions of this section shall not apply in a case where,—

(a)  a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or

(b)  the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

(c)  the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 2[relate to, the assessee; or

(d)  the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.]

Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.]

 

It may be noted that section 148A(b) for blanket 7 days time period for the notice reply. Lesser time may not be in accordance with the provision of law.

 

The recent Delhi High court was as under:

Delhi High Court

Shri Sai Co-Operative Thrift And Credit Society Ltd.

Vs.

ITO, W.P.(C) 7385/2022

Delhi High court has held as under:

This Court is of the view that under Section 148A(b) of the Act, a minimum time of seven days has to be granted to the assessee to file its reply to the said show cause notice In the present case, though the petitioner responded to the show cause notice, yet it could not provide all the relevant details and documents, as the time period of three days to respond to the show cause notice was inadequate.

 

Consequently, this Court is of the view that in the present case not only there has been a violation of the mandatory time period stipulated under Section 148A(b) of the Act, but grave prejudice has been caused to the petitioner.

 

 

 

 

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