2024 (6) TMI 1477 - HC - Income Tax

Shorter time to respond to reopening notices - minimum of seven days to show cause before issuing a notice u/s 148 required - violation of principles of natural justice - as argued notices issued u/s 148A(b) was issued on 11.03.2024 and was directed to make out a reply on 15.03.2023 which time period is less than the time stipulated under Section 148A(b). HELD THAT - Reading of Section 148A(b) confirms not less than seven days ought to be provided for making out a reply to the notice. The assertion of petitioner that non-affording of time period of seven days has resulted in prejudice and violation of principles of natural justice requires acceptance as it is noticed that the proceedings have been initiated in the absence of objections. Accordingly as the notices at Annexures- A and A1 itself are vitiated the consequential orders and notices also require to be set aside. Decided in favour of assessee.

Summary

The Karnataka High Court, through Justice S Sunil Dutt Yadav, allowed the petition challenging the notices and orders issued under Sections 148A(b), 148A(d), 148, 147 read with 144 and 144B, and penalty provisions under Sections 274 read with 272A(1)(d), 270A, and 271B of the Income Tax Act, 1961. The core issue was the violation of Section 148A(b), which mandates that the Assessing Officer must provide the assessee a minimum of seven days to show cause before issuing a notice under Section 148. The petitioner was given less than seven days to respond, resulting in a breach of the principles of natural justice. The Court held that the notices at Annexures-'A' and 'A1' were "vitiated" due to this procedural lapse, and consequently set aside all subsequent orders and penalty notices connected thereto. However, the Court granted liberty to the Revenue to initiate proceedings afresh in compliance with statutory requirements.