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IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Ernst And Young U.s. Llp - Appellant
Versus
Assistant Commissioner Of Income-tax - Respondent
W.P.(C) 7791 of 2022 and CM Appls. 23857-23858 of 2022
Decided On : 20-05-2022
Section 148A - Income Tax Act - The court quashed the order and notice passed under Section 148A(d) of the Income Tax Act, 1961, emphasizing the right of the assessee to adequate time to respond to the Show Cause Notice and the exclusion of the period given to the assessee in computing the period of limitation for issuance of notice under Section 148 of the Act.
Fact of the Case:
The petitioner challenged the order and notice passed under Section 148A(d) of the Income Tax Act, 1961, stating that the impugned order was passed without considering the petitioner's request for adjournment and detailed reply to the Show Cause notice.
Finding of the Court:
The court held that the petitioner-assessee has a right to adequate time to submit its reply, especially considering the provisions of Section 148A(b) and the exclusion of the period given to the assessee in computing the period of limitation for issuance of notice under Section 148 of the Act.
Issues: The issues revolved around the petitioner's right to adequate time to respond to the Show Cause Notice and the validity of the order and notice passed under Section 148A(d) of the Income Tax Act, 1961.
Ratio Decidendi: The court emphasized the right of the assessee to adequate time in accordance with the Act to submit its reply, especially considering the provisions of Section 148A(b) and the exclusion of the period given to the assessee in computing the period of limitation for issuance of notice under Section 148 of the Act.
Final Decision: The impugned order passed under Section 148A(d) and the notice under Section 148 of the Act were quashed, and the respondent was directed to pass a fresh reasoned order under Section 148A(d) after considering the petitioner's reply filed in accordance with the law within eight weeks.
JUDGMENT
Manmohan, J. (Oral). - Present writ petition has been filed challenging the order dated 13th April, 2022 passed under Section 148A(d) of the Income Tax Act, 1961 (for short 'Act') and the notice dated 13th April, 2022 passed under Section 148 of the Act.
2. Learned senior counsel for the Petitioner states that the Petitioner had been given time till 8th April, 2022 to reply to the Show Cause notice dated 30th March, 2022 as well as corrigendum dated 1st April, 2022. He further states that the impugned order under Section 148A(d) has been passed without considering the Petitioner's request for adjournment dated 09th April, 2022 as well as 12th April, 2022 and detailed reply dated 13th April, 2022 (uploaded on 14th April, 2022) to the Show Cause notice. He emphasises that the impugned order proceeds on the basis that the Petitioner did not file any reply to the Show Cause Notice.
3. Issue notice. Mr. Puneet Rai, learned counsel accepts notice on behalf of Respondents-Revenue.
4. He states that in the present case, the adjournment request had not been filed within the stipulated time i.e. till 8th April, 2022. Therefore, according to him, the Assessing Officer was well within its right to pass the order under Section 148A(d) of the Act.
5. Having heard learned counsel for the parties, this Court is of the view that the Petitioner-Assessee has a right to get adequate time in accordance with the Act to submit its reply. Section 148A(b) permits the Assessing Officer to suo moto provide up to thirty days period to an assessee to respond to the Show Cause Notice issued under Section 148A(b), which period may in fact be further extended upon an application made by the Assessee in this behalf, and such period given to the assessee is excluded in computing the period of limitation for issuance of notice under Section 148 of the Act in terms of the third proviso to Section 149 of the Act.
6. Since, in the present case, the Petitioner-Assessee is a resident of the United States of America, this Court is of the view that the delay of one day in asking for an adjournment should not have led to closure of the right to file a reply to the Show Cause Notice.
7. Consequently, the impugned order passed under Section 148A(d) as well as the notice under Section 148 of the Act, both dated 13th April, 2022, are quashed and the Respondent No.1 is directed to pass a fresh reasoned order under Section 148A(d) after considering the reply dated 13th / 14th April, 2022 filed by the Petitioner in accordance with law within eight weeks. With the aforesaid direction, the present writ petition and applications are disposed of.
The main legal point established in the judgment is the right of the assessee to adequate time to respond to the Show Cause Notice and the exclusion of the period given to the assessee in computing t....
Petitioners are entitled to adequate time to respond to tax notices, and minimal delays in requests for adjournments, especially for residents abroad, should not result in dismissal of rights.
The court affirmed that taxpayers are entitled to adequate time to respond to notices under the Income Tax Act, and failure to consider timely responses constitutes a violation of statutory duties.
The Income Tax Officer failed to comply with mandatory response time requirements, violating the petitioner's right to due process under the Income Tax Act.
Notice issued without granting statutory time to respond violated the principles of natural justice, rendering the order invalid.
Minimum time of seven days to be granted to the Assessee to file its reply to the show cause notice under Section 148A(b) of the Income Tax Act, 1961.
Statutory rights require a minimum seven-day response period under Section 148A(b) of the Income Tax Act, which was violated in this case.
A time extension request must be honored to ensure fair administrative procedure under income tax regulations.
The main legal point established in the judgment is the interpretation of the petitioner's request for extension of time and its impact on the impugned notice under Section 148 of the Income Tax Act,....
Section 148A(b) permits the Assessing Officer to suo moto provide upto thirty days period to an assessee to respond to the show cause notice.
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