2024 (3) TMI 151 - HC - Income Tax

Validity of reassessment proceedings - shorter period to reply to notice given to assessee - HELD THAT - AO is required to grant time to the assessee to submit the reply to the notice issued under the said provision of not less than seven days. Admittedly, in the facts of the case, no time was granted to the assessee by the AO to file reply and therefore, the notice issued u/s 148A(b) of the Act is not as per the provisions of the Act. Moreover, it also appears on the record that the PCIT has granted the approval to the issuance of notice under Section 148 of the Act prior to even digitally signing of the notice under Section 148A(b) of the Act as well as to the date of passing of the order u/s 148A(d) of the Act on 26th March, 2022. Therefore, on both counts, the notice u/s 148 of the Act is issued admittedly without jurisdiction and contrary to the provisions of the Act. Thus the impugned order passed u/s 148A(d) of the Act as well as the notice issued u/s 148 of the Act are liable to be quashed. Decided in favour of assessee.

Summary

Issues involved:
The issues involved in the judgment are the challenge to the order passed under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 of the Act.

Challenge to the Order under Section 148A(d) of the Act:
The petitioner, an individual, filed a return of income for Assessment Year 2018-19, which was processed under Section 143(1) of the Act. A notice under Section 148A(b) was issued digitally on 26th March, 2022, requiring a response on the same day. The petitioner was not granted time to file a reply, and the order under Section 148A(d) was passed on 26th March, 2022, followed by a notice under Section 148 on 29th March, 2022. The petitioner contended that the notice did not provide the required time for response as per the Act, and the order inaccurately stated that no reply was filed by the petitioner within seven days. The respondent argued for a remand to grant the petitioner time to respond and for a fresh order to be passed.

Analysis and Decision:
Section 148A(b) of the Act mandates granting the assessee not less than seven days to respond to a notice. In this case, no such time was provided, rendering the notice non-compliant with the Act. Furthermore, the approval for the notice under Section 148 was granted before the digital signing of the notice under Section 148A(b) and the order under Section 148A(d), indicating a lack of jurisdiction in issuing the notice. Consequently, the impugned order under Section 148A(d) and the notice under Section 148 were found to be without jurisdiction and contrary to the provisions of the Act. Thus, the court quashed and set aside the order and the notice, ruling in favor of the petitioner. The petition was allowed, with no costs imposed.