2025 (2) TMI 1217 - HC - Income Tax

Reopening of assessment u/s 147 - validity of notice issued u/s 148A(b) - less than 7 days provided to respond - violation of principles of natural justice - HELD THAT - SATISH KUMAR VERSUS PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX INCOME TAX OFFICER WARD-3 (1) RANCHI 2023 (12) TMI 812 - JHARKHAND HIGH COURT law is no more res-integra; inasmuch as the words not be less than 7 days implies that clear seven days is obligatory to be given to the Assessee. Thus on the one hand the notice which was given to the petitioner under Section 148A(b) was not in accordance with the provision of the Act inasmuch as only 6 clear days was given to him. So on this score alone the notice under Section 148A(b) deserves to be quashed and set aside. The impugned ex-parte assessment order as well as the penalty orders passed by the respondents are set aside. The petitioner is granted four weeks time to reply to the show cause notice.

Summary

ISSUES:

Whether the minimum period of seven clear days must be granted to an assessee to respond to a show cause notice issued under Section 148A(b) of the Income Tax Act, 1961.Whether a show cause notice issued with less than seven clear days for response is valid.Whether an ex parte assessment order passed following a show cause notice with insufficient response time is sustainable.Whether penalty orders passed consequent to such an ex parte assessment order can be challenged.

RULINGS / HOLDINGS:

The Court held that Section 148A(b) of the Income Tax Act mandates that a minimum of seven clear days must be given to the assessee to respond to a show cause notice, excluding the date of issuance and the last date of submission.A show cause notice providing less than seven clear days for response is not in accordance with the statutory provision and is liable to be quashed and set aside.The ex parte assessment order passed on the basis of a show cause notice with insufficient response time is invalid and is set aside.Penalty orders passed consequent to such an invalid ex parte assessment order are also set aside.The assessee must be granted a reasonable opportunity to reply, and the respondents are directed to pass a fresh assessment order after complying with the principles of natural justice.

RATIONALE:

The Court applied the statutory framework of Section 148A(b) of the Income Tax Act, 1961, which requires that a show cause notice must specify a time period "not less than seven days" for the assessee to respond.The Court relied on authoritative precedent interpreting similar language regarding minimum notice periods, specifically the principle that "not less than" a number of days requires exclusion of both the first and last day in computing the period, thereby mandating "clear" days.The Court referred to the Supreme Court's interpretation in Pioneer Motors (Private) Ltd. v. Municipal Council, Nagercoil, which held that when a statute requires a minimum number of days' notice, both the day of issuance and the day of expiry are excluded, ensuring a clear minimum period is provided.This interpretation confirms that the statutory minimum of seven days must be strictly complied with to uphold the principles of natural justice and fair opportunity to be heard.No dissent or doctrinal shift was noted; the Court affirmed that the law on this point is "no more res-integra."