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: Sets Aside (d) Order for J J Foods
In a significant ruling underscoring the primacy of in tax reassessment proceedings, the has set aside an order passed under (d) of the , against . The of Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta held that the (AO) violated by arbitrarily curtailing the assessee’s and then ignoring the reply that was filed.
The Timeline That Went Off Track
The case began when the AO issued a notice under (b) to J J Foods on , requiring a response by . The assessee sought an adjournment on that date, and the hearing was moved to . On , J J Foods requested two weeks’ time, but the AO granted only two days, fixing as the final deadline. The assessee explained that its accountant was out of station and, on , emailed the AO seeking two weeks’ extension. Despite this, no extension was granted, and the assessee eventually filed its reply on .
A Reply Filed, But Ignored
Despite the reply being uploaded on , the AO proceeded to pass the under (d) on , without considering it. This prompted J J Foods to move the High Court, arguing that the AO’s action amounted to a .
Revenue’s Stance: Time Limits Must Be Respected
The defended the AO’s action, contending that two opportunities had already been given and the assessee failed to comply with the deadline. It argued that just as the AO must adhere to , the assessee too must respect the time allowed.
Court’s Observation: ‘’
The High Court, however, found merit in the assessee’s grievance. It noted that the statutory framework under affords an assessee 30 days to file a reply to a (b) notice. The AO, by granting only 15 days (from to ), had effectively curtailed this right. Crucially, the court observed that the AO had ample time remaining — at least until — and there was “ to or to confine its right to file reply by 10.03.2024.”
The court further pointed out that the assessee had emailed its extension request on , a day before the curtailed deadline, and the AO ought to have granted some additional time “so as to serve the .”
Key Observations from the Judgment
“Such being the position, the had enough time left at his disposal, (at least upto ) to take petitioner’s reply. There was to eschew petitioner’s right to file reply or to confine its right to file reply by 10.03.2024.”
“That apart, the petitioner’s reply had already been uploaded, hence, the could very well see and consider the reply so filed before passing an order, but he has chosen not to do so.”
“The AO’s approach suffered from irregularity and led to violation of .”
Decision and Direction
The High Court set aside the (d) order dated , and the consequential notice under . It directed the AO to pass a fresh order after considering the assessee’s reply dated , 2024, in accordance with law, without being influenced by the earlier order. The court clarified that it had made no observations on the , leaving the AO free to take an independent view on .
The ruling reinforces the principle that cannot be sacrificed at the altar of , and that tax authorities must respect the statutory rights of assessees, even when faced with delayed responses.
