Insufficient time provided to respond to a complex show cause notice violates principles of natural justice, warranting the reassessment of the proceedings.

JUDGMENT

Manmohan, J. (Oral)

CM APPL.19432/2022 (exemption)

Exemption allowed subject to all just exceptions.

Accordingly, the application stands disposed of.

W.P.(C) 6417/2022 & CM APPL. 19431/2022 (stay)

1. Present writ petition has been filed challenging the Assessment Order dated 31st March, 2022, passed under Section 143(3) read with Section 153A of the Income Tax Act, 1961 (hereinafter referred to as `the Act') for Assessment Year 2019-20.

2. Learned counsel for the petitioner states that the respondent No.1 while passing the said impugned order, made additions totalling to Rs.14.75 crores primarily on the ground that the petitioner had failed to file reply to the show cause notice issued by the respondent No.1 on 21st March, 2022 around midnight. He states that the said show cause notice was served upon the petitioner via e-mail asking the petitioner to respond to the said notice by 3:45 pm on the very next day, i.e. 23rd March, 2022.

3. Learned counsel for the petitioner states that by way of the said show cause notice running into 92 pages, the petitioner was directed to provide various documents for the first time during the assessment proceedings. He states that the said documents were never asked for by the respondent No.1 at any earlier point of time during the assessment proceedings. He emphasises that the respondent No.1 had prior in time issued four notices under Section 142(1) which were duly complied with by the petitioner and in none of the said notices, the details as mentioned in the show cause notice dated 21st March 2022, were called for by the respondent No.1. He states that vide the said show cause notice dated 21st March, 2022, the petitioner was made aware for the first time of the result of the post search/inquiries qua the petitioner and that deposition had been made by some persons against the petitioner.

4. Per contra, Mr. Zoheb Hossain, learned counsel for the respondent/Revenue states that the principle of natural justice has been duly complied with in the present case, inasmuch as, adequate opportunities were given to the petitioners to respond to the four notices issued by the Department. He contends that the last notice was issued at the fag end of March as the petitioner had not furnished adequate response to the four show cause notices dated 10th December, 2021, 22nd December, 2021, 7th February, 2022 and 17th February, 2022 under Sections 142(1) of the Income Tax Act, 1961.

5. Mr. Zoheb Hossain, learned counsel for Revenue also states that despite receipt of the notice dated 21st March 2022, the petitioner neither filed any reply nor sought any additional time.

6. In rejoinder, learned counsel for the petitioner states that after receipt of the notice dated 21st March, 2022, the Director as well as the authorised representative of the petitioner Company had visited the office of the respondent No.1 on 23rd March, 2022 and sought additional time to file response to the said show cause notice. He, however, states that the authorised representative of the petitioner's Company was not entertained by the respondent No.1.

7. Mr. Zoheb Hossain, learned counsel for Revenue disputes the aforesaid fact.

8. Having heard learned counsel for the parties, this Court is of the view that time of one and a half day given by the respondent-Revenue to the petitioner to respond to the notice dated 21st March, 2022 in the peculiar facts of the present case was not sufficient. It is pertinent to mention that the show cause notice dated 21st March 2022 runs into 92 pages and is accompanied by the deposition of certain individuals which were not provided to the petitioner prior thereto.

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