The mandatory nature of the timeline prescribed under Section 148A(b) for the assessee to file a reply is emphasized, and the court ruled that the violation of this timeline renders the impugned order and notice illegal and void-ab-initio.

JUDGMENT :

Deepak Roshan, J.

The instant application has been preferred by the petitioner praying therein for quashing of the order as contained in letter dated 31.3.2022 (Annexure-3) passed under Section 148A (d) of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) whereby it has been ordered that the case of the assessee is a fit case for issuance of notice under Section 148 of the Act for the Assessment Year 2018-19. The petitioner has further prayed for quashing of the entire reassessment proceeding for the Assessment Year 2018-19 including the notice under Section 148A(b) of the Act dated 25.3.2022 (Annexure-2) and also notice under Section 148 of the Act dated 31.3.2022 (Annexure-4).

2. The facts of the case lie in a narrow compass. The petitioner had filed its return of income for the Assessment Year 2018-19, on 25.09.2018. The books of the petitioner were duly audited as per Section 44AB of the Act. On 25.3.2022, a notice under clause (b) of Section 148A of the Act was issued to the petitioner calling upon the petitioner to show- cause as to why notice under Section 148 of the Act be not issued for the reasons stated in annexure to the notice dated 25.3.2022. In this notice the petitioner was directed to ensure compliance on or before 28.3.2022. Even before lapse of seven days’ time from 25.03.2022, on 31.03.2022 itself the Assessing Officer passed an order under Section 148A(d) of the Act whereby inter-alia it has been ordered that the case of the Assessee is a fit case for issuance of notice under Section 148 of the Act for the Assessment Year 2018-19 and on 31.3.2022 itself notice has been issued.

3. Mr. Kumar Vaibhav, learned counsel for the petitioner submits that the Assessing Officer has erred in law and has acted in contravention of section 148A of the Act. The Assessing Officer has totally ignored the timelines prescribed by the Statute, which is in complete violation of the letter and spirit of the new regime for reassessment proceeding introduced by the Finance Act, 2021. Section 148A(b) lays down that the Assessee is to be afforded an opportunity to show cause within such time as specified ‘being not less than seven days’.

Learned counsel further submits that serious and grave prejudice has been caused to the petitioner as the petitioner has been denuded of an opportunity to file its show cause reply in order to persuade the revenue that there is no escapement of income for the concerned Assessment Year. He further submits that the petitioner apprehends that now the revenue will proceed with the reassessment proceedings. Since the very inception the genesis of the reassessment proceeding is violative of Section 148A of the Act, the entire subsequent actions of the Revenue in the instant matter is fit to be rendered illegal and void-ab-initio as there is clear violation of the mandatory timeline as stipulated in Section 148A(b) of the Act which has also caused great prejudice to the petitioner. As such, the instant writ petition may be allowed and the impugned order passed under Section 148A(d) dated 31.3.2022, the notice under Section 148A(b) dated 25.3.2022 and the Notice issued under Section 148 dated 31.3.2022 for the Assessment Year 2018-19 be quashed and set aside.

4. Mr. Rahul Lamba, learned counsel appearing for the respondent-Income Tax Department submits that the main issue involved in the instant writ petition is with regard to the time limit provided to the petitioner for filing reply against the show cause notice issued under Section 148A (b) of the Act. He further submits that the contention of petitioner that the respondent No.3 has not provided the petitioner the time period of seven days from the issue of the said notice under Section 148A(b) for replying to the said notice and instead passed the order under Section 148A (d) and consequential notice under Section 148 were issued by the respondent No.3 which has prejudiced the petitioner is not correct. As a matter of fact, notice to show